Las Vegas softness was detected before attack

Friday, Nov. 2, 2001 | 10:38 a.m.

Las Vegas' convention and meetings industry, reeling from six weeks of uncertainty after the Sept. 11 terrorist attacks, is preparing for what could be the biggest financial hit of the year with lower attendance forecast for Comdex.

The computer exhibition, the largest convention in North America, is expected to bring 150,000 people to the city beginning on the two-month anniversary of the terrorist attacks. Last year, Comdex produced a $254.6 million economic impact with 200,000 in attendance; this year, the Las Vegas Convention and Visitors Authority forecasts an impact of $202.7 million.

Still, the magnitude of the business slowdown caused by the attacks varies dramatically within the Las Vegas convention and tourism industry.

Las Vegas hotel-casinos laid off some 13,000 people after the attacks, and many have started recalling workers as business improves.

And officials with Las Vegas' convention support industry say the repercussions of the terrorist attacks haven't hit them as hard as many people expected.

Because businesses had been bracing for a slowdown in the economy earlier in the year, the Sept. 11 incident sped up many of the decisions to cut back. Though 261 meetings and conferences were canceled or postponed in Las Vegas after the attacks, most of them didn't affect convention support companies.

Representatives of GES Exposition Services and the Freeman Companies were already tightening budgets and planning for lean times before the attacks sent the tourism industry into a tailspin.

But since the attack, damage has been minimal.

"Like everyone, we saw the majority (of the downturn) in the first two weeks after 9-11," said Sallie Sargent, senior director of corporate communications for GES in Las Vegas. "We've seen some shrinkage, some exhibitors choosing not to attend, but things are nearly back to normal now."

But "normal" is a relative term. For several months leading into September, companies already were cutting travel budgets and scaling back exhibition and entertainment plans at conventions.

"The net effect was not that great on us," added Jim Ness, general manager for Freeman in Las Vegas. "We had some rightsizing and downsizing prior to Sept. 11, so some of the economic trends were there."

Sargent said GES and its parent company, Viad Corp., which has North American outlets setting up and tearing down 3,000 shows a year, had less than 1 percent of their events cancel.

Most of the 261 shows that canceled or postponed were small meetings conducted in hotel ballrooms and small venues.

Other companies that directly support the convention industry also said they were not hurt severely in the aftermath of the attacks.

Farrington Productions, which produces live entertainment in conjunction with the convention industry, had already begun cutting operations before Sept. 11. Blair Farrington, owner and chief executive officer of the company, said the attacks merely cemented the tightening-up attitude that most clients had.

"Things did change for clients," Farrington said. "Of course, there were some that canceled in that immediate week, but since then, they've been reassessing budgets and reassessing what they feel is appropriate. They're changing the way they look at entertainment and travel and all of those things."

"In some cases, I think clients are now even more confused about what they think they should be doing," Farrington said. "They're off balance."

Naomi Phillips, managing director of Las Vegas Conference Suites & Services, which has 20,000 square feet of meeting facilities away from the hotel-casino environment, said it's hard to tell just how badly her business has been hurt because she'll always think about what could have been.

"There's no barometer to gauge how many clients I would have contracted if it weren't for this tragedy," Phillips said. "I can't account for how much new business would have been generated."

She said she had one event cancel as a result of the terrorist attacks -- and that may just be postponed.

So when will things really be back to normal? Freeman's Ness points to Jan. 1.

"Right after Jan. 1, you'll have CES (International Consumer Electronics Show) kicking off, then the Super Show (sporting goods convention)," Ness said. "The (Las Vegas) Convention Center will be opening the new addition. Mandalay Bay is going to get back to their convention center construction, the Stardust (convention center) will be built and soon after that, who knows what Mr. Wynn is going to do?

"Right now, I'd say Jan. 1 is the magic date."