The Nevada gambling and convention mecca shows signs that it is slowly emerging from the depths of its recession-driven tourism crisis. By David Pye, May/June 2009
Las Vegas
After one of Las Vegas’s darkest periods in recent memory, there are signs that the city is slowly emerging from the depths of the economic crisis.
In recent months, meetings business is down as much as 20 per cent across the board. The city has endured everything from pure cancellations to postponed conferences, slashed budgets and drops in attendance by as much as 30 per cent.
Difficult Times
“Business has been affected significantly and things have been remarkably difficult,” admits Michael Massari, vice-president, Las Vegas Meetings by Harrah’s Entertainment. “It’s a challenge that we’re facing in the meetings industry in general and we need to get better at convincing people how important meetings are to the growth of their businesses.” The company is the consolidated meetings and conventions arm of seven Harrah’s properties, which, collectively, do approximately $380-million annually in meeting business and offer more than 1-million sq. ft. of meeting space.
“One of the manifestations of our structure is that you can have your continental breakfast, breaks and luncheons at Paris, your opening gala dinner at Caesars Palace and your closing reception at Rio,” explains Massari.
While looking at poor numbers for 2009 and 2010, Massari sees things shaping up very well for 2011 and 2012.
“Broadly, this is a short-run problem because, at the end of the day, meetings are about growth,” he says. “In the long-run, if companies expect to grow their way out of the challenges they are facing, then meetings will have to be a big part of that. Nothing good ever happened until someone held a meeting.”
The “AIG Effect”
The city has also had to battle back from the “AIG Effect,” where the corporate market has become gunshy at the prospect of negative public perceptions. Since February, when President Barack Obama warned corporations that “they can’t go take a trip to Las Vegas…on the taxpayers’ dime,” the city has experienced 340 meetings and conventions cancellations, costing it more than $130-million.
MGM Grand
“More and more CEOs are telling me that they love doing business in Las Vegas, but that they need some cover,” says Chuck Bowling, executive vice-president, Mandalay Bay. “I think that our efforts at educating people about the positive ROI has provided that cover.”
Mandalay Bay forms part of the MGM Mirage portfolio, which comprises close to 50 per cent of major hotels along The Strip. The meetings business accounts for anywhere from 10 per cent to 40 per cent of each property’s overall market mix, with Mandalay Bay being at the high end.
Best Value
“We’ve been filling our empty spaces by contacting people we have been doing business with for years, working with them to see the value in booking their meetings right now,” says Bowling.
The value has never been better for holding meetings or conventions in Las Vegas, with prices on everything from airfare, hotel rooms and meetings space being slashed. Las Vegas also has the advantage of experience on its side, with teams of seasoned meetings-planning professionals.
“This isn’t the first time we’ve faced perception issues when trying to earn the business of certain customers, but it’s our ability to execute meetings and support our customers that will decide whether or not we earn that business,” says Massari.
Moreover, Las Vegas is home to three of the top five convention centres in the United States and offers almost 10-million sq. ft. of meeting space.
The city infrastructure is equal to the task, with approximately 145,000 hotel rooms, an international airport minutes from the city centre and a portfolio of some of the continent’s best restaurants and entertainment options. By day, Las Vegas is a designer shopper’s paradise and a gateway to the natural beauty of Nevada and the Grand Canyon.
Sunnier Days
While residential development projects have been scrapped or put on hold, hoteliers have fought through the challenges they are facing and look ahead to sunnier days. In July, Caesars Palace will unveil its new meeting facility, adding 100,000 sq. ft. of space to the Harrah’s portfolio.
“We had an opportunity to cancel the project, but we chose not to, because it’s been well received by our customers and we already have significant business on the books,” says Massari.
Collectively, the city of Las Vegas is highlighting its many and varied core strengths, fighting through adversity to retain its supremacy in an industry that will inevitably rebound.
— David Pye is a freelance writer based in Montreal.
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