Las Vegas destined to be next Rhyolite?

In the early 1900s, Rhyolite was a booming Nevada metropolis.

The gold rush brought thousands of miners, prospectors, developers and businesses to the town. Leaders invested heavily in infrastructure, adding a railroad station, electric lights, water mains and telephones to service a community that by 1907 had an estimated 12,000 residents.

Rhyolite dried up when the gold ran out. Today, the area four miles west of Beatty is Nevada’s most famous ghost town.

I offer this Nevada history lesson because some wags last week suggested Las Vegas is on its way to becoming the next Rhyolite.

That’s a stretch.

At Global Gaming Expo Asia in Macau, gaming leaders said Singapore would pass the Strip this year as the world’s second-most lucrative casino market. Macau is the largest producer of gaming revenues on the planet since 2006.

The rankings are interesting because it didn’t take Asia much time to leap over Las Vegas.

But the Strip does not survive on gaming alone.

Consumer spending on dining and other forms of entertainment has surpassed gambling. And Las Vegas is the only destination in the world with 150,000 hotel rooms.

Economist Jonathan Galaviz of Galaviz & Co., a consulting firm that provides economic research to companies in the United States and Asia, said Las Vegas generates 144 million room nights a year, more than four times that of Macau and Singapore.

He said Las Vegas is the world’s best case study for using gaming as a tool to drive tourism economics.

"While gaming revenues in both Macau and Singapore might be greater than Las Vegas, the tourism economy in Las Vegas is more powerful than both of those places combined," Galaviz said.

Las Vegas Convention and Visitors Authority President Rossi Ralenkotter said gaming provides just a portion of the $37 billion spent by visitors to Southern Nevada in 2010.

"You have to look at the destination as a whole," Ralenkotter said. "Thirty years ago, we were a regional destination. Las Vegas has now evolved into a brand. We’re still considered the ‘Gaming Capital of the World’ and everyone wants to be like us."

Even with the apples-to-oranges comparison, gaming numbers coming from Asia are impressive.

Macau had a casino monopoly controlled for more than 40 years by Hong Kong billionaire Stanley Ho. The market was opened to new operators in 2002, when the Portuguese colony became a Special Administrative Region of China.

It took Macau only four years to pass Las Vegas in gaming revenues. Last year, the region’s 33 casinos produced an astonishing $23.5 billion in gaming revenues, four times the $5.8 billion produced by the Strip’s 43 properties.

Analysts said Macau, which had $3 billion in gaming revenues in May, could see the figures climb more than 30 percent this year.

Singapore, it appears, will take less than 24 months to exceed Las Vegas.

Genting’s Resorts World Sentosa opened in the city-state in February 2010, followed two months later by Las Vegas Sands Corp.’s $5.5 billion Marina Bay Sands. The two casinos produced $5.1 billion in 2010 and are expected to report gaming revenues of $6.4 billion when 2011 wraps up.

The numbers have grown quicker than many expected.

Galaviz said there was a tremendous amount of pent-up demand in the region for gaming. Visits by Singapore residents to the casinos, despite a $100 per person entry fee, were higher than originally expected.

"Singapore has more millionaires per capita than any other country in the world," Galaviz said.

The good news? Galaviz doesn’t believe additional Singapore-style gaming locations will pop up over the next few years.

Las Vegas tourism leaders are targeting Asia as part of an overall plan to grow international visitation from 18 percent of the overall market to 30 percent. Additional direct airline flights from the Pacific Rim are in the strategy.

The idea is to keep Las Vegas vibrant in the face of Asian competition and brush off any Rhyolite comparisons.

To paraphrase author Mark Twain, who lived in Nevada during the mid-1800s, "reports of Las Vegas becoming a ghost town are greatly exaggerated."

Howard Stutz’s Inside Gaming column appears Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. He blogs at lvrj.com/blogs/stutz. Follow @howardstutz on Twitter.