Pioneer Saloon in the historic mining town of Goodsprings, Nevada
Does economic development spur growth, or does growth promote economic development? This “chicken or egg” question is complex and requisite to understanding the 2023 economics of our Greater Las Vegas Metropolitan Area. But it is not without a definitive answer. To find it, we must look back to our Silver State’s history.
The discovery of the Comstock Silver Lode in 1859 created wealth, and Nevada’s population soared. Between 1860 and 1919, this state’s miners hand-carved more than $700 million of silver and gold ore from its depths. In today’s dollars, that is a staggering $12.3 TRILLION. Consequently, our population increased tenfold from 7,000 to 77,000 residents.
Luckily, as the Comstock played out, Nevada hit the Mining Trifecta when rich deposits of silver were discovered near Tonopah; significant copper veins by Ely; and a bombastic gold strike in Goldfield. These bonanzas brought thousands of new miners with the resultant expansion of the vital railroad for hauling mining machinery. And, this new economic boom came to ground level when ranchers expanded their lucrative livestock, the whiffs of consumerism began, and the railroad hub of Las Vegas exploded.
It is clear that the mining boom and its promise of wealth lured hundreds of miners to Nevada. The sudden influx of prospectors led to the development of communities that provided support services, supplies, housing, and recreation. By 1930, Nevada’s population had reached 91,000.
A New Economic Driver
When the Depression hit in 1929, Nevada’s economy suffered as much as the rest of the country. Resourcefully, the 1931 Nevada State Legislature threw morality aside and legalized casino gambling to lift Nevada out of the hard times. Later that year, the Legislature legalized the ‘Quickie Divorce’ statute. It also relaxed the marriage laws by tossing the requirements for a blood test and waiting period, becoming the easiest state in the nation to get divorced or married. Those legislative actions rescued Nevada’s economy and set the path forward for economic and population growth that would continue for the next 70 years.
In 2022, Nevada had a General Fund tax revenue base of $5.4 billion, of which $2.1 billion (39%) was derived from the hotel-casino industry. Gaming was responsible for most of the industry’s taxes ($963 million) and contributed 45.8% of the total General Fund revenue.
In addition to gaming, the quickie marriage business has attracted more tourist dollars. According to the latest Clark County statistics, 79,279 marriage licenses were issued in 2022, generating $8.086 million in fees. Statistics don’t break out how many licenses are from out-of-state visitors. However, according to a Worldwide Elopement Trends Study by Chapel of the Flowers, Las Vegas is the top location for wedding vows, receiving a whopping 11,800 internet searches every month for terms such as ‘Vegas elopement‘ and ‘elope in Las Vegas.’ On Instagram, #Vegaselopement has 24,000 hashtag searches. The number of tourist weddings is significant enough to support 100 chapels, 4,600 active-licensed wedding officiants, and over 18,000 related jobs. On average, our knot-tying industry is yearly worth $2.6 billion.
Growth of the Industry and the Community
Since 1990, Nevada has consistently ranked among the fastest-growing states in the country and often held the top position. However, rapid growth has posed considerable challenges for resource management, social services, and health care.
While mining and the hospitality industries had supported the majority of Nevada’s workforce through the end of the 20th century, its percentage of employment influence has sharply declined as the population grew.
For example, in 1975, the population of Clark County was 351,000, of which 211,000 were employed. While the few hotel resorts seemed glamorous at the time, they only had a combined total of 35,000 rooms and employed an average of three people per room. It also estimated that for every room built, another two people were employed in support-type businesses. To put that in perspective, the hotel-casino industry employed approximately 105,000 people (50% of the workforce) and created jobs outside the industry for another 70,000 people (33%), which combined, totaled 83% of the employed.
Fast forward to today (according to figures published in the Las Vegas Global Economic Alliance (LVGEA) 2023 Perspective), the current population of Clark County is 2.3 million, with a labor force of 1.13 million, of which 1.068 million are employed. There are 151,770 hotel rooms, and the leisure/hospitality industry employs 274,700 (25.7% of the total employment base). The number of employees per room has dropped from three people to 1.8.
The Need for Diversity
During the heyday of the ’50s, ’60s, and ’70s with Rat Pack headliners, Las Vegas was and always will be considered the Entertainment Capital of the World. However, the visionaries of the day saw the need to diversify the economy, fearing that the hospitality industry alone might not support Clark County’s growing population. How to diversify was the big question.
According to the Perspective report, we have made some progress toward expanding the employment base, but the effort has been meager, as shown by the numbers below.
2022 Employment by Industry Sector
Room for Growth
The LVGEA has identified Lithium-Ion battery manufacturing, FinTech (Financial & Technology) Industry, Life Sciences/R&D/Pharma, Regional & National Headquarters, and Sports/Entertainment Production/Digital Media as target industries of the future. These target industries have advantages over heavy manufacturing because they are environmentally clean, use few natural resources, and require thousands of skilled and unskilled workers.
As you might suspect, the Leisure & Hospitality Industry continues to expand, with 4,942 rooms and 581,000 square feet of convention space slated to open by the end of 2023. An additional 1,175 rooms and 32,00 sq. ft. of convention space will open by the end of 2024.
But quickly becoming an economic force is the Sports and Entertainment Production Industry. The Las Vegas Raiders NFL team plays its home games at the recently built $1.9 billion Allegiant Stadium, also the site of the 2024 Superbowl. The 2023 Stanley Cup hockey winner, Las Vegas Golden Knights, plays at the $375 million T-Mobile arena, which hosts top-name concert events. In addition to mega concert events, the 12,000-seat Michelob ULTRA Arena at Mandalay Bay is home to the 2022 WNBA Champion Las Vegas Aces and the Las Vegas Desert Dogs professional box lacrosse team. Each of these home team sporting events and star-powered concerts have been a big boon to the tourist base.
However, the City’s biggest coup is the 2023 Formula 1 Heineken Silver Las Vegas Grand Prix event this November. This is the most glittering sport in the world, and it places Las Vegas on the map of ‘High-Stakes’ racing. After the construction of a $400 million paddock, the best twenty drivers in the world will roar 200+ mph around a 3.8-mile track: Our Gold Vein, the famous Las Vegas Strip—our September newsletter will feature more on the race, its players, and the benefits to the economy.
Lights, Camera, Action! In 2022, the Nevada Motion Picture and Sound Recording industries produced revenues of $76.5 million. Plans announced last May for two new production facilities are designed to dramatically increase that revenue. First is the Las Vegas Media Campus, to be built near the new Durango Resort and Casino. In partnership with UNLV, which will house both production and post-production facilities.
The second, with an even grander presence, will be Sony Pictures Studio. This Hollywood icon, via backing from the Howard Hughes Corporation, will hold its Opening Night in Summerlin.
These newcomers will create 8-10,000 construction jobs over the next five years and, when the two studio zones are fully deployed, will feature 7,000 full-time employees.
Which comes first?
To answer the economics or growth “chicken or egg’ question, it is clear that Money Is The Driver. Without prosperity, growth and development die. Just look at the once-thriving mining towns.
The same is true for business. If there is no market for its goods or services, a business will fail. To stay relevant, you must evolve and develop new services that match your customer’s needs. And to do so, your best bet is having cash on hand. Let Business Finance Corporation (BFC) be your own Comstock. Claim economic agility by converting your money-earned receivables into ready cash. Call 702-947-3800 or visit https://bfc.vegas/ today.