Friday, August 01, 2008
Work Halted on $4.8 Billion Vegas Casino Project
[Above: The Echelon casino resort complex on the Las Vegas Strip as it will look if and when completed, and bottom, as it looked at the end of June.]
In the most dire sign yet of the economic slowdown affecting Las Vegas, Boyd Gaming Corp. said today it was stopping work on the huge $4.8 billion 5,000-room Echelon casino resort complex now rising in the middle of the Las Vegas Strip. Work may not resume for as long as a year if the economic malaise and tight credit conditions don't improve, the company said.
Las Vegas has about 125,000 hotel rooms, with another 35,000 in the development pipeline.
Huge problems loom even beyond the general economic slump and the credit crunch. Vegas depends heavily on affordable leisure air travel. It had about 36.7 million visitors last year, most of whom arrived by air.
But airlines have been slashing capacity at Las Vegas. In September, airline capacity in Vegas (defined as the number of available seats) will be down about 11 percent compared with September of 2007.
About 25 percent of visitors to Vegas drive from Southern California. That market, too, is shrinking as gas prices remain at all-time highs.
Vegas hotel casinos and other local interests are scrambling to come up with ways to bolster business. Among ideas under study are subsidizing charter flights or even subsidizing a new leisure-travel airline flying limited schedules to and from key major customer markets.
There's some precedent, incidentally. In 1999, two casinos, Harrah's and Rio, started up low-fare National Airlines to entice more visitors from the East Coast. National, which had a fleet of 19 Boeing 757s, went out of business in 2002.