Las Vegas CVB Head Sees Signs of 2010 Growth

Las Vegas Convention and Visitors Authority President and CEO Rossi Ralenkotter this month spoke with MeetingNews senior editor Jay Boehmer to discuss the recently opened $8.5 billion CityCenter, 2010 meetings demand and the impact of recession and perception.

MN: The most recent LVCVA figures show convention attendance declined 26 percent through October.Will that pick up this year?

Rossi Ralenkotter: When the final tabulations are in for 2009, Las Vegas will have attracted about 4.5 million convention attendees. That’s about a 24 percent drop. The total number of conventions and meetings will be around 19,500, which is down about 13.6 percent. As with the rest of our industry, all of us are feeling the impact of the major recession we’ve all been dealing with for this past year. We’re projecting anywhere from a 2 to 5 percent increase in total visitors to Las Vegas for 2010. Our convention calendar is a good one, and we’re hearing the booking pace for corporate meetings, especially for the second half of the year, is very good. We just finished the Consumer Electronics Show, and they reported a 6 percent increase in attendance from last year. That’s a very positive sign as we go into this year. As with everything, it’s going to be dependent upon the recovery cycle of this recession.

MN: Is it safe to say the worst—in terms of meetings demand—is over?

Ralenkotter: We have to be very careful, and there are a couple of indicators we need to look at, and this impacts the leisure side as well as the business side: The consumer confidence index is still hovering around the mid-50s, and we need to see that get back to a level of around 90. The other is the unemployment numbers. We need to watch those very carefully. Even though we’re optimistic as we go into 2010,we still have to continue to monitor the economic indicators as one barometer and do research with our meeting attendees, groups and potential leisure visitors.

We’ve seen a couple of things here in addition to our increase at CES. For September, October and November, we’ve seen three increases in total visitation to Las Vegas, so that’s a positive. We had eight months of increases in auto traffic from Southern California. Last month, we saw a light increase in the number of passengers coming in through our airport.

It’s an optimistic view of 2010, but we have to be very diligent as to how we market and sell. We’ll continue to reach out with person-to-person and face-to-face sales meetings and continue to message our destination as the place to be on the business and leisure side. We’re embarking on another C-suite survey to see if our messaging needs to be adjusted based upon the input from corporate America.

MN: Can you recall a more challenging time than the past 12 months for Las Vegas and the industry as a whole?

Ralenkotter: In March, I’ll be here 37 years, so I’ve seen a variety of things happen in the marketplace, all the way from the energy crisis and crunch from the 70s,where it was as much about supply of gasoline and jet fuel as it was pricing; for us, the legalization of gaming in Atlantic City and other areas; there’s been recessions over this time frame; there was 9/11, the Gulf War. However, I have to say from the length of this recession and the impact that this has had, not only in the tourism industry, but also on the economy of America, this has probably been the most challenging extended period I’ve seen.

In the past, we always used to say that Las Vegas was somewhat recession-proof. That’s not been the case here, because you had economies throughout the world being impacted, and all of us in the United States have been impacted in some way by what has happened in this recession.

MN: Las Vegas was hit doubly in terms of the perception impact. Has that waned?

Ralenkotter: I think it was a misunderstanding of the importance of the meetings, conventions and travel industries to every state and the U.S. as a whole. When you start impacting travel decisions, you impact the most important things we have, which are jobs and job creation. Destinations like Las Vegas that had gaming, a beach or an ocean or had the golfing experience, they were the destinations that some people perceived as not a serious place to do business.

We have to continue to pound that message that travel and business travel is important and critical to the health of the economy for the United States.

We did see cancellations happen in the first quarter of last year with the AIG effect and the TARP stuff. That has subsided, but we still have to talk about the fact that business is done in our city. Despite all the impacts of the economy, we still will run about 81 percent occupancy for Las Vegas for 2009. Our visitor counts will be down, but they’ll be down by single digits—approximately 3 percent. Now, the spend isn’t there, the average daily rate isn’t there, but it shows the strength of our brand. The fact that the MGM Mirage people in the midst of this recession went forward with an $8.5 billion complex in December points to the strength of our brand, the confidence that corporate America has and MGM has in the future success of Las Vegas.

MN: It seems like a tough time for CityCenter to add 6,000 hotel rooms, or 4 percent, to your room supply. Does that further skew the supply and demand equation?

Ralenkotter: That gives us about 150,000 rooms in the destination. Traditionally, we’ve seen an increase in visitation whenever we add new product, when new resorts open. That’s one of the reasons we’re projecting a 2 to 5 percent increase in visitation overall in 2010. Even though a lot of people want to come to a new property and stay at a new property, a lot of other people will plan a trip to Las Vegas so they can see CityCenter. I know they’ve been very aggressive in going after the corporate meeting business. Bill McBeath, who is COO of CityCenter Aria, made a presentation to our board at our December meeting, and he talked about when his previous hotel, the Bellagio, opened it increased visitation to other properties as well as to Las Vegas. In the midst of this economic challenge, having new product come online is very important for our brand.

MN: So you think it actually will stimulate demand?

Ralenkotter: Yes, and we’ve seen that time and time again.

Originally published Jan. 25, 2010