Nevada more prepared for recession, state officials tell NNDA
Three experts told the Northern Nevada Development Authority on Wednesday the state is in much better shape to handle a recession than when the great recession hit in 2007.
Bob Potts of the Governor’s Office of Economic Development, Hassan Azam of the Reno Tahoe International Airport and John McGinness of the Atlantis hotel-casino addressed a crowd of almost 100 at the Casino Fandango.
They were joined by NNDA Executive Director Rob Hooper who pointed out the tourism industry is similar to the “canary in the coal mine.”
“This sector is the first to feel an economic downturn,” he said.
Potts, research director at GOED, said the key difference is the concerted efforts to diversify Nevada’s economy over the past decade. He said that effort has been successful, especially in western Nevada, which he said is “seeing real diversification.” And that means less reliance on casino resorts to support the economy.
Potts said most experts are predicting the national economy is going to slow down.
“But our economy is going to hold its own better than the national economy,” he said.
Azam, who manages air service and cargo development at the airport, said the mix of passengers has also changed in the past six years, moving from heavy reliance on leisure passengers and more on business travelers. And business travelers, he said, are less likely to be impacted as heavily by an economic downturn as vacationers who pull back travel and other things when money gets tighter. He said in the great recession, the Reno airport lost a third of its business and the heaviest impact was on leisure travelers.
“With more business growth, we expect to have a lower impact,” he said.
McGinness made a similar analysis pointing out the number of people coming to Reno to gamble is decreasing. Among Atlantis customers, he said those there to gamble dropped from 49 percent in 2011 to 42 percent in 2015. While he said many more especially among younger customers are coming for other recreational experiences such as hiking, biking, visiting Tahoe and other such activities, there has also been an increase in the percentage of visitors there on business.
Azam said if and when another downturn hits, the airport’s goal will be to “retain what we have — retention is the key.”
To keep business, he said the airport authority is moving to upgrade and expand to deal with job and population growth by expanding terminals, parking and other facilities.
“We want to anticipate how the airport is going to accommodate that in the coming 20 years,” he said.
Potts said the key for manufacturing and other businesses that make up NNDA’s membership, is keeping an eye on the tourism, hospitality and leisure industry.
“It’s increasingly important to realize how responsive leisure and hospitality is to trends and the economy,” he said adding resorts can react immediately by changing room rates and other services.