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May 25, 2012

Destination Overview:Las Vegas' business scene

After several years of visitor downturn and negative publicity, Las Vegas is reaffirming its status as a prime events destination. The city struggled during the Great Recession, especially after President Barack Obama encouraged companies to cut spending and conduct “virtual” meetings instead of conferences. And then the GSA scandal broke after a government agency spent more than $800,000 of public funds at a Vegas event, prompting legislation that would limit federal spending on conferences and meetings.

But the city is bouncing back: Las Vegas saw 38.9 million visitors last year, the second highest total in its history. (Nearly 5 million of those were in town for business, and the city saw an 8.8 percent increase in convention attendance over 2010.) To compare, in 2009, during the worst of the recession, the city saw 36.3 million visitors, a drop of 3 percent from the previous year, with a near 24 percent drop in convention attendance. By the following year, the meetings industry was down another 7 percent. As of March, Las Vegas has already seen a 3.6 percent increase over the first quarter of 2011, and the Las Vegas Convention and Visitors Authority expects the city to get 40 million visitors this year.


Many of those visitors will be there for business reasons: The city hosts nearly a quarter of the nation’s largest trade shows and seven of the top 10. For the past 18 years, it has been ranked as the top trade show destination in the country by the Trade Show News Network (TSNN) in its list of the top 250 trade shows in the United States ranked by net square footage. Last year, Las Vegas hosted 55 of the largest shows, more than the next two competitors combined. (The largest on the list were the Association of Equipment Manufacturers’ triennial CONEXPO-CON/AGG followed by the Consumer Electronics Association’s annual International Computer Electronics Show. Both were held at the Las Vegas Convention Center.)

And while the GSA scandal was harmful on many levels, private and public groups are working together to find a common ground that will limit government spending but keep the meetings industry going. Chris Meyer, Vice President of Sales, Las Vegas Convention and Visitors Authority, told International Meetings Review that the GSA scandal reintroduced the debate about the value of face-to-face meetings. “The isolated incident was not about the meeting location, but instead about the decisions made by a handful of GSA employees,” he said. “Face-to-face meetings are an essential element of doing business.” To that end, the LVCVA is working with congressional delegates, the U.S. Travel Association and other industry groups to educate various stakeholders about how face-to-face meetings stimulate the economy and provide jobs. “While more checks and balances may need to be implemented to ensure federal tax dollars are spent wisely, it's important that any new legislation is reasonable and fair.”

How to Organize a Vegas Meeting

Las Vegas hosts more than 19,000 meetings annually, with an estimated impact of $6.3 billion (and 58,000 jobs) to the local economy. Meyer credits three distinct components for a successful business meeting: “Space, dates and rooms. If you don’t have those three, you can’t do good business meetings.”

The first step, he says, is to determine what type of space is needed—a convention center or a ballroom or just a simple meeting room. Then, determine how many people will be there, and how many rooms should be blocked for attendees. “Do you need 1,000? You have to choose a bigger place to accommodate them. If you just need 50, you can [book a whole small hotel]. And then dates. Dates are important, because some times of the year, it’s harder to find space. You don’t want to have your event at the same time as the Consumer Electronics Show. Do it one week after.”

As a brand, Meyer says, Las Vegas is powerful. “I can’t quantify how many ballrooms we have in the destination, because people keep changing or adding on to their spaces.” He estimates at least 50 major ballrooms of substantial size—10,000 square feet or larger. The largest, he adds, is 100,000 square feet. “If you have a lot of choice, that creates competition. Competition gives planners ability to see how a program will fit lots of different choices, as opposed to one or two choices.”

Of course, with so many options, choosing the right property can be tricky. For example, while most of the biggest properties are casinos, some groups might not want to be close to gambling. “If you’re looking at a religious group, especially something Orthodox, you’ll look for properties [where] either the meeting space is separate, or the space is accessible without accessing the casino,” Meyer says. “We had the Rabbinical Assembly, and [they] needed place without casino right there.” The Assembly chose the JW Marriott, which has 60,000 square feet of meeting space, and never had to go through the casino on their way to their events. “They’re coming back in 2014,” Meyer adds. 

The design of different properties also plays a part in deciding what kind of event is right for which space. “The Riviera and the LVH hotels have large footprints, while The Cosmopolitan is stacked [vertically]”, Meyer explains. “It has a small footprint, but the meeting space takes up levels. They’ll deliver a different standard because of the physical aspect.” Vertically designed event spaces need large elevators to bring in equipment for trade shows and meetings, while spaces that stretch out can be opened directly to loading docks for easier installation. “By offering different facilities, we can see what complements,” Meyer says. “Everything in New York City and Chicago is all vertically integrated. Outside of the city centers, the spaces have larger footprints. And the difference between those places and Las Vegas is that my airport is five minutes away. Everything is close to make everything better.”

Vegas Trends
Since Las Vegas is just as popular for leisure travel as business, its hotels can be what Meyer calls “midweek friendly,” not requiring any kind of weekend booking and creating a clear division between the two worlds. A recent trend, however, is that some conferences events are being held over weekends, notably at Caesars’ hotels and the MGM, which Meyer says have 34 percent of all rooms in Las Vegas among them.
Meyer has also noticed a trend of shorter booking windows. “You’re lucky if you can get corporate groups to commit more than 60 days out,” he says, estimating that a full 20 percent of exhibitors on tradeshow floors only book two months in advance. 
“Nothing replaces face-to-face networking,” Meyer says. “During the recession, companies tried to ‘telepresence’ with webinars and electronic meetings. It contained the cost, but it did not grow the market share or get the return they were looking for. Now that the balance sheet is in better shape, people want to get together and have that human experience.”

Looking Ahead
As mentioned earlier, Las Vegas is expected to get more than 40 million visitors this year. This will be aided by the June 27 opening of     McCarran International Airport’s new Terminal 3, the largest component of the Clark County Department of Aviation’s ongoing capital improvement plan. Seven of Terminal 3’s 14 gates will be designed to accommodate international air service, including secured access to a U.S. Customs & Border Protection area capable of processing up to 2,000 international passengers per hour. Up to five wide body jets can be serviced simultaneously, allowing for more international air service than is currently possible at McCarran’s smaller, four-gate international facility at Terminal 2.

On the same day, Copa Airlines will launch nonstop flights between Las Vegas and Panama City, opening 34 new destinations to Las Vegas. Instead of going through customs in Miami or Houston before flying on to Vegas, international visitors will be able to arrive directly, clear customs and head straight to their hotels.

And farther out, the International Pow Wow will return to Las Vegas next year, bringing international visitors to check out the destination and further shining a spotlight on the city’s convention capabilities.

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