Is city ready for another shutdown?
Businesses, workers still reeling from first
Las Vegas’ businesses, employees and economy are still reeling from the state’s first shutdown. Is the city ready for another?
On Wednesday, Gov. Steve Sisolak said he would announce new measures to curb the spread of the novel coronavirus “very soon.” It’s unclear just how strict those restrictions will be or when they will go into effect, but experts say a second shutdown would have adverse effects on a number of industries within the state, and could push the state into deeper economic trouble.
Sisolak has not yet specified what additional restrictions would look like, but economists agree Nevada’s face-to-face industries — like food and beverage, beauty and hospitality — would likely be the hardest hit by a potential second shutdown. Service workers, in particular, would likely suffer greatly without the ability to interact with customers and collect tips.
Economic hurdles
The uncertainty of what new restrictions are coming puts businesses in a temporary bind, said Tom Harris, professor of economics at the University of Nevada, Reno and director of the University Center for Economic Development.
“If you’re a restaurant, are you gonna only have takeout, or are you
gonna only have to be restricted to 50 to 25 percent (capacity)? Is that enough volume for you to be profitable? Nobody knows,” Harris said.
Other states’ travel restrictions could also factor into Nevada’s tourism industry, notably California’s guidance for anyone entering the state to quarantine for 14 days, Harris said.
Nevada is “an export economy,” though the prime export, tourism, is “consumed at the point of origin,” adds John Restrepo with RCG Economics.
Promising developments in COVID-19 vaccines could help the state’s long-term recovery if the vaccines are effective and widely distributed, the economists said.
A point of no return
Some Nevada-based casino companies are already taking a hit from second-round restrictions in other states.
Illinois, Michigan, New Mexico and Philadelphia have shut down casinos completely. Other gaming markets — including New Jersey, Ohio and Massachusetts — have implemented curfews that limit foot traffic at resorts.
According to the American Gaming Association’s online casino tracker, 99 of 994 tribal and commercial casinos across the country are temporarily closed, as of Thursday.
Those shutdowns are already having adverse effects on casino employees.
On Nov. 6, after Massachusetts implemented a nightly curfew on its three casinos, Wynn Resorts Ltd. — which operates Encore Boston Harbor — said it could furlough up to 1,000 employees. MGM Resorts International, which runs MGM Springfield, said it had laid off or cut back hours for 250 employees.
If Nevada casinos were to shut down again, said Brendan Bussmann, director of government affairs for Global Market Advisors, it could push the industry to a point it may not be able to recover from.
Spokespeople for MGM, Wynn, Caesars Entertainment Inc., Boyd Gaming Corp., Las Vegas Sands Corp. and Red Rock Resorts Inc. did not return requests for comment.
The timing of the shutdown would come in the midst of Las Vegas’ traditional slow season. Foot traffic is already low during this time of year — the lack of entertainment, airlift and group business has made it dismal, especially midweek. If the state does implement restrictions on the gaming industry, traffic could take an even more severe hit, said Greg Chase, founder and CEO of Las Vegas-based Experience Strategy Associates.
Shutdown ‘top of mind’ For nonprofits
The United Way of Southern Nevada said that during its weekly Zoom meeting with over 200 local nonprofits Thursday, the possibility of a second shutdown was top of mind for many organizations.
Most local nonprofits expressed concerns about long-term support like funding and supplies during
Thursday’s call, said CEO Kyle Rahn. Another shutdown will most likely have an impact on in-person volunteers.
Some nonprofit leaders are unsure what another shutdown, or heightened restrictions, would look like for the essential services they provide, said Rahn. Other nonprofits said they were worried about being exposed to COVID-19 as they are often on the front lines and at more risk for exposure than the average citizen.
Other nonprofits, like Three Square, said they’ll be prepared if another shutdown occurs.
“We are keenly aware and staying tuned to what’s going on,” said Larry Scott, chief operating officer at Three Square. “When we were hit with this first shutdown, it was so sudden that our agency partners, many which had to shut down, that we had to reinvent ourselves with drive-thru distribution sites. But if we experience another shutdown, that infrastructure is built so we will be far better prepared this time around.”