In fact, it's part of the reason that you're seeing so many hotel room deals in LAS. For years, airlines were willing to offer deeply discounted fares to LAS from the midwest and east coasts, in large part because they were able to at least break even or a bit better if they sold enough F or Y seats on a particular flight.
Here are articles (
1 and
2) from this month and going back to 2008 (read: before gas prices were out of sight) discussing capacity cuts at LAS for varying reasons. LAS is so hugely dependent on air travel that, in concert with the double-whammy of the recession and the growth of gaming options across the US, LAS gaming revenue has taken a huge hit.
In the US economy, LAS and MCO are the canaries in the coal mine because they're inordinately dependent on tourism and entertainment (read: discretionary spending). Both are getting killed - Disney just went through a round of layoffs in MCO with more to come, apparently.
While I understand there's only one Las Vegas there are more regional gambling options than ever before. If all you want to do is get out for a couple days and gamble a bit, stay at a decent hotel and have a few
reasonably priced meals, why pay to fly to LAS, even for cut-rate rooms, when so many other things there are still expensive, compared to regional gaming facilities?
The northeast (PA legalized casinos recently and new facilities have already opened near Allentown and PHL, with another on the way or opening in PIT), midwest and south (MO, IN, KS, IL, MI, IA, MS and LA, at least), all have commercial gaming.
Indian gaming has grown from $9 billion annually in 1998 to almost $27 billion in 2008, although a lot of that growth has come in CA and FL (according to National Indian Gaming Commission statistics, less than 20% of tribes earn over 80% of Indian gaming revenues). Indian gaming facilities have matured to the point where many have three or four star hotels, good entertainment options and well-run casinos in MI, WI, IA, KS, AL, FL, NY, AZ, NM, CA, WA, OR, MS and LA, at least.
Hopefully, LAS will rebound, but it could be a long time.