Las Vegas today is like a football team with a great running back but only three offensive linemen in front of him.
That sums up the importance of the Strip’s convention business when it comes to Las Vegas’ recovery from a 2 ½-month shutdown from COVID-19. That recovery is quite uncertain with coronavirus cases spiking in Nevada and nationally and will only cause trepidation for businesses that are more cautious than tourists when it comes to sending their employees to conventions.
Conventions are on hold for now as Nevada limits gatherings to 50 people. Gov. Steve Sisolak on Monday directed the state’s second phase of reopening be extended through the end of July.
Gaming analysts have been clear: Las Vegas won’t recover until the convention industry comes back. And that isn’t going to happen until fears of the virus dissipate — bolstered by a vaccine that’s expected to be widely available in 2021 at the earliest.
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Conventions are why Las Vegas has had a midweek occupancy averaging 86 percent the last five years, approaching the weekend rate of 94 to 95 percent.
Since the June 4 reopening, casinos haven’t opened all of their rooms to help with social distance and had weekend occupancy of 50 to 60 percent in some cases. In contrast, weekday occupancy has been 25 to 30 percent, according to Steve Hill, president and CEO of the Las Vegas Convention & Visitors Authority.
Las Vegas has been the No. 1 trade show destination in the country and in 2019 some 6.6 million people attended meetings and conventions, contributing approximately $6.6 billion in direct local economic impact, according to the LVCVA. And the average convention goer spends about $1,200 a trip, making them even more valuable than tourists.
Even when the convention business resumes, it won’t be the same. For now, it will change into more of a hybrid model where people can attend remotely via teleconference until they feel safe to travel again.
That will be put to the test at the Global Gaming Expo at the Sands Convention Center that attracted more than 27,000 in 2019 and goes forward October 5-8.
The 2020 Consumer Electronics Show (CES) attracted more than 170,000 from around the globe, and the show is scheduled to return in January. It will be held at the Las Vegas Convention Center that will debut its expanded space as part of a $1.47 billion renovation project.
It’s all part of Las Vegas’ double down bet placed on the future and importance of conventions.
Caesars Entertainment spent $375 million for a new conference center that offers the first outdoor meeting space in Las Vegas that can help in the coronavirus era. Other resorts along the Strip such as Wynn and MGM Resorts International have made major investments that a year ago had projections of convention space expanding 30 percent from 11.5 million square feet over a couple of years.
Gaming consultant Josh Swissman of The Strategy Organization said he doesn’t expect group business to “have a pulse” until the fourth quarter and it “will look completely different than pre-shutdown” and predicted many of those will be smaller meetings instead.
“CES still plans to hold its trade show in January, and that will be a big vote of confidence for the rest of the meeting and convention industry that Vegas is still open for business and ready to welcome groups, whether they are large or small,” Swissman said. “The meeting and convention business will reinvent itself in how it accommodates a large number of attendees in the post-COVID world that is safe and secure and healthy for everyone.”
John Schreiber, the LVCVA’s vice president of business sales, said since March 23, conventions have canceled at the Convention Center representing 412,500 attendees, while another 10 shows have rescheduled for later in representing what was originally projected at 218,000 attendees. SEMA, the auto equipment show that traditionally attracts more than 160,000 people, is scheduled for November.
Schreiber called this “an unprecedented time,” and the expectation is that the Las Vegas experience for both leisure and business travel will look a little different for a while.
“Right now we’re seeing some conventions reschedule while others pivot to a virtual format,” Schreiber said. “One thing we do expect when meetings and conventions return to the destination is that they may bring fewer attendees, and they may offer a mix of in-person and virtual options, as CES announced it will do in January 2021.
“While the new normal for conventions will likely include some amount of social distancing, limits to large gatherings, use of masks and other personal protective equipment and increased cleaning and sanitization, we expect that will adjust over time.”
Changes are already in the works for the Global Gaming Expo as well. Meredith Pallante, the American Gaming Association’s senior director of events, said they are planning for many scenarios, including offering virtual components for those unable to attend in person.
Even before Gov. Sisolak issued his mask mandate, the AGA said all staff, customers, and vendors would be required to wear face coverings when unable to maintain at least six feet of distance.
Pallante said they understand how important the convention business is to the Las Vegas economy, and the AGA is trying to help with that.
“While customers are beginning to return to gaming facilities as they reopen, getting business travelers and corporate events back to Las Vegas is a critical component of our economic recovery,” Pallante said. “That is why we are joining others in the travel industry to advocate on Capitol Hill for a package of tax incentives to encourage individuals to travel and businesses to host events.”