President Barack Obama was not discouraging travel when he said last month that businesses receiving federal bailout money should not be taking junkets.
“The president believes it’s important to have a strong tourism industry and that it’s important that, as the president said earlier … that we shouldn’t retrench,” White House press secretary Robert Gibbs said on Thursday (March 12). “He would encourage people to travel.”
But Obama proved that words can in fact hurt.
A seemingly off-the-cuff comment from the president a few weeks ago delivered repeated gut punches to Las Vegas’ already slowing tourism business, which has lost $131.6 million over the past 90 days, according to data from the Las Vegas Convention and Visitors Authority, according to the New York Post.
While speaking Feb. 9 in Elkhart, Ind., hub of the nation’s RV industry that has been hard-hit by the recession, Obama mentioned Sin City by name when he blasted recipients of federal-rescue cash for excessive spending on perks like corporate jets and junkets for executives and clients.
“You can’t get corporate jets, you can’t go take a trip to Las Vegas or go down to the Super Bowl on the taxpayer’s dime,” Obama said.
While the politically charged comment drew cheers from critics of such spending, it seems to have added insult to the injury Vegas has been suffering as a result of the recession-fueled slowdown in consumer and corporate spending.
Indeed, against the backdrop of a souring economy, companies and associations of all sizes appear to have taken Obama’s comments to heart, canceling conventions and conferences that were to be held in Las Vegas.
According to the Visitors Authority, some 340 events have been called off over the past three months, costing local resorts nearly 112,000 guests and 236,700 room stays.
Among them, Citigroup, Wells Fargo and Goldman Sachs, all of which have gotten funds from the government’s Troubled Asset Relief Program (TARP), as well as insurance giant State Farm, which pulled the plug on a big convention in October that was expected to attract 17,000 people.
It’s bad news for a city that has already found itself reeling thanks to a spike in home foreclosures and a sharp decline in visits.
But on Thursday, U.S. Rep. Shelley Berkley, D-Nev., called the president’s latest remarks “a boost to our tourism and convention industry.”
Las Vegas Mayor Oscar Goodman, who once demanded an apology from the president, said no apology was necessary, according to the San Francisco Chronicle.
“We got the message across that the president was not trying to disparage Las Vegas,” Goodman told The Associated Press.
Also Thursday, Senate Majority Leader Harry Reid, D-Nev., asked Treasury Secretary Tim Geithner to create guidelines on luxury spending for companies receiving bailout money through TARP.
Reid said the guidelines would provide clarity for those businesses accepting the money and those who don’t.
“It could also assure the broader business community that conventions and meetings are a routine and accepted part of running a successful enterprise in the country,” Reid wrote.