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LAS VEGAS IS ALIVE
On August 2, 2010 something special happened for Las Vegas. The metro area of Las Vegas was ranked as America's Coolest City by Forbes Magazine (#1 ranking shared with New York City). One of the most interesting facts about this ranking was that it was an actual survey of over 2,000 real people, with real perspectives, all across America. In fact, Las Vegas ranked highest by Americans aged 18-34, even outranking New York City in that group. This was not a survey just about tourism, this was a survey about whether people actually thought a city was generally 'cool'.
Just think how many cities in the world would love to be called 'cool' by an independent survey (some cities would pay big bucks to be called cool by a major publication). The cool factor of Las Vegas is really a blend of its globally recognized brand, its strong creative culture, the strength of its citizens, and the beautiful diversity of of its workforce. We believe that the Forbes ranking points to the long-term viability and strength of Las Vegas both as a city and as a brand. It does not mean that Las Vegas is just a brand for casino entertainment companies, but a brand that is starting to say: 'If you want to be a cool company, you need to locate in a cool city, and Las Vegas is very cool'. For example, Zappos.com, which is one of America's 'coolest' and largest online retailers of shoes located its headquarters in the Las Vegas metro area several years ago. The company is now a stand-alone multi-billion dollar subsidiary of Amazon.com, is still located in 'cool' Las Vegas, and has hundreds of genuinely happy employees making Las Vegas home.
OUR REASONS FOR LAS VEGAS OPTIMISM
One of the things that continues to bother us, in so many ways, is how negative people have become about Las Vegas from various corners. It seems as though being negative on Las Vegas is somehow 'in Vogue'. We take a different perspective. In our view, anyone who places a bet against Las Vegas will be placing a losing bet in the long-run. There have been many that have placed huge bets against Las Vegas before, and ultimately lost. For example, if a company were to move its headquarters (or part of it) from Las Vegas to Asia, we believe that company would lose something very special. It will lose the respect of the global governments that see Nevada and Las Vegas as a place of creative innovation. It will be disconnected from a market that hosts over 36m people per year, and it will also lose that hard to describe 'it factor' that makes Las Vegas so very special. It's hard to quantify the value-add that Las Vegas provides to companies, but somehow it simply does. Las Vegas is the coolest city in America and its now official. It has been the coolest since the 1950's, so it's no surprise to us. Much of our firm's work is in Asia, and its certainly a very dynamic part of the world, but Las Vegas continues to be a global hub for creative vision, risk taking, and testing new ways to enjoying life. There are so many reasons for the citizens of Las Vegas to be proud and happy for their city. However, things do need to bounce back economically and new job creation in the city needs to start in earnest. Ultimately the free-market will vote as to whether Las Vegas moves forward or not, but as long as the free-market sees Las Vegas as 'cool', the city will move forward. We don't have financial formulas or equations to justify that stance, but we hold that view.
THE LAS VEGAS REAL ESTATE CRASH
The Las Vegas residential real estate market has crashed over the last few years with prices of homes declining over 60% in certain areas from it's peak in the 2006-2007 era. However, we must note that from 2000 to 2005 the Las Vegas metro area posted some of the most dramatic increases in home prices across the United States. Yes, there are certainly numerous reasons to be concerned about the price of houses and its effect on the psyche of the citizens of Las Vegas. The prices of homes are on the minds of nearly every homeowner in the Las Vegas metro area. However, we agree with the Forbes survey that although Las Vegas real estate has declined, it continues to be one of the finest cities in the United States to work and play. Over the long-run, the creativity, passion, and steadfast attitude of the people of Las Vegas will retain a core of 'coolness' that will contribute to the return of Las Vegas real estate prices to their rightful value. Ultimately, people want to live in cool cities and Las Vegas is now officially considered the coolest of them all. Therefore, long-term real estate values in Las Vegas should benefit from this cool brand factor even in the most dire of macro-economic times.
MOVING FORWARD
Las Vegas needs to begin a massive program for economic diversification into areas such as medical tourism, 24/7 .com business models, film/movies, and financial services. It needs to focus on economic diversification now taking full advantage of the fact that the country sees the city as being 'cool'.
We believe that this ranking by Forbes Magazine indicates that the long-term tourism trends, economic viability, financial strength and overall stability of the city is assured. Pessimism about Las Vegas is understandable, but we believe that it should be replaced with a optimistic view that the city is capable of quickly bouncing back.
Finally, we believe that Las Vegas has one of the most underrated and fastest growing Chinatown's of any major U.S. city. We encourage the readers of this research note to visit the outstanding Asian restaurants in Las Vegas located on West Spring Mountain Road on their next visit to the 'coolest city in America'. |
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