Airline cuts, gas woes are leaving Las Vegas blue

Soaring fuel prices are forcing airlines to cut flights and jack up fares to Sin City. Road trips have become luxury.

And tourists who do make it to Las Vegas are spending less, leading casinos to offer deals just to keep them in their resorts.

"The overall economic uncertainty this country is facing ... makes the outlook for the next several months very murky," said Gary Thompson, spokesman for Harrah's Entertainment, owner of seven Las Vegas casinos.

US Airways Group announced it was cutting nearly half its Las Vegas flights as part of companywide belt-tightening. That will leave 74 US Airways flights per day by the end of the year, down from a peak of 141 in September 2007.

The result is more than 8,000 fewer seats per day, compared with the 2007 peak, according to data from the Clark County Department of Aviation. US Airways was the second-largest carrier to Las Vegas behind Southwest Airlines.

"We've seen airlines increase and decrease service periodically. Clearly, never to this extent all at once," said Alan Feldman, a spokesman for MGM Mirage, which owns 10 casinos on the Las Vegas Strip and plans to open CityCenter next year.

The flight cuts are another hit in what is shaping up to be a rough year for Las Vegas casinos.

"As far as filling the rooms, the lack of airline service I think is going to have an impact on the entire community," Thompson said.

Nightly room prices were down 4 percent in Las Vegas compared with one year ago and gambling revenue was down 3.7 percent, according to data through April from the Las Vegas Convention & Visitors Authority. Total airline passengers through April were down 1.8 percent and traffic from California was down 4.8 percent.

With the airline industry expected to lose $2.3 billion this year, airline-industry analyst Robert Mann said it may be up to big casinos to subsidize travel into Vegas, by land and by air.

But the gambling industry in Las Vegas and Atlantic City is bracing for a hit this year, too.

Nevada will see revenues dip this year and next year, to $12.4 billion in 2009 compared with $12.8 billion in 2007, according to a forecast of worldwide gambling by PricewaterhouseCoopers LLP.

The financial consulting company said it expects Nevada to rebound in 2010 and see gambling revenue grow to $14.8 billion in 2012.