Officials think split of car industry shows will be net gain

By Richard N. Velotta

Friday, Aug. 20, 2010 | 3 a.m.

For years, the automotive industry has been in the spotlight in Las Vegas at the end of October or in early November when the Specialty Equipment Market Association and the Automotive Aftermarket Product Expo come to town for a convention with more than 100,000 people.

Aftermarket products, goodies and gadgets that enhance the value of cars and trucks, or are just fun to have around, are displayed at the convention. Because many of the products are shown on vehicles, there are cool cars all over the trade show floors.

This year SEMA and AAPEX — which aren’t open to the public — will gather Nov. 2 to 5 at the Las Vegas Convention Center and the Sands Expo & Convention Center, respectively.

They have been a part of Las Vegas since 1977. As the convention has grown, other car-related organizations have met about the same time so members of one association could meet with representatives of another.

In recent years, NACE — an outdated acronym for the International Autobody Congress & Exhibition (it used to be “National”) — reached agreement with SEMA and AAPEX to co-locate their shows in Las Vegas. SEMA made its home at the Convention Center, AAPEX was at the Sands and NACE at the Mandalay Bay Convention Center.

Eventually, the Congress of Automotive Repair and Service hooked up with NACE at Mandalay Bay and some auto-glass industry associations also met at the same time. Some let delegates from other shows enter their show floors without purchasing a separate admission badge.

It became an automotive frenzy, and anybody with a business interest in aftermarket products or auto-body repairs came to Las Vegas as the leaves turned colors.

But over time, show strategies change.

This year, NACE and CARS will meet three weeks before SEMA and AAPEX at Mandalay Bay as part of the branded Automotive Service and Repair Week in Las Vegas. Auto Glass Week and the Automotive Service Councils of California will also meet then. An estimated 12,000 people are expected.

Ellen Pipkin, show manager for NACE and CARS, said the organizations were seeing attendance siphoned off toward the end of their show as a result of some of the activities at SEMA and AAPEX. Up until 2004, NACE was a stand-alone event and co-located with SEMA over the last six years.

“So we decided we wanted to give our attendees and visitors a business-to-business-focused format without the distractions of other things going on in the city,” Pipkin said. “Our attendee base is in collision repair. But some of the things going on at SEMA were a lot more glamorous. If you’re into cars, who wouldn’t be interested?”

Pipkin said she doesn’t expect her show to suffer since there’s little crossover between NACE and SEMA. And, with less competition for hotel rooms, Pipkin said her group has gotten some great rates.

How will the decision to split the shows affect Las Vegas? Will industry professionals come to Las Vegas in mid-October, then come back a few weeks later? Or will they choose one show over another? Will demand be weakened, driving room rates down?

Chris Meyer, Las Vegas Convention and Visitors Authority vice president of sales, and Peter MacGillivray, SEMA vice president of events and communication, agree that splitting the shows should be a good thing for Las Vegas tourism.

“Like all industries, the automotive landscape changes over time,” MacGillivray said. “Trade shows change too, and that includes dates.”

MacGillivray said from his perspective, SEMA 2010 looks like it’s going to be a big hit. He’s forecasting a 10 percent increase in attendance over last year, which means it could reach 110,000.

Ten percent more exhibitors are planned, and MacGillivray said preshow sales for exhibit space are up 18 percent. Although he knows some may cancel before November, SEMA is looking at sales of 850,000 square feet of exhibits compared with 750,000 square feet last year.

MacGillivray applauded Las Vegas’ diversity of hotel product catering to all income levels and said he thinks attendance will be strong because hotel executives know they can boost occupancy and business by being more affordable.

“Over the decades, we’ve developed some great partners that are offering some fantastic room rates,” he said.

Meyer, a champion for co-located shows, said splits like this one happen all the time as organizations adjust goals.

“We see it a lot in the food industry, but the way we look at it is that we’re getting another show as a result. It’s absolutely good for us,” Meyer said.

Meyer said a large portion of NACE attendees come from Western states, so he doesn’t expect the split to have hurt that show.

Praise, but no pay

By all accounts, Rossi Ralenkotter does a fabulous job as president and CEO of the convention authority.

But for the third straight year, he’ll get a pat on the back but no cash for helping steer the tourism industry through a recession.

A five-member compensation committee will recommend no pay increase for Ralenkotter, whose high profile in the industry resulted in him being chosen to lead the U.S. Travel and Tourism Board, formed when President Barack Obama signed the Tourism Promotion Act into law this year.

The authority is in the third year of a freeze on wages as room-tax revenue lags by double-digit percentages from last year.

When the story broke on our sister newspaper’s website, lasvegassun.com, people weighed in from all sides.

Most had no sympathy for Ralenkotter, who makes $260,000 a year and was awarded an extra $68,000 in 2007, the last time the authority’s board authorized a performance bonus.

Although Ralenkotter’s wage is frozen in six figures, authority rank-and-file workers are furloughed one day per pay period — roughly a 10 percent pay cut. The board decided on the furlough plan to avoid layoffs.

The authority, incidentally, is in the third year of a five-year labor agreement with the Service Employees International Union. In the third year, negotiations could be reopened to consider cost-of-living wage increases. Talks on across-the-board pay hikes are at an impasse and negotiations next will go to a fact-finding phase. And the furloughs continue.

Although Ralenkotter and 81 executives and middle-management employees don’t have unpaid days off, they’ve worked without a raise since 2007.

How much should Ralenkotter be paid? The authority conducts a compensation survey every three years. Mark Olson, vice president of human resources, said a new survey is due this year.

But three years ago, the last time such a survey was completed, Performance Solutions International and Fox Lawson & Associates, which compile compensation data nationally, determined that Ralenkotter’s pay should be increased substantially.

Performance Solutions, which focuses primarily on the convention industry, recommended an increase of 43.8 percent, while Fox Lawson, which studies local governments and private industry, said he should get a 33 percent increase just to bring him up to the nationwide industry average.

Ralenkotter’s counterpart in Orlando, Fla., Gary Sain, made $374,592, including $59,352 in bonuses and incentives in 2007.

The LVCVA is different from most visitors bureaus because it oversees both the marketing of the destination and the management of a convention center. In most convention cities, different executives and governing boards handle the two responsibilities.

Although evidence suggests Ralenkotter is undercompensated, would he ever leave the authority? He’s made no secret of the fact that he loves his job and loves Las Vegas. To see him leave for another city would be like seeing all-star catcher Johnny Bench wearing a uniform other than that of Ralenkotter’s beloved Cincinnati Reds. It isn’t likely that someone with 38 years with the LVCVA is going to look to work for some other Las Vegas company, just because there haven’t been raises in three years.

But it could happen.

Visitor statistics

Although more people came to Las Vegas in March, April and May this year, June was a good month for visitation because the percentage increase over the same month a year ago was the highest it’s been in 2010, recently released authority statistics say.

The 3.1 million visitors to the city were a 4.3 percent increase over the total in June 2009 and that increase put visitation in positive territory against last year at the year’s halfway point. Through June, 18.5 million visitors came to Las Vegas, 1.9 percent more than for the first six months of 2009.

I’m not quite buying the LVCVA’s claim that “monthly visitor volume has surpassed or matched prior-year levels since September 2009.” Statistically, a 0.1 percent decline is considered “flat’ against the previous year, but in most people’s books, it’s a decline just the same. That’s what happened in February. Still, an increase in nine out of the last 10 months isn’t bad.

In addition to visitor volume climbing into positive ground, the average daily room rate went up for the fourth straight month and at 6 percent over June 2009, it was the best percentage increase of the year.

The average rate for the month was $89.54 and it pulled the six-month total average to $95.83, a 0.5 percent increase over the first six months of 2009.

All that was accomplished while occupancy was down for the month. Overall, occupancy was down just 0.1 percentage points to 82.1 percent. Not bad considering room inventory is up 5.3 percent to 148,524 rooms.

Evidence shows that drive-in traffic has filled some of the gaps left by a decline in air traffic. The average daily auto traffic on all major highways is up 4.8 percent to 94,374, offsetting the 1.1 percent decline in air traffic to 3.4 million passengers.

But tourists are gambling less. Clark County gaming revenue fell 6.9 percent in June to $640.1 million with the Strip down 7.6 percent to $383 million, downtown Las Vegas down 11.7 percent to $40.2 million and the Boulder strip off 8.8 percent to $62 million.

Ottawa, eh

Canadian discount air carrier WestJet Airlines has announced new twice-weekly seasonal round-trip flights linking Las Vegas with Ottawa, Canada’s capital.

Calgary, Alberta-based WestJet, one of the fastest-growing airlines serving McCarran International Airport, will offer flights between Las Vegas and Ottawa Thursdays and Sundays beginning Dec. 9. The seasonal service is scheduled to end April 28.

Flights will leave Ottawa at 4:45 p.m. and arrive at McCarran at 7:04 p.m. Flights from Las Vegas will leave at 4:15 p.m. and arrive at Ottawa International Airport just before midnight. WestJet will use twin-engine Boeing 737 jets on the route.

The new flights were announced in conjunction with other seasonal increases WestJet plans for Ottawa. The airline offered additional flights from there to Cancun, Mexico; Punta Cana, Dominican Republic; Montego Bay, Jamaica; and Fort Lauderdale, Fla.

WestJet offers 41 flights a week in and out of Las Vegas with nonstop service to Calgary; Edmonton, Alberta; Montreal; Toronto; Vancouver, British Columbia; and Winnipeg, Manitoba.

Among international operators at McCarran, it is the busiest airline.