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Gaming Guru

Richard N. Velotta
 

Advertising Could Get Boost From LVCVA Windfall

26 October 2004

With occupancy of Southern Nevada's resorts up and the average daily room rate increasing, room tax coffers are bulging.

That and the Las Vegas Convention and Visitors Authority's conservative revenue projections have resulted in a financial windfall that will result in budget augmentation adjustments totalling $52 million when the LVCVA's board of directors meets next month.

The LVCVA board's audit committee on Monday recommended approval of an increase in general fund budget appropriations of $18.9 million and capital funds budget appropriations of $33.1 million for the 2005 fiscal year.

That means the LVCVA will be able to spend more for dozens of equipment and project requests that have been put on hold for various reasons and millions of dollars more for advertising.

The 2005 general fund budget originally was $198 million and would be increased to $217 million; the capital funds budget would increase from $8.8 million to $41.9 million. The audit committee's recommendation will be considered by the full LVCVA board at its monthly meeting Nov. 9.

"It's due to increased room tax revenue and savings in spending by the staff," Rossi Ralenkotter, LVCVA president, said.

Brenda Siddall, director of finance for the LVCVA, said the difference between the originally anticipated room tax receipts and the amount considered in the budget augmentation is $14.1 million, one of the largest differentials in the agency's history. Ralenkotter said the increase can be attributed to the strength of the market.

Through August, occupancy rates for all resorts was at 89.4 percent, 3.1 points ahead of the pace in 2003, and the average daily room rate was at $89.02, 8 percent higher than it was in 2003. The LVCVA is projecting visitation of 37 million tourists in 2004, which would break 2000's record total of 35.8 million people.

So what would the LVCVA spend the money on? The biggest chunk -- $9.4 million -- would go toward advertising.

Ralenkotter said the LVCVA will have the challenge of helping fill 8,000 new hotel rooms in Las Vegas next year. In addition, the agency has opened a new office in Mexico City and is working to generate visitation from south of the border. Advertising campaigns also are planned in conjunction with the Las Vegas Centennial celebration next year.

Ralenkotter also said bmi, a British airline that begins nonstop service between Manchester and Las Vegas next week, is looking develop a cooperative advertising program to generate visitation and the LVCVA plans to increase its Internet presence.

Other big-ticket expenditures planned include $288,000 for an Interstate 15 corridor consultant, $200,000 for additional insurance coverage, $100,000 for a welcome sign on Boulder Highway, $400,000 to help cover expenses for the 2005 Arena Football League championship game and several stadium upgrades and baseball field improvements at Cashman Field totalling more than $100,000.