Venetian praises LVCVA decision, studies affects

Tuesday, Nov. 20, 2001 | 9:19 a.m.

One of the Las Vegas Convention and Visitors Authority's biggest critics called the LVCVA board of directors' move to increase rental rates "a positive step."

"It was a very positive decision that they made," said Andy Abboud, director of government relations for the Venetian hotel-casino.

Abboud said his company -- operator of the Sands Expo Center adjacent to the Venetian -- is still evaluating how the decision would affect it and the Las Vegas market.

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 board is comprised of elected officials and casino executives.

Venetian officials pressed the fairness issue in 1999 when they opposed the construction of the $150 million south hall expansion that will open for business in just over a month.

Meanwhile, a third competitor in the Las Vegas convention and trade show industry remains on track to enter the market in January 2003.

Construction will continue early next year at the convention center at the Mandalay Bay hotel-casino. The three-story, 1.8 million-square-foot center had construction delayed in October following the Sept. 11 terrorist attacks.

Danielle Babilino, vice president of sales for Mandalay Bay, said that while construction is on hold, there have been some cosmetic additions to the building to make it more aesthetically appealing to guests.

Babilino said the company is targeting a 2003 start-up because forecasters predict improvement in the conventions and meetings industry next year and January, February and March are traditionally strong months in the meeting industry.

"Our crystal ball isn't any clearer than anybody else's, but everything we read suggests things will be turning around by the middle of next year," Babilino said.

Michael Hughes, director of research services for Tradeshow Week, a trade publication covering the convention and meetings industry, said three major convention centers would likely be the most the Las Vegas market could bear for now and he praised Mandalay Bay's decision to delay its project.

"It made a lot of sense for them to pull back and let the market recover," Hughes said.

When construction projects nationwide are completed in 2003, Las Vegas will have three of the top seven convention centers in the country by available exhibit space. Las Vegas is a dominant player in the convention industry, hosting 33 of the top 200 trade shows in the country and having a 22.4 percent market share of square footage of the top 200 shows, according to Tradeshow Week.

Those numbers are what drive casino companies to build convention centers and support the LVCVA's efforts, with executives reasoning that conventions will fortify midweek visits and complement the city's status as a top leisure destination on weekends.

Hughes said while the convention industry has been weakened, it's the corporate meetings sector -- the small gatherings that can be accommodated by most of the city's major hotels -- that have been hurt in the last six months.

"The real weakness in the industry has been felt in corporate meetings," he said. "And it's not so much the fear of flying as it is the recession" that has plagued the industry for most of 2001.

He said business travel budgets have been cut across corporate America and until the economy rebounds, those budgets will stay at lower levels.