• Vince Alberta, vice president of public affairs, Las Vegas Convention and Visitors Authority
• Dan D’Arrigo, chief financial officer and executive vice president, MGM Resorts International
• Bruce Ford, senior vice president and Nevada and San Diego core business banking manager, City National Bank
• Bob Potts, research director, Governor’s Office of Economic Development
• Lisa Santwer, director of marketing and public relations, Comprehensive Cancer Centers of Nevada
• Carla Sloan, state director, AARP Nevada
• Elaine Wynn, chairwoman, Nevada Board of Education
• Robert Young, chairman, Asian Chamber of Commerce
What did Southern Nevada’s business community learn in 2013? And what’s the forecast for the year ahead?
VEGAS INC assembled a panel of eight local businesspeople for a roundtable discussion about where we’ve been and where we’re headed.
The takeaway: The economy is improving — slowly.
How did your industry fare this year, and what lessons did you learn?
D’ARRIGO: The one overriding factor is that we’ve been the hardest-hit economy in the country. Although it has been a slow recovery, it has been a steady one. We saw slow recovery in 2011, then again in ’12 and ’13. The good news is that we’re recovering. The economy is moving in the right direction, and we’ve learned a lot from that.
We’d all love to see the kind of recovery we had in years past. It was always a hockey-stick recovery where we’d bounce back in months rather than years. We’re all a little frustrated by the pace of the recovery, but we take solace in the fact that we’re heading in the right direction.
POTTS: We’ve seen almost 2.5 percent growth in the sectors we work with. The economy as a whole, if you’re looking at jobs, saw about 2 percent growth. The work that we’re doing is playing out.
Economic development has helped create about 7,000 jobs across the state. Between those and others created by business, we’re going to see about 23,000 jobs added to the state economy this year. The governor’s goal was to get 50,000 jobs by 2014, and we’ve already met that goal.
Growth the year before was 1.5 percent to 1.8 percent, so we’re doing a little bit better than that now.
Businesses got burned pretty badly, so there’s an uncertainty. They need to be profitable before they can hire, and they need to be comfortable that the profitability is going to be sustainable.
YOUNG: We saw a lot of stabilization during the second half of 2013. We’ve seen a lot of small business owners come not only from out of state but from China. Our goal is to bring Chinese capital into the United States, specifically to Las Vegas. Some of them are phenomenally big projects, but the managers want to keep them confidential, which is why no one has heard about them.
WYNN: Nevada has prided itself as a state that is recession-proof, and when the economy would falter elsewhere, we’d seem to be able to skim through it. When the end finally came and we crashed along with everybody else, there was a bit of comeuppance and we were suffering from our hubris. The only silver lining was that it forced us to really understand the relationship between construction, housing and the ongoing development of the gaming industry. It showed us where our failures were and how we couldn’t be so cocky.
As for the gaming industry, we are coming to terms with the competition, not only nationally but internationally, and the fact that the revenue mix is changing. In the old days, gambling was king. Now we understand that in the menu of choices, gambling no longer is the significant revenue driver it once was, so we have to be clever in being innovative and creative.
But we have a wonderful infrastructure that nobody else in the world has. I think that bodes well for the future.
The brightest light I see is the amazing burst of technology-related incubation here, a la Zappos and Switch. It’s bringing in young professionals who are highly educated with their families who will demand of this community the ongoing development of resources that are typical of great cities.
SLOAN: We certainly saw people delaying retirement and staying in the workforce longer. In many ways, that’s healthy for an economy because it gives you people with a history who can mentor younger workers. People who may have hoped to retire at 60 may be staying until they’re 65 or longer.
Those who lost jobs are finding it takes longer for recovery. For workers who are 50-plus years old, it typically takes a year longer to find work than someone under the age of 50.
SANTWER: Since Jan. 1, we’ve experienced a 3 percent increase in employment growth. Even through some of the difficult recession years, we continued to grow and recruit physicians. I don’t know if it was because of our specialty, but we were steady and stable, which we are grateful for.
The thing that we’re most concerned with was what happened with sequestration, which really impacted Medicare and our elderly patients, particularly those on cancer-fighting drugs. A lot of those drug manufacturers are underwater, so we’re coming out of pocket to provide those to our patients.
ALBERTA: The brand of Las Vegas continues to be strong, and there’s still demand to come to Las Vegas. The tourism and hospitality industry has really led the recovery. Since November 2009, it has added more than 22,000 jobs.
The new dynamic is the consumer. They are more price-conscious. Still, the daily room rate is up 3 percent this year, and we have a chance to set a record for visitation again.
If you look at the long-term confidence shown by the $9 billion in projects announced by our resort partners, the business community still believes in what Southern Nevada has to offer. There’s a lot of work to do, but I think we’ve stabilized, and now it’s a steady recovery.
FORD: Financially, many banks are struggling, and we’ve seen real consolidation in the industry. But financially strong banks are flourishing. We’re seeing a real flight to quality because at struggling banks, people are nervous. Some banks have closed in the last few years, so people have withdrawn their money and looked to the stronger banks.
At our bank, we’ve seen deposits explode by $2.7 billion in the last 12-month period, and we’ve seen that pattern in the last few years. Our loan growth is up 21 percent in the last 12 months. We’re flush with cash because of the flight to quality on deposits. And we want to loan it out to high-quality borrowers.
But if you’re a weak bank under some regulatory prohibition, you’re struggling.
Should we be optimistic for 2014?
WYNN: It depends. If you’re talking about Nevadans with a pioneer spirit, it’s as alive and strong as ever.
All we’re thinking about in gaming is how we analyze the markets, what needs to happen to be innovative, appealing and attractive and what barriers could prevent that from happening. There’s no place else in the world that has what Las Vegas has to offer, and the value is unlike anyplace in the world. The MGMs and Sands and Wynns of the world are entrenched, so we’re optimistic that we can make that promise. The question is: Can we keep the promise if consumers get skittish and they opt not to be frivolous?
It’s all about market analysis and consumer confidence.
ALBERTA: The U.S. Travel Association recently came out with its economic forecast for 2014, and they project spending will be up 4.5 percent by travelers next year. It will be up 4 percent by the domestic traveler and 7.5 percent by the international traveler.
Separately, American Express came out with its meetings forecast and suggested that attendance would be up a little less than 1 percent, but the number of conventions held would be up 2 percent.
It goes back to there being steady, gradual growth.
POTTS: The reality is that so much here depends on consumer confidence. If you look at what’s been going on for the last four or five years, it’s slowly improving. But we’re still not back to the levels of 2005 and 2006, and when something happens like the debt ceiling debate, it plunges down again.
The numbers I see out there is that it’s going to be 0.5 percent to 1 percent greater than in 2013, and everything was positive in 2013. Income is up 3 percent. Jobs are up 2.5 percent. The population is up another 1.5 percent. We’ve seen a nice rebound in construction. We’re not seeing declines anymore, but it has kind of leveled out in the last couple of months.
FORD: Our economic indicators show that new job creation and wage increases will continue to support increased consumer spending. We expect interest rates to remain low but will increase gradually. That’s still good for us, because it should help housing and business spending.
What message should be sent to lawmakers regarding the 2014 budget?
YOUNG: When I was growing up in Taiwan, the mom in each household would save a little of the dad’s income instead of spending it all. Unfortunately, our system here is built around credit. Every household has credit cards.
The nation could take a lesson from Eastern culture and save a little instead of spending every penny and using credit. We’d be in better shape. My advice to lawmakers is save it for a rainy day.
D’ARRIGO: At some point, you’ve got to fix the problem. You can’t keep kicking the can down the road and putting it off for another day. That’s what we keep doing in Washington.
Until that’s done, you’re going to see a lack of consumer confidence, and people are going to be skittish.
WYNN: If we could return to local control and local decision-making about resources, it would help. We’re always frustrated when the Legislature leaves work undone. Ruling by referendum is a poor way to allocate and manage resources.
We have a system of representative government. Legislators are charged with making decisions on issues that have been deeply vetted on our behalf. When they throw their arms up because they’re frightened and say, “No, I can’t do it,” we wind up with a whole series of things left for the general population to decide that are way too complex to comprehend. I think it’s a poor way for us to govern.
SLOAN: If we could send a message to our federal and state legislators, it would be to set priorities and back those priorities with proper funding.
I was in the state’s aging services division when Gov. Kenny Guinn did his fundamental review of state government. It was his goal to determine what our priorities needed to be and to create a long-range vision for the state with adequate funding for education, health care and services for our citizenry that we could agree upon.
I feel like we have gotten away from that, both federally and locally.
What do you expect for your industry in 2014?
FORD: We’ll continue to improve, but we have to better position ourselves as the market changes and improves. We really want to make more loans because that’s how we make money.
ALBERTA: We’re looking to have 40 million visitors in 2014, and our projection is to have 44 million by 2020.
We’ll continue to work on our Las Vegas Global Business District, work with our resort partners on booking meetings and conventions, and work with the airlines on our brand marketing. We are focused to continue to leverage Las Vegas to get more people here and increase their spending.
SANTWER: I see more single and smaller physician offices becoming part of larger health care organizations to share costs. I believe larger groups will become even more multidisciplinary, offering a variety of services under one umbrella, which ultimately is better for the patient.
There will likely be exclusive contracts with some of the larger groups, which already is happening with the Culinary Health Fund. The exclusive contract is a benefit to the patient as there is a continuum of care that is transparent and accountable between the health care organization and the insurance provider. This type of health care delivery model ties provider reimbursements to quality metrics and reduces the total cost of care for patients.
Additionally, I believe there will be more specialized focus on research and clinical research trials to further advance medicine in specialty areas. Medical care is moving in the direction of personalized medicine with pathways and measurable patient outcomes.
Health care organizations will continue to work together, for not only the common good of the patient but also to help improve the overall perception of health care in our community.
SLOAN: As we move into the future, we’re not talking as much about retirement security as we are about financial planning for all ages.
In Nevada, our priority is going to be around care giving. One-third of Nevadans 50 and older are caregivers, and that will only increase. That’s an area we’ll be more visible on, building coalitions in the state to address the needs of caregivers.
WYNN: In education, we’re going to continue to forcefully execute this marathon of raising expectations for our students who deserve to have higher expectations so they can increase their achievement. And we’ll try to communicate the very complex notions surrounding the Common Core standards movement, which unfortunately has been mythologized but is a vitally important thing.
At the same time, we’ll be valuing our educators and not scaring them to death with the notion that testing and accountability are going to be used to beat them up and get rid of them. On the contrary, we’re trying to make them the profession we know they can be and should be.
We also acknowledge that this is a marathon, and we can’t do this in one year. But we’re going to keep our pedal to the metal and try to convey that message.
YOUNG: On the Asian chamber side, our worst year was 2012, but things improved this year. Attendance was up for events like our scholarship fundraising golf tournament, and we’re looking to reach higher levels in 2014.
On the fund management side, we’re working with banks in China to finance investments in Southern Nevada.
POTTS: I’m pretty optimistic about what’s coming down the road. We have a really strong base to build on, and as we diversify, we’re going to grow into the mature economy we want to be. It’s an economy that meets all the needs we’ve talked about, whether that’s for the elderly, for our kids so they have a really good job when they get out of school, or for our education system.
I think we’re on the right path, but it’s going to grow at a sustained and modest pace. I think businesses are being really careful because of all the uncertainty out there — the Affordable Care Act, frozen legislation and a whole host of things. But careful is good, right? At least we can be strategic and establish priorities. We can think before we jump.
D’ARRIGO: I am optimistic, as well. Look not just at this state but across corporate America. Balance sheets are much stronger today than they were in the past few years. Companies have done a lot of things to fortify and strengthen themselves.
There is skittishness and uncertainty, but I think we’ll continue to see people reinvesting, particularly here, where we’re constantly reinvesting in our offerings and expanding.
The one thing that’s going to continue to separate us as a community is continuing to reinvest in human capital, which we’re doing with recruitment and training. That’s really the key to provide the long-term legs we’ll need as a community. It’ll be gratifying in years to come when we see the impacts of that.