Money talks: Less gambling, more clubbing in Vegas
Whether traveling with tight pockets or loosely tossing around cash, visitors to Las Vegas can find the ultimate playground for adults. From high-end shops and penthouse suites to day clubs and pool parties, they spend tens of billions of dollars in total here a year, with the younger demographic dropping less on casino tables and ponying up more to party in clubs.
"I think the younger generation is a little bit more entertainment focused and less focused on gambling than the older generation," said Stephen P.A. Brown, the director of the Center for Business and Economic Research (CBER) at the University of Nevada, Las Vegas.
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Nearly 40 million visitors to Vegas last year dished out a total of $27.4 billion across the city, according to the Las Vegas Convention and Visitors Authority.
Yet money spent on nongaming activities since the Great Recession is recovering faster than gaming revenue, according to the CBER.
Last year, gross gaming revenue on the Strip was $6.5 billion, according to the Nevada Gaming Commission. And travelers on average spent nearly 1½ times more on food and beverage, which includes many clubbing expenses, than on gambling.
The young shift spending
As millennials have become more of the visiting demographic, this spending shift, which has been happening for some time, is increasing, Brown said.
When tourism to Vegas began picking up in late 2010, travelers in their 20s and early 30s started coming back more quickly; and doing so as if they were discovering Vegas for the first time, and in a less traditional way than decades past, he said.
"Gambling is like an incidental activity for the young visiting Vegas. They'll gamble a little but they're not recreating the Rat Pack days," Brown said.
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And as millennials look to actively participate in social interactions, the draw to see top DJs like Tiesto, Kaskade and Calvin Harris is the big attraction. Nightclubs have always been popular, but the lure for day clubs, where DJs at hotel pools play for thousands dancing in swimsuits, has grown.
"Strip clubs really are not the focus of the city," Brown said." It's the day clubs and pool parties, nightclubs and restaurants where people interact with other people, and not with hired entertainers, that are more of the draw," he said.
Capitalizing on clubbing
Successful businesses have capitalized on this spending trend.
From multileveled dance halls that occupy tens of thousands of square feet to exclusive VIP spots with $100,000-plus bottles of champagne, the average traveler spends less than a grand per visit but the sky is the limit for what money can buy in Sin City.
Clubgoers wanting to make the grandest entrance of all can spend $5,000, more than five times as much as the $837 total spent by the average visitor, to be carried into one club on a sedan chair and placed in front of a large crowd to then have the DJ personally greet them.
Those looking for ultra extravagance can drop $10,000 on a rare cognac and champagne blend sold at one club. This luxurious cocktail comes served in custom, gold-rimmed glassware, along with sterling silver cuff links and an 18-karat gold, black pearl and diamond necklace on the side.
"I think in some ways you could say Vegas has stayed the same, it constantly reinvents itself to match the shifting trends in the population," Brown said. "Back in the early '80s when boomers had kids, Vegas made itself into a family destination. As people lost interest in bringing kids to Vegas, it shifted to a more adult-oriented destination."
Regardless if travelers come for the bright lights or business, American's love affair with Las Vegas remains strong, so much so they made it their top spot for travel three years in a row.
—By CNBC's Jeanine Ibrahim.
Catch a glimpse into Las Vegas' world of sports betting on "Money Talks" Wednesdays at 10 p.m. ET/PT.