The global electronic dance music (EDM) craze is in full swing and Sin City has capitalized on it like no other. With new EDM-centric megaclubs and the world’s best weekly DJ lineup, Las Vegas has redefined itself as the world’s top destination for electronic music.
Hit hard by the Great Recession, Las Vegas has risen from the dead. Hotel bookings, gambling revenue, and hotel-casino stock prices are approaching pre-recession levels. Analysts have accredited a strengthening national economy with the turnaround, but this is a gross oversimplification and only tells half the story.
It may sound ridiculous, but EDM has been a major force behind the turnaround because it has redefined Sin City as a premier music destination. Its role in Vegas’ comeback and in its future cannot be underestimated.
What is EDM?
EDM is a fast-growing genre of music designed for nightclubs, parties, and music festivals. The genre is the birth child of post-disco electronic genres like synthpop, electro-funk, and other experimental new wave genres. It more or less samples several electronic styles from as early as the 1970’s, and adds thundering bass.
EDM is especially designed for nigthclubs, dance parties, and music festivals. There are many subgenres within EDM, including house, trance, dubstep, electro, and others. All of them, of course, are designed to get people dancing. EDM records have risen to the top of global music charts and is widely considered the fastest growing mainstream musical genre.
How Vegas Became the EDM Capitol of the World
Las Vegas has seized the EDM throne because its clubs are willing to shell out more cash for top DJs than anyone else. A top DJ can earn as much as $300,000 in a single night plus a comp’d room and flight, according to Spin.com. Consequently, top DJs like Tiesto, Hardwell, and Kaskade have played in Las Vegas more times than any other city on earth. Tiesto, for instance, has played Vegas 77 times, Ibiza 49 times, and Miami 34 times, according to Songkick. Forbes estimated that Tiesto earns $22 million per year, a considerable amount of which comes from Las Vegas.
On almost any given weekend in Vegas, EDM fans have at least 10 DJ-producers to choose from. Tickets for the top performers at the best nightclubs start at around $30 and can sell for as much as $120 on holiday weekends. DJ’s spin throughout the week, with the best talent concentrated on the weekends. It’s not uncommon for clubs to sell out, a clear sign of EDM’s impact on business in Vegas.
Las Vegas’ new EDM club scene is also the fastest growing in the world. The MGM Grand (MGM) spent $100 million on the construction of Hakkasan, an 80,000-square foot megaclub. Top DJs, some of whom have released gold and platinum-certified music, spin at Hakkasan almost nightly. Other top clubs include XS and Surrender at Wynn (WYNN) , Marquee at the Cosmpolitan, Light at Mandalay Bay, and the brand new 65,000 square foot Drai’s, which cost $65 million.
Vegas is also home to EDC, the most popular electronic music festival in the world. The event was hosted by Insomniac at Vegas Motor Speedway this June, drawing around 400,000 attendees, which comprises almost 1% of Las Vegas’ total tourism traffic for the entire year. At $250 for regular passes and $499 for VIP, EDC earned well over $100M in ticket revenue this year. The Las Vegas Sun also reported that EDC brought in $278 million in revenue to Clark County, representing the size of EDM’s financial impact on Las Vegas as a whole.
How EDM is Changing Sin City’s Identity
EDM’s growing popularity is transforming Vegas. Sin City is no longer just a destination for gamblers, partygoers, and vacationers. It is now the world’s premier destination for electronic music. EDM fans make entire trips to Vegas with the sole intention of seeing their favorite DJ at a world-acclaimed nightclub.
Of course, those who aren’t interested in the performer may still attend clubs like usual. Tables, bottle service, and outdoor lounge areas remain available for those looking to socialize, rather than jump and dance to their favorite electronic music. Thus, for those who are disinterested in the DJ, the club scene remains almost the same – just more crowded.
Las Vegas has strategically crowned itself the EDM capital of the world. As much as Wall Street analysts like to credit an improving economy for Vegas’ recovery, EDM deserves some credit as well. This new music culture in Las Vegas is an undeniable catalyst that cannot be dismissed.
Vegas’ Economic Turnaround
Hotels have taken note of the shifting culture in Las Vegas and are reaping the benefits. “The Las Vegas Cosmopolitan Hotel and Casino also illustrates a shifted focus from gambling to the broader, “New” Las Vegas experience. This property was a multi-billion dollar investment, aiming to put retail, restaurants, and nightclubs/bars at the front door,” writes Jeffrey Perea of consulting firm ConwayMacKenzie.
“People are simply spending more in other areas,” said Mike Lawton, senior analyst for the Nevada Gaming Control Board.
Vegas isn’t back to pre-recession prominence, but its new status as an all-around tourist destination is driving traffic to multi-year highs. In 2013, 40 million people visited Las Vegas, representing a five-year high, according to the Las Vegas Convention and Visitors Authority. Visitor traffic was the second highest total ever, just 59,000 visitors short of an all-time record. Meanwhile, the daily room rate increased almost 3% in 2013 and gambling revenue increased by about the same rate.
Consequently, the Vegas unemployment rate Vegas has fallen from 14.6% in 2011 to 7.9% in 2014, according to the Bureau of Labor Statistics.
With Las Vegas’ miraculous turnaround well under way, Vegas bulls have been rewarded with colossal returns over the past 12 months. Las Vegas Sands (LVS) is up 36%, Wynn Resorts is up 56%, and MGM Resorts is up a massive 68%–all outperforming the S&P 500’s 18% return.
Vegas certainly isn’t immune to another downturn. The difference between now and 2008, however, is that EDM will continue to attract people to Las Vegas even if the economy sputters.The city has an entirely new tourism industry, and EDM is playing a huge role in Sin City’s modern identity.
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