2009 is history

…at least as far as the LVCVA is concerned. The December and year-end visitor numbers, minus the gaming figures for now, was just released. Here are some highlights from the executive summary:

December: Visitor volume up 1.5%, room inventory up 6% compared to December 2008.
2009 (total): Visitor volume down 3%, room inventory up 6% compared to calendar 2009
Average Daily Rate (ADR) was down a whopping 22% for the year, but only 5.8% in December
Both the number of conventions held (19,394) and the number of attendees (4,492,275) were down substantially for the year (13.6% and 23.9% respectively)
Air passengers deplaned declined by 8.2%, traffic on all highway was up by 2.5%, and on I-15 by 4%
2009 LAS VEGAS YEAR-TO-DATE EXECUTIVE SUMMARY

First, the good news. The drop in ADR was less than double-digits for the first time all year. Considering that March and April saw drops of more than 30%, losing less than 6% in room rates with a jump in occupancy in December was actually good news. Convention travel showed a year-over-year increase in December, the first increase all year. I don’t know if this classifies as “green shoots,” but it’s definitely better than a straight year of annual declines.

Now, the so-so news. Visitor volume was down 3 percent, which is actually better than the 2008 decline of 4%. There seems to be some correlation between the falling ADR and the rising visitor volume, meaning that cutting prices on rooms helped to lure more people to town–no surprises there. With the number of air passengers falling, casinos clearly need to ramp up their outreach to Southern California and encourage people to make the drive up I-15.

But wait–there is also some bad news. Visitor volume fell by 3 percent for the year. Room inventory increased by 6 percent. It doesn’t take an economist to realize that there’s still an imbalance between supply and demand that does not bode well for the future. The increase in visitor volume for December–despite a highly-hyped casino opening–was less than the increases in the previous three months. Since September, the monthly gain has decreased steadily. In December, at least, it doesn’t seem like the new supply brought enough visitors to Las Vegas to compensate for the increase in capacity.

There is still hope, though. When the gaming numbers come out, we’ll get a better idea of whether the people who came to town in December gambled more than they did in 2008. That was the case in November, but the 6.9% bump in revenue for that month was largely driven by high-end baccarat play, as the slot play actually fell by a billion dollars, an indicator that people for the most part are gambling less. If high-end play increases, then a jump in gaming revenue can compensate for the lower occupancy rates, at least for the short term.

But the larger trend–less air traffic, more auto traffic–seems to run counter to the high-end strategy. We’ve got a confusing year ahead of us, that’s for sure.