Nevada, the entertainment capital of the world, attracts millions of visitors each year. The over 38 million out of staters that visited last year generated over $940 million in revenue, which made tourism quite literally the lifeblood of the state economy.
The COVID-19 pandemic devastated Nevada, which in many ways is still struggling to get tourism back to pre-pandemic levels. While the state may not face another pandemic anytime soon, its economy is now threatened by a different virus: inflation.
Inflation is a tax on the working class. It eats away wages and drives up the cost of food, travel, transportation, and energy. According to one analysis, inflation is impacting Nevada more than almost any other state.
The Census Bureau reports that energy and food costs are the main drivers of the inflation spike, which has caused 47 percent of Nevada families to report struggling to pay household expenses. Given how dependent the Nevada economy is on tourism and consumer spending, it’s important for state and federal decision makers to resolve this inflation-induced strain on the state’s revenue and job growth.
Keeping travel costs down will prove critical to improving Nevada’s economic outlook. Lower prices will mean more travelers, and more travelers will mean more visitors, jobs, and revenue.
Gov. Joe Lombardo has proposed several measures to ease inflation, including suspending the state’s gas tax, decreasing the modified business tax rate to 1.17 percent, and raising the threshold for businesses subject to the Commerce Tax. All these policy initiatives will make it easier for Nevada businesses to provide tourists with the cheap goods and services they have come to know and expect.
The governor and state legislature should also work to boost the Nevada tourism industry by encouraging the Department of Justice to stop blocking new flights into and out of Harry Reid International Airport.
For example, JetBlue has already announced that if the DOJ approves its acquisition of Spirit Airlines, it will have the scale it needs to expand its flight offerings so it can compete more effectively with the legacy airlines that keep ticket prices high.
That’s good news because with airline ticket prices currently outpacing the rate of inflation by 25 percent, the high cost of airline tickets is discouraging travel to the Silver State more than anything else. Although a recent University of Nevada at Las Vegas analysis predicts that prices may soon rise even more, the DOJ allowing more competition from JetBlue, which the Massachusetts Institute for Technology considers to be a proven cost-cutter, can mitigate this affordability crisis, significantly increasing Nevada’s tourist traffic.
Nevada’s senators should also continue proposing legislative measures that would force the Department of Transportation to take boosting travel and tourism into account when making key infrastructure decisions.
For far too long, the needs of tourism-heavy states like Nevada have gone unrecognized in the government’s internal improvement talks. As a result, many of the Silver State’s roadways are unequipped to handle the millions of visitors it receives annually. This affects everything from commerce to commutes, and it’s long past due for the state’s federal policymakers to fix this unmistakable public policy oversight.
Chuck Muth is president and CEO of Citizen Outreach and a professional political adviser. He also is a former executive director of the American Conservative Union, a former National Chairman of the Republican Liberty Caucus, a former county GOP chairman, state party executive director, communications director, press secretary, direct mail fundraising consultant and legislative candidate.