The Las Vegas Taxi Industry As a Leading Economic Indicator?

Despite the fact that the U.S. economy continues to suffer through an anemic recovery from a deep recession, there are modest signs of life in Las Vegas. Visitors are slowly returning, although the economic challenges of the past few years have changed the way people behave (read spend) during the course of their visit. This is certainly to be expected and the tourism industry in southern Nevada is just happy to see people coming back slowly but steadily, even if the good old days are still very far out of reach. Traffic at McCarran Airport continues to improve steadily with June posting the best numbers in almost four years. Through May of this year visitation numbers have increased incrementally for fifteen straight months, another sign that Las Vegas hasn’t lost its power to attract recreational attention (and dollars). Even gaming revenue numbers experienced a modest surge this spring, although it is hard to tell if this is sustainable through the remainder of the year. In any event, the preponderance of evidence strongly suggests that the Las Vegas Strip is slowly coming back to life. As a corollary to this modest rebound in tourism related activity, the real estate market in Nevada continues to attract aggressive cash buyers hunting for hot foreclosure deals in a city that is sure to bounce back more strongly over time.

Here is an interesting addition to the statistical evidence that the Las Vegas Strip is staging a comeback. The taxi industry is surging ahead with revenue numbers that are anything but modest. No joke, the cab business in sin city is posting double digit revenue gains while the neighborhood they service 24/7 (Las Vegas Blvd and the airport) is happy for anything in the “plus” category. Would you believe that June 2011 was the best June in the history of the industry? A huge special event at the Las Vegas Speedway (a great opportunity for large fares) helped to boost the numbers, but even that doesn’t account for the totality of the gains. In fact, if you examine the first half of 2011 as a whole, this years revenues have bested previous year numbers every single month. Why would the taxi industry be leading the way with double digit gains even as the city struggles to maintain forward momentum overall? It makes sense if you think about it. Other than walking (which gets old pretty quick) a cab ride is the best way to get from hotel to hotel at a modest price. Every resort on the Strip has a generous supply of limousines and town cars staging at the main entrance, but for those watching what they spend a taxi ride is a much cheaper alternative. Maybe it’s time to introduce a new leading economic indicator to gauge the future prospects of the southern Nevada tourist industry? Let’s call it the Vegas Cab Fare Index!