Comdex touts lower room rates, easier navigation

Gary Thompson

Monday, Aug. 2, 1999 | 11:19 a.m.

Organizers of the Nov. 14-19 Comdex trade show are banking on increased room inventories, larger convention centers and lower room rates in Las Vegas to draw more attendees to the huge convention.

By this fall 10,567 more rooms will have opened here since last November's show, which drew 220,000 delegates to view the latest in information technology from 2,400 exhibitors.

Before the latest wave of new resort openings began, fears of hotel-room oversupply swept through the Strip, prompting many analysts to warn of possible price wars as properties struggled to fill their rooms.

But seasonally adjusted occupancy levels and room prices on the Strip have climbed consistently since the opening of Bellagio last October. The gains have been propelled by higher numbers of convention attendees and tourists in the first half of the year.

And when Comdex -- the world's largest convention -- comes to town, those seasonal adjustments traditionally send room rates soaring even higher as visitors vie with conventioneers for scarce rooms.

In prior years, in fact, some Comdex attendees have been forced to commute daily to the trade show displays at the Las Vegas Convention Center and Sands Expo Center from hotel rooms as far away as Primm, Mesquite and even Los Angeles.

As a result, Comdex producer ZD Events -- a subsidiary of Ziff-Davis Inc. -- reserves huge blocks of rooms months in advance to ensure its attendees have someplace to stay.

Last year, though, an unusual set of circumstances combined to force ZD Events to turn back some of the rooms it had reserved, even though prices were about 15 percent lower than in 1997.

And it appears similar dynamics are at work this year, with the added fillip of 10,000 more hotel rooms making it theoretically even more attractive to attend Comdex.

"Market forces have helped stabilize hotel rates in the city, which now enables Comdex attendees to get the most competitive prices ever on lodging," ZD Events said in a news release last week.

"Attendees will find savings of up to 30 percent on room rates this year," ZD Events said.

They will, that is, if they book through ZD Events. Resorts are quoting room rates during the show's run dates that are sharply higher for free-and-independent travelers (FITs) than those offered through the show producer.

At Mandalay Bay, for example, ZD Events is offering rooms at $244 a night, while FITs pay $326 a night from Nov. 14 to Nov. 18.

A standard room at New York-New York booked through ZD Events costs $219; the FIT rate is $380 for the first two nights, $169 for the next two.

The Hard Rock's rates are $244 for nights booked by ZD Events, $325 for FITs.

The price differentials are hotel operators' response to a trend that surfaced at last year's event. Some exhibitors complained privately that the show had gotten too big and that their displays were lost in the mazes on the convention floors.

They also complained about the cost of exhibiting. The Las Vegas Convention Center charges ZD Events 20 cents a square foot for floor space, the Sands Expo Center about 35 cents a square foot. ZD Events charges exhibitors $50 a square foot.

Thus, the show producer could theoretically lease 1.9 million square feet at the Convention Center alone for $380,000 and, if it sublets the entire amount to exhibitors, generate $95 million in revenue.

ZD Events also charges anywhere from $1,095 to nearly $2,000 for Comdex credentials, boosting the potential cost to exhibitors by another $200 million plus.

As a result, several big exhibitors such as IBM and Intel opted not to display on the Comdex floors last year. Instead, they booked convention space at hotels and hospitality centers, hoping to draw potential customers by the strength of their brand names.

As for convention space, ZD Events is also promising an improved Comdex '99 thanks to expansions of the Las Vegas Convention Center, the Sands Expo Center and the opening of the Venetian resort adjacent to the Sands.

ZD said Comdex attendees will find it easier to navigate the convention because of the convention center's addition of 279,000 square feet of exhibit space and more than 42,000 feet of meeting room space. These additions have eliminated the need for pavilions or tents outside the convention center, ZD said.

And upper-level expansion of the Sands, as well as contiguous space adjacent at the Venetian, has enabled Comdex managers to move Sands lower-level exhibits into new space upstairs, creating one continuous exhibit floor.

Another factor influencing hotel prices began last year when some attendees found they could book rooms cheaper as FITs than through Comdex. Hotel-casino operators quickly discovered the ploy, and decided to raise FIT rates this year to stop the trend from growing.

Traditionally, resort operators raise room rates and demand a guaranteed minimum number of room nights to make up for the drop in casino revenue that normally occurs during Comdex.

Companies that set up independently of the show negotiate their own deals with hotels for meeting space as well as rooms, often at rates below FIT rack rates.

If rising visitation spurred by Bellagio and this year's openings of Mandalay Bay, the Venetian, the Resort at Summerlin and Paris-Las Vegas continues, the FIT rates will probably stay firm.

But if business slows in the fall as some potential visitors put off their trips until the millennium celebrations, those FIT rates could come down. And late-booking Comdex attendees may find even more bargains as November draws closer.