SUCCESSFUL MEETINGS: Welcome to the Fourth Annual Las Vegas Leadership Roundtable.
We always start these roundtables with the same question: How
is the meetings industry doing in Las Vegas, and what is its
MICHAEL MASSARI: It's really been a rollercoaster for us the
last four years or so. I mean, we had a really substantial
business that was doing really well, and then all of a sudden
it fell off of a cliff in the fall of 2008, and we saw a
30-percent decline. We've talked about that ad nauseum over the
years. And then in summer 2010, things really rebounded and we
recovered almost all the volume losses that we saw in the fall
of '08, and a lot of the pricing losses that we saw. And then
the beginning of this year it's just bouncing along at that new
level. So it's been a real dogfight, I guess, is the best way
to think about it, but just up and down, a real rollercoaster.
That's what we're seeing.
CHRIS MEYER: Meetings-wise, there's a lot of activity out
there, more than we've seen in a number of years. And everybody
seems to have a very distinct competitive field that they're
playing in. Which, from a planner's perspective, is a good
thing. But this year started off very, very strong. We had our
usual dip in the summer. And we've come back in the fall
period. As we look forward into the next year, it looks really,
FLETCH BRUNELLE: When you take a look at the latter part of
this year - and we see this every four years with the
presidential election - there is a little bit of uncertainty in
business. So from that perspective, the last-minute business
hasn't come in as strongly this year. We believe once there is
certainty in the marketplace, when the election is done -
whoever wins the election - there will be some certainty in
business. So when we get into 2013, we're going to feel it
quite well. But right now, 2013 is looking extremely good.
BRIAN KEENAN: It's been kind of a struggle to get back from
2009 when everything went downhill, but we're starting to see
some good signs for '13 and '14 definitely.
DAVID SUKALA: Same thing with us. We're rebounding well in the
fourth quarter, but it seems like everything is super short
term. Just this morning, I looked at two RFPs that came through
Cvent and Starcite for 1,200 and 1,400 attendees for October
and November of this year.
BELLO: It's a competitive landscape, especially for the
big-box shows. I think of groups like the CTIA Wireless
which New Orleans
won a few years ago because they were able to
offer five great concessions that we were unable to offer
aggressive concession strategy. And you see that in the bigger
convention centers, like McCormick in Chicago
and also Orlando
and across the United States with the hotels. The Gaylord
properties continue to be competitive with us on big boxes.
CHANDRA ALLISON: In spite of that competition, we've seen rates
getting stronger and RevPAR going up quite a bit. So, yeah, all
indications are that the meetings industry is getting stronger.
MIKE DOMINGUEZ: What's encouraging for us is, as a company [MGM
Resorts International], we're going to get back to 2008 room
levels for convention business going into next year. And it's
exciting to see that we're getting back to that type of number
as far as volume. The further we get away from 2010, the
stronger that starts to look and the pace starts to look
better. But I think it's important when you're talking about
competitive cities, that in the top 25 cities, when you look at
the "[2012 Travel Click] North American Hospitality Review,"
we're finally seeing booking pace expand.
That kind of compression will bode well for Vegas, you know,
once it settles. We've been looking at that data for the last
two and a half years, and we could never see that kind of trend
outside of 90 days. And then, to now see it trend for 12 to 18
months, it means thatmeeting planners' booking windows are
expanding, and it's probably because they're being told "no."
And the one thing we saw is tightening, when I looked at the
data - and it's echoing what Fletch talked about - we do think
it's going to open up once the election is over. There's $2
trillion sitting on the sidelines in corporate America waiting
to be spent. But I think when we saw a slowdown this summer, it
was after the Q2 earnings reports. This recovery has all been
driven by efficiency and not by revenue growth in corporate
America, and we finally felt that in June because you can only
grow it so far from efficiencies. And I think that's been the
cause of the slowdown toward the end of the year.
BELLO: You're right. I don't care whether it's here or any
other of the top cities that you've got in the United States;
they're beginning to look to extend that booking cycle. So they
are booking a little bit further out.
DOMINGUEZ: The media, especially in our industry, hasn't talked
enough about the fact that we're at record demands in North
America with no new supply. There's no new inventory coming in,
and that's why rates are starting to push, and that's why the
booking windows are starting to expand.
MASSARI: And I think that one of the things that's driving that
all-time high demand is this whole notion that all the meeting
who went through this downturn really came out of it
on the back end, saying, "If I want my company to grow, if I'm
going to launch new products, if I'm going to train my sales
organization, if I'm going to raise my stock price or increase
membership in my organization - whatever it is - I'm going to
have to do it on the back of the face-to-face meetings. And
that's a good way to spend my marketing dollars. And I learned
that, in part, because I took it away for 18 months, and my
business did not do well, and my competitors that did not take
it away did better." And so you have a whole generation of
meeting planners who feel really confident about why they have
meetings, when they have them, and whom they invite. I think
that's one of the things that is really driving that demand.
ALLISON: I think, to your point, it's also that a lot of the
C-suite executives now support those initiatives. The meeting
planners have more confidence in what they're saying to their
executives because they've seen exactly what you're saying.
They saw that downturn, and they saw what impact it made to
their revenues for their organizations. So it's really helped
them to be more supportive of our industry's role.
SUCCESSFUL MEETINGS: Comparing 2012 to the end of 2008, it seems that Las Vegas is
in a much stronger position to deal with its perception issues
than it had been before. We had the GSA scandal earlier in the
year, and it seemed like that really didn't land anywhere near
as badly as the AIG scandal did. Can any of you just talk about
the position Las Vegas is in right now to weather those types
of incidents when they come up?
MASSARI: It's not just that Las Vegas is stronger - the
industry is stronger. We're all better, and we're smarter. You
know, we figured out better ways to do things that were caused
by this downturn. I think we have better people doing things in
a better way. There is no question that we're stronger.
In terms of the GSA relative to AIG, our position on this is
that we want to be in the meetings business because we're
meetings professionals. We want to host meetings where people
are doing very productive activities, where they're growing
their business in some way, shape, or form. I don't want to be
in the business of hosting boondoggles. If you want to have
meetings that aren't doing those things, if you're not going to
be responsible and thoughtful about your company's expenses or
the government's expenses, then have them somewhere else.
DOMINGUEZ: The GSA incident is unfortunate. But to me, what's
really unfortunate is that our government once again
overreacted to the actions of one individual or one individual
agency. The issue with GSA went much further than the meeting
itself. They had issues, within that department, of corruption
that they found during the investigation. The meeting was just
the symptom that everybody saw, and that was unfortunate. But
the legislation that's been put through by our government is an
overreaction and we haven't been talking enough about it as an
For those destinations that really rely on government business,
it's going to hit them hard because there's going to be a
drop-off of almost a third in government travel when it's all
said and done. The limitations that came through that
legislation are going to restrict how many employees from a
certain agency can even go to a conference. So associations are
going to be impacted by it down the road. It's going to have
far-reaching implications way beyond Vegas.
The Economy Factor
Let's talk a little bit about the economy. We have been in the
midst of a slow recovery, but there are some troubling things
going on right now, such as the crisis in Europe and the
disappointing job reports. What is the sense among your clients
in terms of how the economy is doing, and what effect is that
having on their decision-making processes?
DOMINGUEZ: Europe is the piece that keeps coming up, and I
don't know if we pay enough attention to it in the U.S. But the
biggest challenge with Europe is that for so many of our
Fortune 500 companies, their revenue comes from Europe, and
they're starting to now feel it as Europe continues to slow
down. That's a concern, like you saw in the earnings report in
Q2. McDonald's is having a down report. When you got down and
nailed through it, it was all driven by Europe - that's where
they started to see the decline. That's what scares me because
as that starts to sneak into the U.S., and their earnings
continue to decline, you're going to again get a tightening of
BELLO: But even during the bad times, companies still need to
carry out their meetings, they still need to be interested in
trade shows, sales meetings, and product launches. So, even
though the economy might be struggling in other parts of the
, I can't say that's going to prevent organizations from
holding meetings in Las Vegas.
MEYER: I'll take a whack at this from a different angle. I love
economists because it's a great profession where you have lots
of scientific data and you're never right about anything. So
what I rely upon is what I'm hearing from the folks around this
table. What we do as an organization that's responsible for
promoting this unbelievable, greatest place on Earth, is that
we look for markets for our partners. We have got our foot on
the gas pedal in the global marketplace. We are out there
promoting MICE business like there's no tomorrow. We're the
dominant player in the globe when it comes to convention
business. Nobody does more than the U.S. But there is a lot of
opportunity for us overseas, and we are engaging that
opportunity more than any other destination in the 50 states.
DOMINGUEZ: I think, sometimes, the disconnect is that if
meeting demand starts to drop in North America those top 25
markets start to get competitive with us again and it's hard
for us to move our rate, which all of us are trying to do.
That's the impact I look at: What's happening in the rest of
North America, outside of Vegas? Because the group rate just
declined for the first time in nine months in North America. So
here's the big question: Is it a trend, is it a blip, is it
some of the business we booked three years ago in a different
timeframe? If it starts to slow down, it starts to be a
Buyers vs. Sellers
SUCCESSFUL MEETINGS: Are we making the shift from the buyers' market to the sellers'
market? But with all these variables, is that too broad a
question? I mean, can you actually ever really say, we've made
DOMINGUEZ: We need to rephrase it, and maybe you guys in the
media could be the ones to lead this charge and change the
dialogue. When I hear "sellers' market" and "buyers' market,"
it puts us in this competitive environment, and that's not what
we are about. We're good at being partners and, candidly, it's
the economy and the market conditions that drive pricing.
That's all it is. It's not about sellers or buyers. It's about
the economic conditions saying, "I can charge more for it or I
can't." It's as simple as that.
As an industry, we have not gotten there. It's interesting
because I was at the ASAE [American Society of Association
Executives Annual Meeting] this year, and we had these
roundtables with meeting planners. Every issue they brought up
- and it didn't matter what it was - came down to one thing.
There was a lack of trust in our industry between the planners
I personally think it's because we don't have a business
dialogue often enough with them to really say, "Here's how we
operate; here are the business reasons of why I'm charging you
more." But we don't help it because every publication in our
industry talks about buyers and sellers. They put us against
each other. It's not what the industry truly is.
ALLISON: We have to understand our customers' challenges,
objectives, what they're doing within the economy, and work
together and have some tough conversations. We need to be able
to share with them what's important to us, and understand
what's important to them, and to have the business conversation
to find a solution for them, whether it's an off-peak period or
a peak period. We need to help drive that conversation and find
a good fit for them.
MASSARI: I'll jump on the vernacular bandwagon here and suggest
also that we don't call it buyers and sellers. I'll offer
another reason why we don't do that. We don't work in an
industry where we do 10 million transactions at $10. We work in
an industry where we do 10 transactions at $1 million each, or
however the math works out. So we position highly talented,
well-compensated salespeople to work with an individual
customer, and we think about that meeting one at a time. We try
to put together a package where the pricing and the overall
package components make sense for that individual meeting
planner and it's a customized solution. I think we all do that,
and I think we all do that very, very well. It's not a buyers'
market or a sellers' market in that situation. It's a
partnership and we sit down with them to figure out, "How I can
get you what you want, and how we can also do that at a price
and an inventory usage that makes sense for me?" And that
doesn't change from January to July. That doesn't change from
'07 to '09.
DOMINGUEZ: I think that one of the tragedies of this recession
has been that we've lost, for lack of a better term, the middle
class of meeting planners and the middle class of suppliers. We
tend to have very senior and very novice, and there's nothing
in the middle, and it screams for a lot more training and
education. From our perspective, I think we have a
responsibility as suppliers to be better partners in educating
the customer - third party or not - educating them about how we
should do it, and this is what is appropriate. That
responsibility, at some point, falls back on us. It's nobody's
fault; it's just that the industry has shifted through this
What I do find is the people who used to teach, they're now too
busy being day traders at the hotel. It's the reality of our
business, but we don't have dedicated people that are mentoring
and teaching daily, and we have so much youth in our industry
right now. I hear it from the planners, and my comment to them
always is: We see the same thing from the planner side. You
know, the planners are talking about the suppliers they're
dealing with. Well, we all have those planners that are
planning a meeting and have never planned one in their life,
and we're trying to educate them. So there's this huge gap, and
I don't know where MPI falls in on that, or PCMA. But I do
think we have a responsibility as a supplier community to start
educating the meeting planning community and educating our
New Sales Channels
Let's talk a little bit about the electronic RFP's [eRFPs] and
the third-party meeting planners. How are they changing the
game - both positively and negatively - and how are you
adapting to this new landscape?
SUKALA: There's a lot of noise out there on both sides. One of
the effects of the rise of the third parties is that it's made
it harder for hotels to communicate to the end-user. Sometimes
there is one, maybe two, possibly three parties involved as
this communication process goes back and forth. So what the
hotels agree to is not necessarily what the clients want. We
try and put our best foot forward with the response to eRFPs
but it seems like you only get one bite at the apple. It's
really hard to come back and offer $10, $15, and $20 lower than
your initial offer, which is usually your best offer.
DOMINGUEZ: I think there are multiple levels because what we're
finding is that the meeting professionals are not the challenge
we have. As I said earlier, there's such a large contingency of
people who are planning meetings that have never planned a
meeting, and they're sending eRFPs out to multiple hotels,
multiple destinations. That's the challenge because we have not
reached out to that community to educate them a little bit. I
tell salespeople all the time: If you're waiting for the lead
to turn into a relationship, you're too late. That's the piece
that's missing in our industry because we have so many people
that are sitting behind their desks and answering phone calls
and answering emails, and think they're building relationships.
BELLO: You need to understand the clients' objectives, their
products, who they're selling to. And then, from that you can
start crafting a meetings solution.
MASSARI: Eric, I think that the whole point is around that
approach. Almost exclusively, customers select facilities
because they believe they have the best chance to achieve their
objectives at that facility. And in the rare case that they
don't, it's generally a mistake.
So the challenge is how we make sure that our salespeople are
uncovering those objectives, and those needs, and those
desires, and what they're trying to achieve from the end user,
and the noise that's in between. So we welcome all the people
in between to the dance. I think if they add value, they're
beneficial to somebody throughout the process, often me.
But we still have to make sure that we're working hard to spend
time with the end user so that we know what they're trying to
accomplish because that's the only way that we're going to earn
the business, and it's certainly the only way that we're going
to get it back.
DOMINGUEZ: As an industry, we have to be a little more
sophisticated about how we approach this because we've trained
the consumer that they live in an on-demand society. So they
can get what they want when they want it and how they want it.
Yet we're trying to tell them: Okay, we want you to buy a
little bit differently. It's not going to work. I mean, we're
trying to educate the planner to say: Can we start with an RFI
[Request for Information] rather than an RFP? So if you're
looking at six different destinations and five hotels, can you
just do rates, dates, and space? Then when we get serious,
we'll go through filling out all the other templates because
that's what takes so much time. Personally, I think we have to
change our marketing models, and start putting some marketing
expenses against it. Do I need to create a lead triage team
that literally is going through these, not junior level, but
going through these leads on a daily basis and knowing I'm
turning down 60 percent of them?
So why not get the 40 percent to my salespeople that actually
need to be working, and I'll take the 60 percent, and offer
them alternate dates, and we'll go working through that? But I
don't need to have my best salespeople turning down leads in a
system that's just time-consuming.
ALLISON: But as demand becomes more constrained, some planners
are just literally blasting out tons of emails to everywhere,
just to get the availabilities so they can quickly get
information back to the people who need to make the decisions.
It becomes who gets to the lead first, and it doesn't help them
narrow their decision and it doesn't help them be smart about
making the decision that will help them achieve their goals.
But we hear more and more about it because there's so much
constrained demand now in the U.S. that it's just a mechanism
for them to get rates, dates, and space.
SUCCESSFUL MEETINGS: How has the emergence of third-party planners changed the way
you do your jobs? Is it a good thing, a bad thing, or both?
MEYER: From our perspective, we listen to all the folks who are
sitting here as well as a wide swath of partners, and we make a
very, very concerted effort to develop the relationship. That
is the way we deploy our sales teams; it is all about putting
the relationship first. That trumps everything.
DOMINGUEZ: When you say good or bad, I think the professional
third parties that are out there, they are out there because
they work very well with us, they partner well, they
communicate, they're transparent. As long as that is what we're
talking about, it's really good. When it gets bad is when we
have third parties, at times, that aren't living up to the
ethical standards that we would expect, or they're not being
transparent with the information. That's when it becomes a
challenge. But the large organizations, I think, are doing it
SUCCESSFUL MEETINGS: Well, let's finish up with some local developments. It's been a
couple of years now since there was a huge influx of new hotel
inventory in the city. How has Las Vegas absorbed that
inventory? What's changed for the better, and what's been more
BRUNELLE: No more hotels rooms are coming online for many
years. That's good.
SUKALA: That's something that does sit in the back of my mind -
that there are a whole lot of potential investors that are
waiting to see what happens in Vegas. There are two projects on
the shelf right now that could put another 70,000 rooms in the
city. So you're always concerned with it.
MEYER: We're at 151,254 rooms right now. I don't think we need
to worry too much about those projects at this point in time.
MASSARI: If these new projects cause us to get better at what
we do, if they cause us to get smarter about who we are and
train our teams better, I'm okay with it. But for now, I'll
echo Fletch's sentiment, that if there were none, I wouldn't be
unhappy about that. All the new projects we went through in the
last few years caused us to get better, and it's competition
that makes all that happen. So if it comes, it comes. If it
doesn't, so be it. But it's the growth in the city that's
caused us all to grow, and get better, and be stronger.
DOMINGUEZ: We just opened up a new international airport
terminal. We're expecting international business to explode. If
all of that happens, we'll need more rooms at some point. Not
overnight, but at some point, and that'll be healthy. I think
the other positive is that there's nothing going to be built
nationally in the group space in North America for the next
couple of years. The pipeline is starting to move, but there's
nothing significant that's going to move the needle. I find
that very encouraging because I think the latest estimates are
2015 when you'll start to see any kind of new development out
ALLISON: The increased inventory also brought new experiences
that we didn't have before to the marketplace that has also
been good for the destination.
BRUNELLE: The only thing that's going to change for the
immediate future is reinvestment in existing product. We just
finished a $70-million remodel of the Bellagio. The Bellagio
Towers actually started in the middle of August. That's another
$40 million reinvested in the rooms and suites there that will
be done in December.
KEENAN: We're reinvesting in our property overall. We're
spending about $160 million on our room renovations. That
doesn't include the casino renovation, a brand-new nightclub,
and the new Brad Garrett Comedy Club. There's just a lot of
stuff going on at the property. So it's really about taking
what you've got and making it better. Fine tuning it based on
MASSARI: Our project is The Linq, which we'll do here between
right down on that drive. You've got the [550-foot
observation] wheel on the back end, you've got restaurant
development, you've got retail development, and you've got more
attractions for people in the destination. All of this
reallocation of capital toward existing assets is good for the
destination overall. You can't just build another tower and
call it a day. You have to be much more thoughtful and much
smarter about it.
ALLISON: We're really reinvesting not only in our inventory
from a room perspective, but we're reinvesting in our meeting
space as well. Sands Expo Convention Center
is getting a
complete facelift that is huge for the destination as well as
for the property. We've also hung our strategy on our
entertainment. We recently announced a production of "Rock of
Ages." So many people come to Las Vegas, time and time again,
and if we don't continue to refresh our entertainment options,
then we kind of take ourselves out of that marketplace. We've
got that new strategy, whether it's limited engagements or
long-term engagements, to try to attract those customers and
keep our product fresh.
DOMINGUEZ: With Mandalay
Bay, we're turning the renovation of
the hotel into a reinvention by rebranding it as a Delano. It's
not just reinvesting in it, it's recreating it, and giving it a
sexy edge that was probably missing with the hotel. That's
really exciting. Then you've got the new Cirque [du Soleil]
show, "The Michael Jackson Immortal Tour" that will be starting
in May, and I think we have an opportunity with that because we
have the MPI World Education Congress here this summer. So
we're going to have an opportunity to be able to showcase the
destination again as far as what's new and what's exciting.