The 2009 Recession Impact Study is underway

Earlier this week over at we rolled out our latest project: the 2009 Las Vegas Casino/Hotel Impact Survey. It’s a new start for the center but also a return to the past. Let me explain…

In 1980, accounting firm Laventhal and Horwath conducted a “Recession Impact Study” that polled executives at Las Vegas casinos about the nature of the ongoing economic decline. I happened across this study while I was doing research for the paper about how Las Vegas reacted to the early 1980s recession that I gave at the 14th International Conference on Gambling and Risk-Taking. I found it very useful, and wondered, “Hmmm. Someday historians might be curious about how Las Vegas casinos reacted to the 2008-? recession.”

That was the genesis of the idea. Borrowing a few questions from the 1980 survey, I quickly had a list of 20 questions that, with some help from people in the industry and at UNLV, I later boiled down to ten.

The 1980 survey’s methodology is a bit mysterious–the study only says that a large sample of casino executives were polled. I decided to be a bit more methodical in my approach, so I developed a distribution system that, given the limitations of resources, seemed feasible to me: I decided to find a contact person in each of the 70 or so Las Vegas hotel casinos and convince this contact to forward an email with information about the survey (including how to access it) to 5-10 fellow executives. That should theoretically generate about 500 respondents, which is a big enough pool to get a sense for how the industry feels.

I decided to define “executive” as anyone working at a Las Vegas casino/hotel at the director level or above. I also decided to confine this study to Las Vegas because the logistics of getting in touch with 70 people seem much less daunting than getting in touch with 500, which I’d have to do if I expected to have any kind of national sample. Also, as a resort destination Las Vegas is facing issues in the recession that are markedly different from those facing regional markets.

So far, I’ve gotten in touch with a few contacts and gotten several responses. I’m cautiously optimistic about the prospects of getting support from the various properties across town, though this isn’t an easy job. Everyone is busy, of course, and many don’t see the value in taking the time to answer a few questions with no immediate payoff.

There is, however, a payoff. Right now, I think that many executives are flying blind–they don’t have much of a feel for what lies ahead, and their only impression of what others are doing is based on rumor and hearsay. What we’re doing at UNLV is conducting a systematic study of what executives think is exacerbating the recession’s impact, and what can ameliorate it.

The simple answer is, “It’s the economy, stupid.” Obviously, the overall downturn has lowered visitation and gambling spend. When the national economy picks up, the gaming/tourist economy will as well. Maybe. Or maybe not. What impressed me about the industry’s reaction to the early 1980s recession was that there was an understanding that something wasn’t working, and a well-conceived plan to change course. Because of new competition, a weakened global economy, and rising energy prices, the high roller market diminished. Casinos responded by pursuing the middle-market gambler and families. This worked–Las Vegas was in the doldrums from 1979 to 1982, but with new attractions and new strategies rebounded in the later part of the decade, far more so than if casino operators had simply dug in and waited for the storm to pass. You didn’t see a return to 1977. You saw an expansion of the market.

The survey is an attempt to learn how executives are planning to weather this recession, and come out improved. Will they ditch amenities and focus on no-frills gambling, or add amenities and again court the non-gambling luxury market? Will they focus on improving the quality of food and beverage, or increasing the perception of value?

My sales pitch to the executives who I’m asking to take the survey is: you’ve got some difficult choices ahead of you. Every department is going to be arguing for scarce resources in the coming months. If we can get a large group of executives to answer the survey, you’ll have something to take in front of your executive committee when you’ve got to make those decisions. For example, you want money to open a new restaurant. If the survey shows that most executives think they should spruce up their f&b options, that’s some good support. Or maybe you’ll be able to see something that no one else does, and find a niche that’s going to be underserved.

Ultimately, it comes down to the idea that knowledge is power. With the city’s casino industry facing its deepest and possibly longest economic downturn yet, it only makes sense that those who will make the decisions that will shape the industry for years to come would want access to as much information as possible.

And, from my perspective, historians will be able to write a much truer interpretation of what’s happened, when the dust has settled.

If the survey is a success, I hope to run a few of these a year, on various issues facing operators.

If you are a director-and-above executive at a Las Vegas casino and want to participate, or if you want to volunteer as a contact person (or can recommend one), please email me.

To visit the survey page, go here, but you’ll need to contact me and get a password before you can take the survey.

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