The dentists are back in town, 27 000 of them. Up and down the Las Vegas strip they are fighting for taxicabs and bar space with rival conventioneers and tourists from as far afield as Australia and China.
Beneath the two million crystals of the eponymous Chandelier Bar at the Cosmopolitan of Las Vegas Hotel, everyone is getting loaded on cut-price cocktails. In Tom Ford, Louis Vuitton and Prada boutiques, shoppers are flashing their plastic. Forget the hangover, Vegas is back — just not for most of the people who actually live there.
Of all United States cities, Las Vegas was the one hit hardest by the credit crunch. The city seemed emblematic of the excesses of the easy-credit era. A huge property boom led to overbuilding as speculators made fortunes from buying and selling homes. Abandoned casinos marred the north end of the strip like so many busted flushes.
Now things are looking up. Visitor numbers are rising and hotels have raised their room rates. Home sales are set to hit a high this year, albeit at rock-bottom prices. Houses that once sold for $400 000 are being snapped up for $100 000 by cash buyers.
But for those without ready funds, getting a home loan is harder than it has been for years.
Once again Vegas is proving to be a reflection of the country’s wider problems. This is a tale of two cities.
For the rich, mostly from out of town, it is the best of times. For those on low incomes, these are the worst of times. This week the Republican would-be presidential candidates were in town, the economy was the only issue on the agenda and no city could provide a starker illustration of the nation’s divisions.
Nevada had the lowest unemployment in the US in 2006 at 4%; now it has the highest at 13.4%. The US unemployment rate is 9.1% but Stephen Brown, director of the University of Nevada Las Vegas’s centre for business and economic research, reckons the real number in Las Vegas is closer to 24%. The poverty rate has doubled since last year and the state has the highest rate of children with unemployed parents, according to a report by the Annie E Casey Foundation. About 13% of all children in Nevada have been affected by their families being evicted from their family homes.
‘Epic, unparalleled growth’
Jim Murren, chief executive of MGM Resorts, the town’s biggest casino firm, has seen encouraging signs. But, he said: “The remnants of the recession are still being felt today. You need look no further than the unemployment numbers or the foreclosure rate for homes: prices have fallen 50% to 60% in some cases. And look at the tremendous pressure that’s been put on public services, shelters, food banks.”
After decades of “epic, unparalleled growth” this community was “hit as hard, if not harder than any community in the Unites States”, he said.
“It’s easy to see — just look at the shells of buildings as you drive up the strip.” Murren said things were starting to improve across the board, but the recovery was “not as strong as we would like”.
But what will Las Vegas look like after the dust settles? For decades it has been one of the fastest-growing cities in the US. In the 1990s the population was growing at 4.5% a year; now it is flat. The construction boom that drove that growth is over. Murren believes it will be a decade before any significant building project takes place in the city.
Locals say illegal immigrants who did much of the heavy lifting have disappeared, an observation backed by a report from the Pew Hispanic Centre last year. It indicated that the number of illegal immigrants entering the US had plunged by almost two-thirds between 2005 and 2009.
The boom years were crazy, said Linda Andrew Ness, national director of Smart City, a convention centre organiser. “It got to the point where sales people didn’t even have to pick up the phone. The business just came in.”
Vegas today was a very different city, she said. Her husband, Jim Ness, vice-president of an audiovisual company that also works with conventions, grew up in the city.
“We shrugged off other recessions in the past,” he said. “When I was at school a lot of people weren’t interested in higher education — they just left and got a job in construction or the casinos. Now, if you haven’t been to college, you are in real trouble.”
Brown agreed. “In 2 000 people parking cars could make $80 000 a year. Now, from our master’s programme, we place people in jobs making an average of $65 000,” he said. The easy money has gone.
Top end of the market
That may be true for the middle class and below, but the top end of the market is roaring back. Over at Maverick Aviation, where people charter private helicopters at $500 a person and private jet rides that can cost more than $2 000 an hour, director Bryan Kroten said their biggest problem was finding pilots to cope with the demand. “The top end of the market never left,” said Kroten.
If anyone knows the top end of the Vegas market it is Joe Vann, publisher of Vegas magazine, the city’s glossy monthly. “The super-high end is doing fantastically. Chanel and Dior are kicking butt. They are having record months at Louis Vuitton.”
The city at the moment was a “juxtaposition of diametric opposites,” he said. Although the death of the construction industry has claimed thousands of jobs, there are seven Louis Vuitton stores in an 11 kilometres radius, all doing well.
The world’s rich have made Vegas their playground. On Mexican Independence Day the super-wealthy Mexicans come here to party; on Chinese New Year, it is the Chinese. “This is two cities,” said Vann.
The middle classes would come back, Murren said. Vegas is a cheap city to live in and the weather is always good. “More than that, people love coming here.”
But, he said, it would have to change profoundly if it was to avoid the mistakes of the past. “We have to be very nimble.”
The rich may be rolling in but for the rest of Vegas, like most of the rest of the US, the future is about doing more with less. “Growing up here people always said that we couldn’t expand beyond X because of the water shortages. Then we’d get to X and they’d say, well, we’ll never get beyond Y. That never happened,” said Ness.
In the end it was not water that tamed this city in the desert; it was money. —