The Economics of the Ride

How much is NFR worth to Las Vegas? And can we keep it here?

Jerry Jones is jealous. He’s been making noise about luring the National Finals Rodeo away from Las Vegas to fill his ultramodern 80,000-seat Cowboys Stadium near Dallas. And Las Vegas stadium proponents, in turn, have argued that the only way Las Vegas can hold onto NFR long-term is to build a massive stadium of our own. Right now, for instance, the NFR-saving plan du jour is UNLV Now, a campus makeover that includes a 60,000-seat stadium. Something to be said for being vigilant, but NFR to Dallas is anything but a done deal. For one, NFR falls in the middle of football season, meaning a move to Dallas would likely mean a shift to January, long after the Cowboys’ playoff hopes have safely collapsed. That doesn’t match the Professional Rodeo Cowboys Association’s schedule as well as an early December date. But the real story of why NFR will likely stay in Las Vegas can be told by looking more closely at its economic impact.

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Last year, about 45,000 people came to Las Vegas for NFR. The total event attendance was 172,000, meaning that’s the number of times the turnstiles spun over the 10-day rodeo. Many people, of course, attended more than one event. The total nongaming impact was estimated at $60.1 million. In other words, when all was said and done, those 45,000 visitors spent, on average, $1,350 each in Las Vegas. Assuming that they bunked up two to a room, about 15 percent of the city’s 151,000 hotel rooms were occupied by rodeo fans at some point in early December.

It’s worth remembering that since many tickets are given to top casino players on a package basis, there’s also a considerable gaming impact that isn’t captured there. And any event that adds $10 million a day to the local economy is significant.

NFR, though, isn’t the biggest multiday event to strike Las Vegas during the typical year. In March, NASCAR fans—112,250 of them, to be precise—came to town for the Kobalt Tools 400 race, triggering an overall non-gaming impact of $176.6 million. That breaks down to about $1,575 per fan, significantly more than NFR. And, if we’re counting heads in beds, NASCAR fills (approximately) 37 percent of the city’s hotel rooms, more than double the rodeo rate.

So why does NASCAR get nowhere near the attention of NFR?

It’s mostly because of timing. December is a deathly slow month for hotels around the country and Las Vegas in particular. Even counting the New Year’s Eve windfall, the month’s gaming revenue is typically one of the lowest on the calendar. March, on the other hand, is jam-packed with conventions, St. Patrick’s Day and a little NCAA basketball tournament that draws a healthy contingent of sports bettors to town.

Imagine the December dead zone with about 22,500 fewer hotel rooms occupied. Already, December is a month when casinos often take rooms offline for maintenance, reduce restaurant hours and let showrooms go dark. Without NFR, casinos would likely cut back even further.

Hourly workers would see their schedules further reduced or even cut entirely, probably for the entire month between Thanksgiving and shortly before New Year’s Eve. In other words, they’d be looking at more than a half-empty stocking on Christmas morning: the lost wages mean missed mortgages and rent payments. Hospitality remains the core industry here, so the ripple effect across the Valley would be profound.

That’s why, as PRCA’s contract to host NFR in Las Vegas gets closer to expiring in 2014, there’s going to be some heavy-duty negotiating going on. Because, despite the yeoman’s work of both the Las Vegas Convention and Visitors Authority and the individual hotels, no one’s found much outside of the rodeo to draw crowds and dollars during early December.

But NFR would need to think twice before leaving. It could find few cities with the hotels and entertainment venues that make the event a 10-day party—and none that would do it as affordably as Las Vegas. While the Thomas & Mack Center—which has 19,500 seats for rodeo—could fit four times inside Cowboys Stadium, many fans come not just for the rodeo itself, but for the bigger NFR experience. And that experience would be a whole lot less fun if it weren’t in Vegas.

So the NFR/Las Vegas marriage will most likely continue. It might be born of convenience, but over the years, it’s blossomed into true love on both sides.

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