Las Vegas, NV – What happens in Vegas no longer stays in Vegas … particularly in the trade show and convention industries.
The recession and a media-generated public outcry against meetings wreaked havoc on the city’s convention and trade show numbers over the past year. As of August, convention attendance was down by 30% and the number of groups holding events dropped by nearly 20% compared to 2008. The drop-off was exacerbated by an outcry against American International Group’s incentive program in California last Fall and President Obama’s later comments about corporate groups “running off to Las Vegas.” Wynn/Encore alone lost more than $80 million in convention business as a direct result of the outcry, according to Danielle Babilino, senior vice president of hotel sales.
The dramatic downturn in corporate business and convention attendance prompted city promoters to take a new look at their approach in order to beef up the business that contributes roughly $8 billion annually to the Las Vegas economy. Today, the playful, suggestive ads are gone, replaced by “Las Vegas Means Business.” “Las Vegas Meetings” is stamped on everything from pens and notepads to cocktail napkins.
The Las Vegas Convention & Visitors Authority (LVCVA) is more attentive than ever to the needs of its biggest shows, such as the International Consumer Electronics Show, which typically kicks off the calendar year. But it’s also actively courting smaller corporate meetings and association business that may have fallen through the cracks during boom times. “We’re pursuing existing leads for 2010 opportunities first,” said Amy Riley, Director of Convention Center Sales for the LVCVA.
For Las Vegas promoters, the new adage is “wait until next year.” And despite the turmoil, there are signs of better times to come. CityCenter’s Vdara, Aria and Mandarin Oriental hotels will open in early December, along with Crystals, a 500,000 square-foot retail and dining complex. Stephanie Windham, director of sales at Aria, said Crystals is 75% leased. Vdara and Aria, which connect to Bellagio by tram, add more than 300,000 square feet of convention and meeting space to the city, but they also create more intense competition for the conventioneer dollar in a lagging market where hotel occupancy languished at 71% through August.
CityCenter’s convention facilities reflect the new focus on serious business that just happens to take place in Las Vegas. The only gaming at CityCenter’s new hotels is at the 4,004-room Aria. There will be 14 million square feet of total space at CityCenter, but only 100,000 square feet of gaming, according to Tara Russell, vice president of sales and marketing for the boutique condo-hotel Vdara. “That tells you something about the direction Las Vegas is heading,” she said.
The convention space at Aria is accessed through the hotel and includes three restaurants on the convention level. Sales staff members point to the proximity of room elevators to the meeting space, which includes four ballrooms of 20,000 to 52,000 square feet. Other features include full-size stages with production facilities, full catwalks above the rooms and plug-and-play pockets in the floor. There are two truck-sized elevators plus two drive-in ramps for the convention area.
The Asian-influenced Vdara is geared more to smaller groups or executive and board meetings held in conjunction with bigger shows. Most of its suites connect to standard rooms, making it conducive to private meetings or small receptions.
While CityCenter is nearing its grand opening, other construction has almost come to a standstill by Las Vegas standards. One casualty is the Convention Center expansion that was set to add 600,000 square feet of space by 2010. Last Summer, that project was put on hold. It will be reviewed next March to determine fiscal feasibility and current need. If trade show attendance doesn’t bounce back in 2010, the expansion could be delayed longer. But renovations – including new food outlets, restrooms and police and fire substations – are proceeding on schedule. “Anything that was in progress already is still moving forward,” said Riley.
A bigger concern for exhibitors who stage private events outside the convention hall and for groups that need hotel meeting space is the number of hotel projects that have been delayed or put on indefinite hold. As recently as September, there were 234 troubled assets in Las Vegas, according to Campbell, CA-based Real Capital Analytics, and 35 projects on hold. Some were meant to draw conventioneers. Postponements caused some groups to relocate for 2010.
The bankrupt Fountainbleau still has no viable takers and stands as a half-completed testament to the financial morass facing many commercial projects nationwide. Archon Corp.’s ambitious goals for land adjacent to the Sahara are stalled by a stock sale dispute and Planet Hollywood is still teetering on the financial edge. Prominent projects like Boyd Gaming’s Echelon are on hold indefinitely. Caesars Palace still has an empty tower of guest rooms and no one knows when hotel rates will bounce back to 2008 levels. The half-finished Cosmopolitan stands at the edge of CityCenter as a reminder of recession-generated delays, though it could open by the end of 2010.
On the positive side, Steve Wynn’s new Encore & Tower Suites adds a luxury element close to the convention center. Caesars Palace opened its 110,000 square feet of meeting space in the Octavius tower. Hard Rock Hotel & Casino has added a showroom that can be used for stage production and exhibits, along with pool villas well-suited to private events and 75,000 square feet of new meeting space. Anheuser-Busch and American Retail Services were in-house in October.
Wynn/Encore’s Babilino said October was the “best convention month yet,” with 120 groups using portions of the 180,000 square feet available at the two properties, including the American Institute of Certified Public Accountants.
Trade show organizers may benefit from deals on additional space until the city begins to fill up again. But there’s still a question of whether Las Vegas can absorb nearly 6,000 new hotel rooms and more than 600,000 square feet of function space while the economy remains in a funk. “There are a lot of group prospects not signed yet,” Aria’s Windham said.
Convention Center Contractors Offer Budget-Saving Options
Shows headed to the Las Vegas Convention Center will find added incentives for early orders with the catering and technology departments. With an eye to shrunken budgets, both Aramark and Smart City have tweaked their services to help organizers save some bucks. Enticements include:
- Menu packages that replace customized menus;
- Smaller portions at a lesser cost for banquets;
- An option to piggyback on the same menu as other groups in-house;
- An incentive for those who order early: price breaks at 30 days and 14 days out;
- Specials for exhibitors that add a free snack when exhibitors order breakfast and lunch ahead of time;
- A program called Food2U for those with reduced booth staff, move-in crews or a heavy concentration of small booths. Orders are placed in advance and delivered directly to the booth by “booth hops.”
Smart City Deals:
- Order early to get price breaks;
- Use Smart City’s Top 10 Tech-saving Tips to reduce costs;
- Work with Smart City representatives to examine show history and make money-saving changes;
- Attendees get 30 minutes of free wireless service daily at the Convention Center or Las Vegas Hilton.
Sidebar: Just the Facts
- Caesars Palace debuted 110,000 square feet of meeting space at its new Octavius Tower, but the 660 guest rooms remain unfinished.
- Aria’s meeting space includes 38 breakout rooms on three levels and four ballrooms ranging form 20,000 to 52,000 square feet. Level 3 can be self-contained; groups booking 1,500 guest rooms can be guaranteed all meeting space to themselves.
- Vdara has 1,400 suites, a 4,000 square-foot ballroom and 3,800 square feet of pre-function space.
- All meeting rooms at Encore have outdoor patios. It has 60,000 square feet of function space and a 60,000 square-foot spa.
- Hard Rock Hotel & Casino’s new Paradise Tower, set to open in March, will feature all suites and include pool villas overlooking a six-acre pool. The tower will have 374 suites with a separate entry and seven penthouses with private pools.
Reach Stephanie Windham at (702) 590-7171 or firstname.lastname@example.org; Danielle Babilino at (702) 770-4702 or Danielle.email@example.com; Amy Riley at (702) 892-2826 or firstname.lastname@example.org; Tara Russell (702) 590-2333 or email@example.com