Vegas

To arrive in Las Vegas is like meeting an old friend. However, this time our friend was a bit sick. Pretty high fever 105 degrees Fahrenheit and some open wounds, which were not healing as no one is taking care of them (frozen construction projects for several hotels). Therefore, Las Vegas needs a lot of friends in order to recover. Due to the financial crisis not so many people were traveling to Vegas and that is the reason Vegas is not feeling too well. Symptoms are frozen construction projects; low hotel-occupancy (down to 72% in July), unemployment and real estate prices drop. Therefore, new hotels like the Donald Trump one, Caesar Palace and Hilton are frozen. Only big construction sites like the City Center are still being built with 9,500 workers. This is a gigantic construction side of 8.4 billion and with 6,000 rooms. The low hotel occupancy of the hotels has a nice side effect. There are best deals everywhere in order to get people into Las Vegas. Thus we stayed in the MGM for 50 Euro a night (MGM is the place where the boxing fights take place). The occupancy rate of hotels is now up to 82% but still too low to overcome the crisis. The unemployment rate increased to 12.3%, in comparison in 2006 it was 3.8%. The biggest issue in Las Vegas is the prices for real estate. In the States people tend to buy a house while in Europe you rent or build your own. The same is true for Las Vegas. The city was one of the fastest growing and very optimistic cities in the USA (it was compared to New York in 1900). Several 100.000 people (roughly 60% of all people owning a house) have now higher debts than their house is worth (as the worth of the houses has decreased 50%). However Las Vegas has found a solution for this crisis (even if it is not the most ethnical one). People buy a new house often even bigger than the old one for less money. They take on a new mortgage stop paying the old one. The bank gets so fed up going through the whole process so that the stop asking for old mortgage. Unbelievable, however it seems to work.

Well, we hope our old friend will recover soon so we can find it next time sound again. Before we leave for Germany we will pay him another visit to see how he is doing and give him a financial support.