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Jeremy Aguero will speak on the economy at Preview Thursday

One of Las Vegas’ biggest cheerleaders of its gaming and hospitality industry is sounding the alarm about the lack of developable land in the valley and the national economy’s potential impact on tourism and spending while boasting how sporting events and entertainment have helped overcome some of those concerns and boosted the city to higher levels.

Jeremy Aguero isa principal at Applied Analysis, a Las Vegas economic research firm that has worked on $2 billion Allegiant Stadium and the A’s planned $1.75 billion baseball stadium. He will speak Thursday at the Vegas Chamber’s annual event, Preview Las Vegas, at the Las Vegas Convention Center.

“I believe a reckoning is coming,” Aguero said at a Las Vegas gaming conference. “We in the United States have gone through a remarkable cycle. We have dealt with COVID and how we go through it was an unprecedented level of stimulus. We have seen a tremendous amount of spending activity that has taken place, and the United States has been operating on what is essentially a sugar high for the better part of the past two years.”

Aguero said looking at how households are performing, debt is at the highest level they’ve ever seen in terms of new debt. He cited the rising U.S government debt and how businesses are being impacted as consumers deal with the reality that their level of spending isn’t sustainable.

“We in Southern Nevada have arguably benefited from the best economic market anywhere in the United States for the better part (of several years),” Aguero said. “We have benefited unbelievably from investments in transportation, modern infrastructure, venues, hotels and casinos that have created prosperity. The greatest risk that we face is complacency as a state and community to believe those investments that our prosperity has been by chance or circumstance or good luck, and that it’s just going to continue to happen. I don’t believe that’s the case. I believe that, today, our households, government and businesses are being propped up by an unsustainable level of consumer spending. That has real economic consequences.”

While inflation has taken a toll on consumers, it fortunately hasn’t translated to spending on entertainment as people are willing to pay for experiences, Aguero said.

“We’re the right idea at the right place at the right time,” Aguero said. “It has worked out incredibly for us as a community.”

Outside of tourism, Aguero Las Vegas has plenty of problems to overcome. He brought up how the valley is running out of developable land, and it’s that growth that has fueled development over the decades. There are 36,000 acres of private property within the federal disposal boundary that Congress hasn’t expanded despite repeated efforts by Nevada.

That’s vital because much of the prosperity hasn’t come from an increase in wealth among people in the valley but the wealth that has moved into Las Vegas over the decades, Aguero said. Congress needs to act to expand the boundary of Las Vegas development to allow that growth to continue, he added.

People who moved into Las Vegas in the 1980s, 1990s and 2000s had incomes 20 percent lower than the people who lived here. Those moving in today have incomes that are 20 percent higher, Aguero said.

“The fact that it has not happened today means it’s going to slow down,” Aguero said of growth. “We have 8½ years of developable property left in the urban valley at current growth rates. Why are we seeing prices rise? It’s economics 101. If you don’t have enough supply and you continue to have demand, prices are going to rise to establish equilibrium. You have households that can’t afford a home. You have businesses that slow down in terms of relocation and finding a place to expand — all of which we are seeing today.”

Just as it did in the aftermath of the Great Recession in the late 2000s and early 2010, Las Vegas growth rate has slowed to 2.2 percent between 2021 and 2023.

“We have gone to one of the fastest metropolitan areas in terms of growth to the middle of the pack,” Aguero said. “We are seeing increased levels of migration out of California to places like Boise, Salt Lake City, Arizona and even Nashville are capturing greater shares of population growth,” according to Aguero, who also highlighted migration out of Las Vegas as well.

Businesses continue to have trouble recruiting people to fill the job openings as job creation remains one of the highest in the country with other industries growing faster than tourism to help foster economic diversity, Aguero said. The leisure and hospitality industry has grown by 3.6 percent between 2014 and 2024. By comparison, manufacturing has grown 51 percent; financial, 34.6 percent; construction, 89 percent; education and health services, 53.5 percent; professional and business services, 41 percent; and trade, transportation and utilities, 32 percent.

“We have added more new businesses pound-per-pound than anyone else in the United States,” Aguero said.

Construction has been the biggest growth sector in the past 12 months, which Aguero called concerning and how it’s two times the size it should be for an economy the size of Las Vegas and something that’s not sustainable.

Home affordability and housing shortages continue to be a problem for future growth, Aguero said. Some 70 percent of homeowners in Southern Nevada couldn’t repurchase the home they are currently living in if they had to, he noted.

“Only 15 percent of the households in Southern Nevada can afford a median-priced home,” Aguero said. “That is not a formula that created the economic prosperity that we have in Southern Nevada, today.”

While there’s problems to overcome, there are positives with Las Vegas with its sports economy as evidenced by the impact of the $2 billion Allegiant Stadium, Aguero said. He cited how a Stanford professor said building the stadium with $750 million in public funding was the worst economic development deal in the U.S. because it wouldn’t attract a large amount of out-of-town visitors as projected.

Aguero said they originally expected 23 percent of those who attend Las Vegas Raider games to come from outside of Las Vegas but it reached 53 percent in 2023. It’s generating twice the amount of revenue necessary to fund the bond payments for Allegiant on a yearly basis and that revenue will continue to go up, Aguero said.

Overall, the sports economy generates 3.2 million attendees at 24 venues and 324,000 seats — more than Las Vegas and New York combined. He cited UFC, NBA Summer League, Super Bowl, F1 and others.

“We have more money for schools and police and fire and all the things for state and local government services,” Aguero said.

There are $29.5 billion in projects planned, proposed and under construction, Aguero said. That sets the stage for continued prosperity.

“When you have 150,000 hotel rooms and 300,000 leisure and hospitality employees and Harry Reid (International) Airport about seven times the size it should be in a community like ours, your ability to leverage those assets are unbelievable,” Aguero said.

The NBA Summer League drew 137,000 visitors in 2024 and had a $125 million economic impact. The Super Bowl in February 2024 had $1 billion in economic impact and when the Final Four comes in 2028 it will have $300 million in economic impact, Aguero said.

The surveys from the Las Vegas Convention and Visitors Authority show the success. Some 73 percent of fans said live sports added a new dimension to their visit to Las Vegas, and 56 percent said it gave them a reason to visit the city. Sports visitors spend $1,641 compared to $1,309 for others in 2023.

“The big reason for the increase in spending that we’ve been having is sports and entertainment,” Aguero said. “We think about all the things we did to fill hotels. The younger generation is coming to Las Vegas for a sporting event or entertainment.”

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