Conventions boost hotel profits

May 22, 2001 10:48 AM

In the lucrative convention business, Las Vegas is like Avis: It tries harder.

The effort seems to have paid off as the second-largest convention city in the world is poised to challenge No. 1, Chicago.

Currently, the Windy City leads the country in number of conventioneers and economic impact. (Las Vegas has the most meeting space.)

But Las Vegas is rapidly closing the gap. Conventions and trade shows last year contributed $4.3 billion to the local economy, a 4.3 percent increase over the previous year. Chicago conventions boosted its economy by $6 billion.

Moreover, in the first three months of 2001, Las Vegas enjoyed whopping gains in its convention trade. Attendance increased 6.7 percent, 27.8 percent and 33.6 percent in January, February and March, respectively, while the economic impact resulted in gains of 19.6 percent, 34.2 percent and 41.5 percent over last year’s figures.

But Las Vegas is looking for a larger slice of the pie. The Convention Center is in the midst of a $150 million expansion that will increase exhibit space by 1.3 million square feet, bringing the center’s total to about 2 million square feet.

Meanwhile, Mandalay Bay last month announced plans to build a 1.8 million-square-foot Convention Center to go with its existing 190,000 square feet.

When all the projects are completed in about 18 months, Las Vegas will have an unprecedented 9.3 million square feet of convention and meeting space, ranking it No. 1 in the world.

Convention officials point out that rank has its privileges, but the bottom line is, well, the bottom line.

"Our convention and trade show business has never been healthier," said Rob Powers, vice president of communications for R&R Partners, the marketing arm of the LVCVA. "And its impact has had a very positive effect on our economic base."

Indeed, the economic base provided by convention customers is impressive. According to the LVCVA, the average conventioneer spends 4.1 nights in Las Vegas, the average tourist, 3.7 nights. Factor in the higher room rates typically paid by conventioneers and it’s not surprising to see why hotels want to grow their convention trade.

In addition, meeting and trade show visitors spend an average of $1,273 on non-gaming items, conventioneers spend $961, while tourists spend an average of $630.

While Las Vegas hosts more major conventions than any other city (34 of the 200 largest conventions in the country were held here last year), the smaller and medium-sized conventions can also contribute to the income stream.

In fact, of the 4,000 meetings held in Las Vegas last year, 90 percent of them had less than 500 attendees, and more than one-third of the meetings had less than 100 attendees.

The resulting market for small, often non-casino hotels, has been a lucrative one.

"Convention directors like the fact that their delegates won’t get swallowed up by a casino during the lunch break," said Lisa Kuckenbecker, sales manager at St. Tropez All Suite Hotel.

Another non-gaming hotel popular with small conference planners is the Alexis Park on Harmon Avenue.

Said Jane Khaldy, vice president of sales, "I think our strongest selling feature is we don’t have a casino."