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April 23, 2014

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Signs of a surge in Las Vegas conventions

Rebound in corporate travel to help convention industry regain footing

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Steve Marcus

Show-goers browse the show floor on Jan. 8, 2009, at the International Consumer Electronics Show in Las Vegas. About 120,000 to 130,000 people have attended the convention in recent years.

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After more than a year of lethargic convention attendance in Las Vegas, the meetings and trade show industry will regain much of its health in 2011.

Southern Nevadans can thank rebounding corporate profits, a relentless convention sales force and that irksome volcano in Iceland for putting the local industry on the road to recovery.

Using 2007 as a benchmark — the year Las Vegas saw a record 6.2 million conventiongoers — next year’s visitor numbers are expected to reach levels on par with late 2005 or early 2006 in the run-up to those glory days.

After stellar 2007, convention traffic tanked.

The recession hit Las Vegas in August 2008 when convention traffic fell 22.3 percent from the same month a year earlier. There were double-digit percentage declines in four of the 12 months of 2008, even though the annual decrease was just 5 percent.

In 2009, convention traffic was off 23.9 percent for the year and August 2009 was down a stunning 58.9 percent from that ugly August 2008 number.

“We didn’t just ease into it,” said Chris Meyer, Las Vegas Convention and Visitors Authority vice president of sales. “It went right off the cliff in 2008, and it stayed that way for several months.”

The crash was a byproduct of the Great Recession as companies retreated from travel. Local experts are convinced that a recovery didn’t begin immediately because of President Barack Obama’s remarks about spending economic stimulus money on corporate junkets.

“It had a chilling effect for the entire industry, but it may have hurt us more because we got singled out,” Meyer said. “A lot of companies and organizations said they felt horrible about canceling their events here, but they also said, ‘When we get a chance to rebook, we’re calling you first.’ ”

Jan Freitag, vice president of global development for STR, a travel research company based in Hendersonville, Tenn., said the dive in corporate travel wasn’t just a Las Vegas phenomenon.

In fact, in more cases than not, Freitag said, Las Vegas defies conventional travel trends.

“There are three basic trends we’re watching,” he said. “Nationwide, the growth rate of new hotel rooms has decreased. Las Vegas has almost always been an exception to the market in that area.”

The second trend, he said, is that room demand is up. For the first 10 months of 2010, the total number of rooms sold was up 7.6 percent from the previous year.

In Las Vegas, room sales were up 3.3 percent during that time, although room inventory was up 4.6 percent, thanks primarily to the opening of CityCenter and new towers at the Hard Rock Hotel, Golden Nugget and Planet Hollywood in 2009.

Freitag’s third trend is key to the rebound in convention traffic — that business travel is returning.

“I think many corporations realized they cut a little too close to the bone in 2009,” Freitag said.

Business travel can be broken down into two segments, the transient traveler — the traditional “road warrior” who goes out on corporate sales calls and one-on-one meetings — and the group traveler who attends conventions, trade shows and corporate meetings.

Freitag said transient travel has rebounded, but group travel is lagging slightly, which is why Las Vegas hasn’t seen a big boost in business travel.

But that may change next year.

Meyer said the recovery would consist of a combination of factors. Several meeting planners who promised to call Las Vegas when the time was right have come through. Many shows that have been here annually will see greater attendance.

And, Las Vegas will see a nice boost next year from conventions that rotate from city to city.

Chuck Bowling, an executive vice president of MGM Resorts International, said it is seeing a resurgence on the convention side because corporate executives view trade shows as opportunities.

“There’s confidence in corporate America that earnings are solid, and the economy is starting to take a recovery,” Bowling said. “People are saying, ‘Hey, I have to get out in front of customers, I’ve got to reorganize my sales groups.’ ”

Corporate confidence also is leading to greater attendance, he said.

“Annual trade shows are starting to see bigger numbers coming back than ever before,” Bowling said. “Instead of in the past, they may have sent only 10 people; they’re now sending 20 people.”

Rossi Ralenkotter, Convention Authority president and CEO, said it has expanded its outreach. Representatives are getting in front of executives who make decisions about where to conduct their meetings and trade shows and talking to industry suppliers to get more exhibitors at shows.

The authority also is doing more globally, working with associations, trade groups and companies to bring more international business to Las Vegas.

Part of the strategy is to put the city on display. The authority believes once business travelers get a taste of Las Vegas and the amenities it has beyond gaming, they may be more inclined to return on vacation.

MGM has bought into that idea, bringing conventions involving travel experts into the city for shows at its Aria convention center. An American Express travel reservation training session is planned there Jan. 9-12, and Travel Weekly magazine’s 2011 trade show is scheduled Feb. 14-18.

Meyer said the authority has been aggressive in pursuing business leads. His staff became road warriors, making 2,800 sales calls over 18 months.

Meyer’s team approached some of the corporations and organizations that appeared to be promising prospects before the recession and opened dialogues with technology companies and pharmaceutical outlets that need to train their sales reps on new drugs they have developed.

The authority also changed one of its websites, vegasmeansbusiness.com, to speak directly to CEOs and meeting planners. It provides news about local convention and meeting facilities and includes testimonials from organizations and executives who have had successful events here.

Some annual conventions on the calendar indicate they’ll have good turnouts, so much so that the Nevada Taxicab Authority is preparing for the increase by allowing more cabs on the streets.

“We started to see some of it come back in ’10,” Meyer said. “We had a couple of shows that had an 18 percent increase in attendance this year.”

Click to enlarge photo

Show-goers browse the show floor on Jan. 8, 2009, at the International Consumer Electronics Show in Las Vegas. About 120,000 to 130,000 people have attended the convention in recent years.

First up is the International Consumer Electronics Show, which conservatively estimates a turnout of 120,000 people for the four-day event that begins Jan. 6 at the Las Vegas Convention Center. The Adult Expo at the Sands Expo & Convention Center that runs simultaneously with CES forecasts 30,000 attendees.

Later that month comes the Shooting, Hunting & Outdoor Trade Show and World of Concrete conventions Jan. 18-21.

The 2011 SHOT show is expected to draw 55,000 people to the Sands Expo and another 55,000 will be at the Las Vegas Convention Center for World of Concrete. The Let’s Play Hockey International Expo is expected to bring in 4,000 people to Paris Las Vegas Jan. 17-19, and Arbonne International’s Global Training Conference is scheduled to bring 8,300 people Jan. 18-20 to the MGM Grand.

Las Vegas is synonymous with luck, and the meetings industry got a little good luck with conventions that rotate from city to city.

One big coups was getting the International Air Conditioning, Heating and Refrigerating Exposition, which makes its Las Vegas debut Jan. 31-Feb. 2 with 40,000 delegates expected at the Convention Center.

“A quirk in calendar scheduling allowed us to sneak them in,” Meyer said.

The quirk was a small opening between established shows, which usually book space far in advance and have priority. It isn’t always easy to schedule a major show because they usually take several days to move equipment in and out in addition to the scheduled show dates.

That’s what’s in store for Las Vegas in March when ConExpo-Con/Agg, a major construction industry event that is the largest trade show in North America, comes to town. Because the show covers 155 acres — the entire Las Vegas Convention Center campus — with equipment that will be moved in and out of the city on trains and trucks over 18 days, all other events are pushed back or forward on the calendar to accommodate it.

Show organizers and the authority are forecasting attendance of 140,000 even though the construction industry is in the doldrums, because of what happened last year when the show was in Munich.

“The ConExpo event in Munich was disrupted by the volcanic eruption, and we think that’s going to create some pent-up demand for the Las Vegas show,” Meyer said.

The European version of ConExpo occurred in April, right when Iceland’s Eyjafjallajökull volcano began spewing ash that resulted in canceled flights throughout the continent. Attendance was affected, and now that the economy is turning for the better, Meyer figures there could be a dramatic boost in attendance by those who couldn’t get to the show last year.

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  1. Nice to see the Reid Recovery is underway.

    We could get other firearms related conventions if Gillespie dropped his support of the antiquated "blue card" system. Clark County is one of two places in the country that has such an unconstitutional system.

    He always wants more money, but seems to block new revenue streams.

  2. As Las Vegas always does, it is coming back step by step. Nice to see the convention business rebuilding since that is what it takes to keep the rooms filled.

    For New Years eve room rates are up over last year and the new Cosmopolitan is FULL! ;-) Many said they would never get their rates for that night but they did it and did it early. Nice to see another great holiday weekend for Las Vegas!

    It's not over but it is getting better.

  3. When have they not filled all News Year's Eve Rooms? The Strip is recovering first, the neighborhoods are still loosing small businesses, restaurants, etc.

  4. The business along The Strip and Downtown is and always has been the lifeblood of Las Vegas. Everything else is peripheral. This is an excellent positive indicator of things to come.

  5. While this bounce is happening, now would be a good time to think about how we are going to get people in and out of this town when gasoline and jet fuel prices rise to painful levels.

  6. Tell ma about the recovery when my house is worth more than half of what I paid for it. "Reid recovery".... What a crock....