Despite MGM Mirage's insistence that its mid-April slashing of 400 managers was a planned move to cut costs and trim fat, many interpreted the layoffs as the biggest sign yet that mighty Las Vegas is in a business slump for the first time since post-9/11. But MGM Miragethe biggest gaming resort operator on the Stripand at least one of its competitors, Harrah's Entertainment, were adamant that business remains buoyant, specifically that of meetings, even as leisure travel recoils from the deepening downturn in the economy.
"We've always been sensitive in making adjustments in staffing, and we began making some in the last few months," said MGM Mirage spokesman Alan Feldman, reiterating to MeetingNews
what president and COO Jim Murren has described in various reports as a long-term corporate streamlining initiative that began last September. "Everyone's been reacting because of the slowdown."
Aside from the semantics surrounding the MGM Mirage layoffs, there have been signals of a softening Vegas. According to the Nevada Gaming Control Board, the Strip's earnings in the three-month period from December to March fell by nearly 5 percent. Then, an April 15 Las Vegas Review-Journal
report cited that average daily room rates among Strip gaming properties are down by 20 percent. And, passenger traffic numbers at McCarran Airport dropped in December, January, and March. Feldman was quick in dispelling notions that the economy is significantly impacting MGM Mirage's meetings business. However, he did concede that the number of attendees has dipped and the length of their stays has shrunk. And, what consumer belt-tightening has wrought is lower hotel occupancies and hence greater price pressure on guest rooms, as evidenced by lower average daily rates. Even so, opportunistic meeting planners looking to crack the market will likely encounter limited room and meeting space availability.
That's because meeting bookings and current group volumes remain strong, as companies that might've been considering international meetings are bringing programs back domestically because of the weak dollar. And, conversely, Las Vegas is working harder to put more foreign heads in beds as a counter offense to the domestic troubles.
"I don't expect availability will skyrocket, as international leisure business is offsetting the domestic dip a little," said Feldman. "Plus, there's still a lot of group demand. We're able to fill gaps between large groups, and our future bookings remain strong."
At Las Vegas Meetings by Harrah's, VP of sales and operations Michael Massari said there will not be a big market difference from a meetings and conventions standpoint. "Despite the drop in leisure travel, we are running high meeting space occupancies," said Massari. "We are typically out of meeting space before rooms open up."
For his part, Chris Meyer, VP of convention sales for the Las Vegas Convention & Visitors Authority, said several large corporate meetings were moved from the first quarter to later in the year so those companies can meet their quarterly figures. The LVCVA, MGM Mirage, and Harrah's all said they have marketing and promotions at the ready to fight the crunch. "Customers understand the importance of meetings when the economy takes a downturn," noted Feldman. "Now, more than ever, companies need to connect with their customers and their own [employees]."Contact William Ng at [email protected]Originally published May 19, 2008