Ridership increases
More people were riding the Las Vegas Monorail last month than in any time since late 2005, but turnstiles still weren’t spinning fast enough for the struggling rapid transit line to pay for itself.
In June, the monorail carried an average of 23,790 riders per day, the highest average since 25,788 people took the monorail each day in November 2005, according to statistics released Friday.
But at the current average of $3.77 in fares collected per passenger, the monorail would need a daily average of 32,625 riders to generate $123,000 in revenue needed to balance the monorail’s books, according to an estimate made in 2006 by Fitch Ratings, a New York City-based credit ratings firm.
In the past three months, the monorail has brought in only around $85,000 a day in farebox revenue, a gap it has largely been unable to close throughout its operating history.
Since opening to the public on July 15, 2004, the $650 million, four-mile line behind the east side of the Strip has failed to turn a profit and has seen its credit rating fall to “junk” status.
The monorail is believed to have lost around $20 million last year. The losses are being covered for now by a sizable reserve fund, but Fitch said that could start running out of money as soon as 2008.
Nonetheless, monorail officials were happy with the latest turnstile counts, “attributed to a combination of ongoing promotional and marketing efforts, as well as continued strong visitor volume and demand for transportation options in the Las Vegas resort corridor,” Ingrid Reisman, a Las Vegas Monorail Co. spokeswoman, said in a statement. “Our community and millions of visitors will continue to benefit from this privately-funded, environmentally-friendly resource.”
June was the fourth straight month the monorail topped 20,000 daily riders, a target it had failed to reach in the second half of 2006.
The monorail averaged 20,827 daily riders in May, 22,285 riders in April and 20,552 riders in March.
Traditionally, the monorail’s strongest ridership months are between March and August.
When the monorail first opened three years ago, project leaders said they anticipated more than 50,000 riders a day by now, a target that is no longer considered realistic.
Monorail officials are banking on marketing partnerships with Strip resorts to further boost ridership and revenues before year’s end.
They also expect a planned extension to McCarran International Airport to entice new riders to the system.
But, given the monorail’s weak finances and poor credit record, analysts are uncertain how the monorail company will come up with the $500 million needed to build the McCarran leg, which would open no earlier than 2011.
If the monorail should go bankrupt, taxpayers are not obligated to underwrite a bailout.
An insurance company and bondholders would absorb the loss, minus some sort of voluntary plan offered by the public or private sectors.
