News 3 LV: Uncertainty in Las Vegas summer tourism due to rise in gas prices

Oil prices hovering at just over $100 a barrel amid tensions over the Strait of Hormuz are translating into higher gasoline prices. That spike is adding uncertainty to forecasts for the Las Vegas summer tourist season.

Andrew Woods, director of UNLV’s Center for Business and Economic Research, said economists entered the year expecting conditions to improve after last year.

“I think beginning of year, we were pretty optimistic that things would smooth out from last year for the Las Vegas economy,” Woods said.

The center’s mission is to weigh a wide range of economic indicators to help the region’s tourism and business community understand potential headwinds. Last summer, the group accurately raised concerns that visitor numbers would be soft through the end of the year. Now, Woods said, rising fuel costs are making the coming months harder to predict.

Woods said hospitality jobs are holding up, but higher gas prices can cut into the disposable income many visitors rely on to travel to Las Vegas and potentially extend their stays.

Armando Bustamante, who drove to Las Vegas with his family from California as part of a road trip, said the cost of fuel has been a major hit.

“Very painful. We have a road trip from San Diego to Zion, and we stopped at a gas station along the way and we paid 8-dollars a gallon. Yeah,” Bustamante said.

Lee Bowen, who visits from the U.K. at least once a year and typically rents a car to see attractions away from the Strip, said gas prices are a top concern.

“What’s gonna be the worst part of your vacation? Probably gonna be the gas prices. I’m not gonna lie to you,” Bowen said.

Bowen said sustained increases could change his plans.

“Could this be a budget buster for your vacation? If it keeps going the direction its going, it’s gonna stop me from renting the cars,” he said.

Woods said the impact could extend beyond people who drive in or rent cars. He said higher fuel prices could also affect airfare and influence some travelers’ decisions, though he cautioned that travel planning depends on more than one factor.

“We have to kind of see how this plays out. You know, the bad news is that it could deter some people in their summer plans, or make air fares a little bit too unaffordable for those on the margin at the same time, from our research and research we’ve talked with others, is that this isn’t the only decision that goes into people making travel plans. And heading into the spring here, we were anticipating record travel across the United States,” Woods said.

Looking ahead, Woods said the center is closely monitoring consumers’ ability to afford vacations and broader travel, as well as business travel, which he said has remained strong so far.

“So we’re paying very close attention to consumers and their ability to afford going on vacation or going on different you know, travel. And then the third one is, we’re watching business travel, and how are businesses making decision? And that’s something that we’ve seen so far has been very strong,” Woods said.

Woods also said analysts will be watching how Las Vegas stacks up against competing destinations such as Nashville, San Diego, Orlando and Hawaii. He said those markets performed well last year with domestic visitors, and he is optimistic local resorts will adjust their pricing strategies in response.