How Vegas Casinos and Hotels Shape the City’s Business Landscape
One of the most fascinating economic studies you can carry out in contemporary America is looking at how Vegas makes its money. Specifically, how the casinos and hotels the city is known for around the world continue to dominate the business landscape. We’re going to take a look at so much more than the bottom lines of the casinos by looking at how they actually drive other areas of business and commerce in the city. Let’s dive in and get started.
Casinos invest in exhibition halls
Anyone who takes a closer look at the standard Vegas casino-hotel complex will notice that there are always exhibition and conference facilities in plentiful supply. The idea here is that the expansive land that’s available can be used for multiple purposes so that firms can offer hospitality packages to clients and staff. Being able to offer a luxury hotel block booking, more than enough evening entertainment and world-class flexible conference facilities all under one roof has been a home run for the city. Add in the fact that the transport links and airport make it a site that is easily accessible from anywhere in the country and you start to see the magnetic pull in full effect.
Casinos invest in athletic commissions
The other obvious example of business diversification in Vegas is pro boxing. For decades the biggest fights have been hosted by the likes of the MGM Grand and Caesar’s Palace. While the majority of the revenue these days comes from pay-per-view buys, there are still millions to be made from the live gate and the surge in hospitality revenue during a big fight week.
What’s interesting about the city’s long love affair with boxing is that it has actually resulted in a somewhat chaotic sport gradually creating one of the world’s leading athletic commissions. This is one of the things that is easy to miss when you want to get to know what Vegas is all about, but it has been a major force in expanding the reach and appeal of Vegas to far more people.
You only have to look at the $13 billion valuation of the UFC in mixed martial arts (and the fact their headquarters are in Vegas) to see what we’re talking about. Now anyone from anywhere in the world can fly in for one of the weekly fight cards, stay in the biggest hotel in Vegas, and enjoy a luxury weekend away in style. The beauty of this is that you can start to see the size of the opportunity for other sports.
Casinos understand the importance of arenas
The positive economic outlook for Vegas residents is driven in large part by the rapid proliferation of futuristic arenas that are taking place. Construction, staffing, and hospitality are all growth areas right now, and they’re being funded to a large degree by forward-thinking casinos. They know that if there is a new way to get people to the city, they need to have a seat at the table from day one of the initial planning stage.
The T-Mobile Arena and The Sphere are two examples of massive arenas that can bring people into the city and put them in the best seats in world sports. This is certainly an exciting development as it adds plenty of family-friendly entertainment to a city that typically only used to offer musical residences and pop-up concerts.
Casinos know how to build a legacy
The enduring nature of Vegas is a testament to the strategic planning of the major casinos. They know how to bid at land auctions in a way that generates maximum return on their investment, and they’re not shy about opening their wallets when the time is right. This has resulted in consistent performance in the property markets and a level of long-term appreciation that makes many sites on the strip viable investment opportunities.
If you add in diversification of entertainment, demographic expansion, and a culture of continual reinvestment driven largely by the casinos, the future is bright for Vegas. The great thing about this is that it combines with a highly regulated and legally sanctioned state that is now known as a great place to do business.
What will the casinos do next?
While these types of long-term predictions can be challenging to make, we think we can make an educated guess as to the direction the city will take in the next 10 years. The high density of luxury hotels and nightspots will become increasingly integrated with multi-media arenas that will host innovative live events. Look at UFC Noche this year and you get a sense of what’s possible when you give entertainers and business leaders the chance to do business in a place that is always open for business.
