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StumbleNashville floods boost Las Vegas convention business
AP Photo/Josh Anderson
A worker walks through a large plastic sheet separating the Cascades Lobby and the Cascades Atrium at the Gaylord Opryland Hotel in Nashville, Tenn., on Monday, June 1, 2010. The Opryland Hotel sustained severe damage during the recent flooding in Nashville.
Friday, June 4, 2010 | 11:09 a.m.
Beyond the Sun
- The Tennessean: The Nashville flood
Sun Coverage
In the meetings and conventions business, one city’s tragedy can be another city’s opportunity.
While no one in the industry is happy about the death and destruction that occurred in the May 2-3 flood of the Cumberland River in Tennessee, Las Vegas has picked up more than 30 meetings and conventions that were scheduled in hotels and convention centers in Nashville.
“We never wish a (Hurricane) Katrina on New Orleans or a flood on Nashville, but meeting planners have turned to Las Vegas after those tragedies because we have the facilities to accommodate their events,” said Chuck Bowling, an executive vice president at MGM Mirage.
“We don’t like to capitalize on someone else’s misfortune,” added Eric Bello, vice president of sales at the Venetian, “but if an organization is going go somewhere else anyway, we appreciate that they’re coming to us.”
Bello said the response to the Venetian has been “phenomenal” and that his company has picked up about 30 meetings that relocated from Nashville resulting in an additional 30,000 room nights for the company.
The biggest of those is a closed-to-the-public summer dealers meeting of the Harley-Davidson motorcycle company, which has booked 2,400 rooms a night for four nights in July.
The company met at the Venetian in 2003 and Bello said he has tried to convince them to return. It was fortunate, he said, that the hotel was able to accommodate the company on short notice.
The Las Vegas Convention and Visitors Authority said it had received inquiries from 10 organizations about moving their events to Las Vegas since the flood that killed 29 people in three states and caused billions of dollars in damage to homes and commercial facilities along the Cumberland River.
Some organizations don’t go through the LVCVA and work directly with hotels with which they’ve had a previous relationship, which is why the Venetian had 30 contacts and MGM Mirage had around 18.
Bowling said his company has worked mostly with organizations seeking luxury accommodations and business has been directed to Aria, Mandalay Bay, Bellagio and the MGM Grand.
Bowling said the 11th-hour bookings have been a good boost for MGM Mirage, but the bigger picture indicates that convention business is gradually rebounding.
“Overall, we’re definitely seeing some general signs that corporate America is done retrenching and they have acknowledged that they need to get out in front of their customers,” Bowling said. “We’ve seen a really big uptick in short-lead corporate conferences.”
One of the companies that appears to have suffered the most in the flooding is Gaylord Entertainment Co., which operates the Gaylord Opryland Resort, the Grand Ole Opry and several other Nashville attractions.
The Gaylord Opryland Resort has 2,881 rooms and 600,000 square feet of convention and meeting space and represents 10 percent of the total number of hotel rooms in Nashville. The resort receives more than 1 million visitors each year, generating nearly 25 percent of Nashville’s total hotel tax revenue.
The company reported Thursday that it has assessed the flood damage.
“Flood damage requires an extraordinarily complicated repair process,” Gaylord Entertainment Chairman and CEO Colin Reed said in a statement. “We have had to manually test every aspect of our mechanical, electrical, information technology and power generating systems in order to understand what works, what needs to be repaired and what needs to be replaced.
“There is an entire city of infrastructure which operates under the Gaylord Opryland campus, the majority of which was fully under water, and thus the assessment process has been extensive,” he said. “At this time we feel that we are able to provide an accurate overview of the damage and restoration, projected costs and timelines and an update to our employment strategy and our progress relocating groups displaced by the flood restoration work at the hotel.”
The cost to restore the Gaylord Opryland alone is estimated at between $165 million and $172 million with the total repair costs for all of Gaylord’s holdings estimated at between $215 million and $225 million.
Executives expect the Grand Ole Opry House would reopen by Oct. 1 and the Gaylord Opryland by Nov. 15.
The Gaylord Opryland had more than 329,900 room nights booked for convention travelers at the hotel over the next six months. The company has tried to transfer conventions to other hotels within the Gaylord network, including the Gaylord Palms near Orlando, the Gaylord National near Washington, D.C., and the Gaylord Texan in suburban Dallas.
The company has transferred 61,984 room nights to other hotels in the state of Tennessee and executives say some groups relocating to non-Gaylord properties are long-term loyal customers committed to booking future events at Gaylord properties.
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Just goes to show you there are two sides to every story and hopefully these events will help bring some relief to LV. Everything and anything will help at this point.
Las Vegas has done a good job of staying out of the fray given the misfortune of others - Nashville, Arizona and now the Gulf. I suggest to those that benefit from these issues that it might make some sense to make some discrete strategic donations back to the communities providing these opportunities. We just need to realize what has been gained can be equally lost as we learned from some unfortunate comments last year and just as we learned a lot of people can suffer from these situations.
What happened to Gaylord Opryland should serve as a valuable lesson to anyone considering placing their operations within a 100-year flood zone. Although there is a 99 to 1 chance (1% chance) of the catastrophic flood occurring in any single year, when you ask the probabalistic question a little differently, based on the number of years of expected occupancy, you get a different sense of the risk.
For example, say your home or business will occupy a site in the 100-year floodzone for 20-years. That results in a 5 to 1 chance (16.5% chance) that you will be flooded out in that time.
30-years: 7 to 2 (22.4% chance)
50-years: 9 to 4 (30.6% chance)
100-years: 17 to 10 (37.0% chance)
Like the overwhelming number of probability/risk questions considered by the human mind, you have to do the math to get a real understanding.
I don't know who is going to issue flood insurance to Gaylord Opryland, but I hope it's not backed by the taxpayers through the Federal Flood Insurance Program.
Now ya got them in the door again...Show them they need to come back again
The truth is what you can read between the lines:
Vegas has empty meeting and guest rooms right now.
This allowed these hotels to grab this business.
When Katrina hit New Orleans, Vegas was running pretty full and there were few dates where the hotels had space and rooms.
So when the hotels talk about how business is improving- hard to believe it when the Venetian and MGM can pick up large pieces of business short term. Truth is that business really has not picked up that much, new trade shows have not been brought into the city by the LVCVA, Venetian/Sands Expo or Mandalay.
Why - hotels were fat and happy 2 years ago charging sky high rates to our best customers which did not help in making people loyal to remaining in Vegas for their events. The LVCVA really is not selling with any success to big events requiring large amounts of space.
Too many hotel rooms & too many flights moved out of Las Vegas and no one paying any attention to this.
Unions that wanted more and more of their piece of the pie making labor much higher than ever before in Las Vegas.
Thus - these properties can pick up this business. I am sure without this luck, the commentary that Vegas was coming back would still be promoted by the LVCVA to anyone silly enough to listen.
What is going to happen when Nashville dries up and can take their business back? More empty space and guest rooms with press releases stating the contrary.
With no one providing any real solutions to solve the problems for Las Vegas.