LV Convention Center rates are still low after increase

Wednesday, Nov. 14, 2001 | 10:48 a.m.

The Las Vegas Convention and Visitors Authority is raising the rental rate for space at the Convention Center and Cashman Center by 25 percent.

The LVCVA board of directors voted unanimously to boost the rate from 20 cents a square foot per day to 25 cents beginning Jan. 1. The LVCVA staff had recommended implementing the increase over three years and reaching the 25-cent level in the 2005 fiscal year.

But board members reasoned that an increase to 25 cents would still keep Las Vegas' trade show floor rates near the national average and competitive with some of its biggest rivals.

The accelerated implementation of the new rates would raise an additional $300,000 to $400,000 over three years, LVCVA officials said.

Las Vegas Mayor Oscar Goodman, a board member, said it made sense to implement the entire increase right away and not phase it in as long as the new rate doesn't discourage customers from booking in Las Vegas.

While LVCVA administrators say they don't think the higher rates will discourage conventions from signing on with Las Vegas, Tom Smith, vice president of facilities for the LVCVA, said he expects some trade shows will sign long-term contracts by the end of the year to lock in the lower current rate.

Most conventions and trade shows arrange dates and venues several years in advance.

Smith also expressed some concern that rival convention centers are considering lowering rates in a bid to jump-start business because of the downturn in the industry caused by the Sept. 11 terrorist attacks.

The LVCVA last raised rates in 1998 when they were increased from 15 cents to 20 cents.

A rate of 25 cents a square foot will rank Las Vegas 11th among 21 convention center base rates surveyed by the LVCVA when it first considered the increase. The highest base rate is charged by New York City's Jacob K. Javits Center, 41.25 cents square foot, while Fort Lauderdale, Fla., charged the least, 14.5 cents.

But the survey also noted that some convention centers have other charges that increase the total cost of a show, such as move-in and move-out fees.

In the LVCVA survey, a four-day 150,000-square-foot exhibition with four move-in days and two move-out days was priced at 21 venues. Based on the 25-cent rate, the Las Vegas Convention Center ranked 12th among the 21 surveyed. Under the 20-cent rate, Las Vegas would rank 14th.

The Sands Expo Center, the survey said, charged the highest rate, with 35 cents a day for the exhibit space, plus 18 cents per square foot over six days for move-in and move-out charges. That would result in a total rent of $372,000, about twice the national average of $191,832.

The same show at the convention center under the 25-cent rate would cost $187,500.

Officials at the Sands Expo Center, operated by the company that owns the Venetian hotel-casino, could not be reached for comment Tuesday.

Venetian officials have been frequent critics of the LVCVA's low rate structure, saying it is unfair that private enterprise is forced to compete against a government-backed entity. The LVCVA has responded that of about 4,200 conventions and meetings scheduled in Las Vegas, just 90 use the convention center or Cashman Center, and that all resorts have access to the LVCVA's leads.

The LVCVA board, when it agreed to raise rates, also said it would take a fresh look at rates a year from now and may consider move-in fees and charging rent for the use of meeting rooms that are a part of the convention center.

LVCVA officials noted that companies that own the trade shows mark up the cost of square footage dramatically. The industry average, LVCVA President Manny Cortez said, is $18 a square foot. For Comdex, the massive computer show currently in Las Vegas, some exhibitors pay $64 a square foot, he said.

Those fees give exhibitors other services, including marketing and company exposure in meetings and seminars, for their money.