Diversifying visitor demand and its impact on Las Vegas's tourism industry during recovery from the Great Recession

This paper analyses the transitionary economic impact of the post-recession recovery on the tourism industry in Las Vegas. The signs of early recovery in this study are measured by the increasing household income in Southern California (SCA), the most important origin of visitors to Las Vegas. To estimate the multiplier effects of the Las Vegas tourism industry into its neighbouring regions, we employed a social accounting matrix within a multi-regional input-output model. Our test reveals that intra-industry diversification of the tourism industry in Las Vegas is driven by the changing visitor demand of middle-income classes from SCA. Through the multiplier effects of Las Vegas's tourism industry, Northern California gets the largest ripple effects, followed by Southern California. Findings from this study contribute to further develop effective strategies for ongoing diversification efforts of Las Vegas's tourism industry. Proposed approaches are also applicable to identify the major source of changing demand for tourism activities and to estimate the potential effects through interregional industry linkages.