The Nevada Resort Association, the lobbying organization for the state's resorts and casinos, laid out the devastating effect a prolonged shutdown of the tourism industry could have on Nevada's economy in a letter sent to the state's congressional delegation. In the letter, dated March 20, the group said a three-month shutdown due to the Covid-19 crisis could have an economic impact of $38.9 billion on the state's tourism industry.
Nevada Gov. Steve Sisolak on March 17 ordered all nonessential businesses, including casinos and retail stores, closed for at least 30 days. "This necessary public safety initiative has immediately put approximately three out of every four positions in Nevada's tourism industry at risk," the letter said.
"No other state in America depends on travel and tourism at the magnitude Nevada does," Virginia Valentine, president and CEO of the association, stated in the letter. "Nevada depends more on tourism than Alaska does on oil, Wyoming does on coal mining or New York City does on the financial sector. Las Vegas, the state's largest economic center, is more dependent on tourism than Detroit is on auto manufacturing, Seattle is on aerospace or Nashville is on music and entertainment."
Immediately at risk are 320,000 jobs and $1.3 billion per month in wages earned, the letter said. Cancellations of meetings and conventions in March and April, including the NFL Draft and the National Association of Broadcasters, mean a loss of almost $2 billion in economic activity.
A report by research firm Applied Analysis, commissioned by the Nevada Resort Association, concluded that if Nevada's tourism industry is shuttered for 30 to 90 days, 160,000 additional jobs would be at risk. There would be about $5 billion in direct wage losses, $7.7 billion when secondary impacts are considered. Besides the total impact of $38.9 billion, the report estimated a direct economic impact on the tourism industry of $22.5 billion and said a recovery could take 12 to 18 months.
"The impacts associated with Covid-19 are unparalleled and economically staggering," Applied Analysis concluded. "Should companies' ability to maintain payroll and health care coverage diminish, hundreds of thousands of employees and billions in wages and salaries will be immediately at risk as will the very core of Nevada's economy and its fiscal system."
Nevada's tourism industry is responsible for 40% of the state's general fund revenue, supports more than 450,000 jobs (one in three jobs in the state), $20 billion in wages and salaries annually, $1.8 billion in industry-specific fees and taxes and $75 billion in annual economic output (45% of the state's output).
Concluding the letter to the state's delegation, Valentine urged Congress "to consider providing immediate economic relief and recovery to the lifeblood of Nevada's economy: the hospitality, tourism and meeting and convention industry and its vast workforce."
Gov. Sisolak announced on March 22 that he had appointed appointed former MGM Resorts International CEO Jim Murren to lead a task force that would organize private resources to help the state fight the coronavirus. Murren led MGM from 2008 to last month, when he stepped down as chairman and chief executive.