LVCVA steps up convention marketing

By Richard N. Velotta

Friday, May 29, 2009 | 3 a.m.

Whether you blame the ragged shape of the economy or President Barack Obama’s unfortunate choice of words when he used Las Vegas as an example of how not to spend government bailout money, it’s painfully clear to the local tourism industry that shoring up convention attendance has to be a priority.

The Las Vegas Convention and Visitors Authority is taking extraordinary measures to boost attendance at conventions and meetings that in good years have brought more than 6 million people to the city.

The authority is coordinating convention visitation strategies, spending more for business travel advertising and adding value to organizers by calling potential conventiongoers with a sales pitch on why they should come to the event.

Convention traffic is important to the city because it brings most of its people to town for midweek stays, and conventiongoers on corporate accounts generally outspend weekday tourists.

The authority said in its 2008 Las Vegas visitor profile that 12 percent of people visiting the city come for a convention, trade show or meeting. In 2006, the year of the city’s largest convention attendance, 6.3 million people came for shows, spending an estimated $8.2 billion in nongaming revenue. In 2007 when 6.2 million conventiongoers came to town, it was estimated that $8.4 billion was spent.

The authority estimates that 35 percent of those at a convention, trade show or meeting bring a spouse or family member to share the Las Vegas experience.

But 2008 was a different story as the recession affected corporate travel budgets. Although most of 2008 went well, the bottom fell out in the fourth quarter. For the entire year 5.9 million conventiongoers visited Las Vegas.

The first quarter of 2009 has been even worse with convention attendance off 29 percent compared with the same period in 2008. Attendance is estimated at 2.2 million.

Chris Meyer, LVCVA vice president of convention sales, said the decline has been the product of fewer conventions and fewer people at conventions.

In the first quarter of 2009 Las Vegas played host to 4,904 conventions, trade shows and meetings, down 18.3 percent from the previous year. Meetings and shows range from 10-person corporate board meetings up to the giant Consumer Electronics Show and the National Association of Broadcasters that draw more than 100,000 people each.

The authority has said since the beginning of 2008’s fourth quarter, 400 meetings and shows that were planned have been canceled. Meyer said many of those events were in the financial services and insurance industries where corporate images were at stake.

And that’s where Obama’s comments come in. On Feb. 9, in a town-hall meeting in Elkhart, Ind., the president said, “You can’t take a trip to Las Vegas or down to the Super Bowl on the taxpayers’ dime” in reference to spending government bailout money.

Some corporations took the remark as a signal to bail out on Las Vegas and some did, most notably Wells Fargo Bank and Goldman Sachs, which canceled events at Wynn Las Vegas and Mandalay Bay, respectively, and moved them to San Francisco, a more expensive destination by average airfare and hotel room rates.

Several Las Vegans took umbrage at Obama’s remark, most notably Las Vegas Mayor Oscar Goodman, who heads the authority’s board of directors. Several people were expecting Obama to refer to and clarify remarks during his Las Vegas visit this week, which hadn’t concluded by In Business Las Vegas’ press time.

In hindsight, Meyer believes the decline in convention visits to Las Vegas is more about the economy than Obama’s remarks, since corporations have stripped travel budgets and expense accounts and reduced numbers in delegations that attend shows.

Although some meetings have moved closer to their corporate homes, others have opted to upgrade technology and conduct meetings by phone or via the Internet. Others have delayed events until the economy turns around and some have simply canceled their functions. Meyer said in addition to the financial services and insurance industries, shows involving the construction and automotive industries have been hard hit.

But Meyer noted that industries that are faring better in the down economy, such as energy-related shows and the pharmaceutical industry, are holding their own.

Even the shows that are hanging on are spending less and that trickles down to the Las Vegas economy.

In remarks given in connection with the first-quarter earnings of Viad Corp. subsidiary GES Exposition Services, a major conventions contractor in Las Vegas, Kevin Rabbitt, executive vice president and chief operating officer, said square footage for exhibits has declined at nearly every event and most exhibitors have downsized their presentations, resulting in less materials sales and shipping revenue.

Two recent big shows had fewer people. The Consumer Electronics Show in January had 110,000 — a 22 percent decline from 2008 — and the National Association of Broadcasters had attendance of 105,250, a 5.2 percent decrease.

Even small and medium-sized shows are looking at downturns with attendance for the Great West Truck Show in June expected to be 16,000, down from the 19,000 anticipated earlier and September’s Interbike Expo forecast at 18,000, down from 22,000. Even the formidable Associated Surplus Dealers and Associated Merchandise Dealers shows that have drawn about 64,000 people in the past have downgraded the August show to 40,000 after 48,000 was predicted earlier.

Meyer said although no major convention has canceled in Las Vegas, there are fewer leads to pursue for new shows or events that rotate from city to city. He said the volume for leads on shows that will occur 12 to 18 months away is off 18 percent from the previous year.

So what can Las Vegas do to right the ship?

Meyer said the LVCVA is taking a multiprong approach starting with developing a unified message with national tourism organizations to reverse the perception that meetings, conferences and trade shows are a waste of time and money.

The Washington-based U.S. Travel Association has taken the lead on sending the message that travel not only is essential, but that a healthy travel industry can help turn around the U.S. economy since the industry employs 7.7 million Americans and generates more than $740 billion annually.

Authority President and CEO Rossi Ralenkotter said there has been an unprecedented level of cooperation within the Las Vegas resort community to promote the destination as a whole. The authority has modified its approach to advertising Las Vegas, including publicizing more property-specific events to generate enthusiasm citywide.

Meyer said the authority has taken the message of the importance of meetings directly to corporate officers with ads in The Wall Street Journal and other business publications.

In addition, his sales force of 35 hit the road for 1,000 face-to-face meetings with corporate meeting planners in 356 cities from Oct. 31 to Jan. 31. Another round of meetings is planned with 500 cities on the itinerary.

The sales pitch not only stresses the importance of meetings, but also why Las Vegas is the best place to have one such as accommodations at several prices, unmatched meeting facilities and convention centers, outstanding entertainment and dining opportunities and the proximity of the airport.

Representatives point out that Las Vegas conventions generally draw more people than shows in other cities and that an event’s success can be enhanced by making Southern Nevada its home.

So far, the strategy has paid off. Five shows that have never been to Las Vegas are on the city’s 2010 calendar with total attendance estimated at more than 50,000. The authority has signed up the International Association of Operative Millers, April 21-22 (800 attendance); the Automotive Oil Change Association, April 26-28 (2,500); Kiwanis International, June 23-27 (13,000); Wedding MBA, Sept. 21-22, (500); and the International Baking Industry Expo, Sept. 28-29 (35,000).

The authority also is offering an attendance enhancement service to shows that have committed to a Las Vegas convention date.

The LVCVA board recently approved a $375,000 contract with Toronto-based Infolink Technologies for a call center to place more than a half-million phone calls to potential trade showgoers for 23 Las Vegas events.

Meyer said Infolink will be delivered a script promoting the trade show or meeting, emphasizing Las Vegas hosting the event. Show organizers love the service because the expense is borne by the authority and Infolink not only promotes the show and the city but updates show organizers’ databases of potential conventiongoers.

The service is available to shows anticipating attendance of more than 1,000 throughout North America.