LVCVA approves 2006 marketing budget

Friday, May 20, 2005 | 10:58 a.m.

The Las Vegas Convention and Visitors Authority board of directors on Thursday approved a bigger marketing budget for fiscal year 2006 to take advantage of higher hotel room taxes and room rates.

The operator of the Las Vegas Convention Center anticipates spending about $188 million, a 3 percent increase from last year in fiscal year 2006. That's from a total budget of $227.3 million, a 6 percent increase in revenue from the previous year.

Hotel and motel room taxes across the county -- which fund about 81 percent of the LVCVA's budget -- are expected to generate $351 million in fiscal year 2006 from rising room rates and the addition of new hotel rooms such as last month's opening of Wynn Las Vegas, the August debut of a new hotel tower at Caesars Palace and the early 2006 openings of Red Rock Station and South Coast casino hotels on either end of the valley.

The LVCVA's 46 percent cut of total room taxes countywide is expected to be about $183 million, a 7 percent increase from the previous year. Of that, $23 million will be returned to the cities in Clark County and the county in the form of grants for things such as parks and recreational services.

The remaining 54 percent is split between various entities, with the county transportation department receiving $39 million, the state of Nevada receiving $14.6 million to promote tourism and the Clark County School District receiving $63.4 million for construction projects. That money would be enough to build about three elementary schools and one middle school, LVCVA Senior Director of Finance Brenda Siddall said at the board meeting.

The LVCVA expects to spend $80.1 million to advertise Las Vegas in its 2006 fiscal year, an increase of 2 percent from the $78.6 million it will spend through June 30, 2006.

Advertising is the biggest chunk of the LVCVA's annual spending, accounting for 44 percent of the fiscal 2006 budget.

The LVCVA board allocated a total of $114.3 million to marketing, a 3 percent increase from the previous year. That includes advertising as well as Internet marketing, research, public relations and visitor information centers.

Nobody showed up at the public meeting to complain or ask questions of board members about the budget.

The continued popularity of Las Vegas has boosted room taxes, LVCVA officials said.

Southern Nevada's inventory of roughly 148,000 rooms is expected to grow by 19,500 rooms in five years. The region's occupancy rate in fiscal year 2006 is expected to be 88.8 percent, nearly flat with this year. The LVCVA is projecting average daily room rates across Clark County to come in at $75.60, up from $73.50 this year.

The increases are conservative so as not to spend more money than is generated, Siddall said.

Personnel costs account for 22 percent of the 2006 budget. The LVCVA has budgeted for 10 more employees in the coming year for a total of 513 people. About seven of those workers will be employed as security officers.

LVCVA President and Chief Executive Rossi Ralenkotter will be paid an annual base salary of $225,000 through June 30. He will be eligible for a raise and a performance-based bonus, at the board's discretion, in fiscal year 2006.

In its budget, the LVCVA pledged to do more to grow the Las Vegas brand worldwide through various means including the "What happens here, stays here" ad campaign. That will involve expanding its current seven advertising markets to more than a dozen and developing international markets such as Canada, Mexico, the United Kingdom and Japan.