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Gaming Guru

Richard N. Velotta
 

Las Vegas is losing its grasp on trade shows

1 November 2015

The warnings are ominous and the stakes are high.

Could Las Vegas lose its status as North America's leading trade-show host?

It seems improbable considering the infrastructure Las Vegas has in place.

The city has three of the 10 largest convention venues in the nation: the Las Vegas Convention Center, the Sands Expo and Convention Center, and the Mandalay Bay Convention Center. Some of the city's smaller convention and trade-show venues are larger than some rivals' best properties.

It has more than 150,000 hotel rooms ranging from deep discount bargains to luxury executive suites.

It has dozens of gourmet dining experiences with the world's most renowned chefs.

It has quality golf courses for convention-based tournaments and entertainment galore with Vegas acts that free-lance special appearances at shows or Strip attractions and events that serve as perks for companies trying to impress their best clients.

One of Southern Nevada's best amenities is one that locals don't often consider — McCarran International Airport, the nation's ninth busiest, is less than five miles away from those convention centers and most of those hotel rooms.

Yet five trade-show industry leaders say Las Vegas' reign as convention king could be over if it doesn't deliver on the Las Vegas Convention and Visitors Authority's promise of expanding and overhauling the existing 3.2 million-square-foot Las Vegas Convention Center campus.

It's a program that has been on the drawing board since 2006 when the LVCVA's board of directors created a Master Plan Expansion Program to address refurbishing the tired facility and building new amenities to expand and modernize its assets.

Although the LVCVA looks to invest $2.3 billion in the plan, that may not even be enough.

And to top it off, officials with Las Vegas Sands, owners of the Sands Expo Center as well as The Venetian Las Vegas and Palazzo Resort Hotel Casino, made it clear they plan to oppose the public funding of the project because they believe government funds should not be used to build something that they, in essence, would be competing against.

Leaving Las Vegas?

Would events like the Consumer Electronics Show, ConExpo-Con/Agg, the National Association of Broadcasters, ReCon and MAGIC abandon Las Vegas for another city?

Consider these recent events:

-- Tim McGuinness, staff vice president of global trade expositions for the International Council of Shopping Centers, said his 24-member board met in Denver to consider leaving Las Vegas and voted 23-1 to explore options in Chicago or Orlando. When the local tourism community heard about that, alarms were sounded and top-level meetings commenced. When the LVCVA committed to what it's now calling its Las Vegas Convention Center District Master Plan, the ICSC decided to give the city another chance, signing a three-year extension to keep ReCon in Las Vegas.

-- The Consumer Electronics Show has disclosed that for the first time in its history it's going to cap the number of people it will register for CES in January. Karen Chupka, senior vice president of the International Consumer Electronics Show, said the show is looking to keep attendance at between 150,000 and 170,000. There were 176,000 who attended the 2015 show and CES has been growing at a rate of between 7 percent and 11 percent a year. CES also tested the waters in Asia, staging its first CES show in Shanghai earlier this year. It drew 28,000 attendees and hundreds of exhibitors who have never attended the Las Vegas show.

-- Megan Tanel, vice president of exhibitions and events at the Association of Equipment Manufacturers which produces ConExpo-Con/Agg in Las Vegas every three years, said her show has made a conscious decision to stay within the Las Vegas Convention Center footprint. "We wanted to keep everything in once place," she said in a recent interview. But as of October, the show is 1 million square feet in exhibit sales ahead of where it was at the same time as the last cycle. The show is scheduled in March 2017 and leaders are counting on the LVCVA demolishing the Riviera site and preparing its 26 acres for outdoor exhibits for event.

-- The National Association of Broadcasters has become one of Las Vegas' best technology shows as the industry stretches the boundaries of delivering content to consumers beyond traditional broadcasting. Chris Brown, executive vice president of conventions and business operations for NAB, noted that the association is comprised of a wide variety technical professionals that meet when the show is conducted in Las Vegas every spring. Those professionals have their own associations and conduct their own meetings during NAB -- and the Las Vegas Convention Center is woefully inadequate for the number of meeting rooms they need. The association also has conducted general sessions in the Westgate hotel because exhibits are overflowing the Convention Center's exhibit halls.

Brown added that more and more conventions are streaming their events to members who can't attend, but the Convention Center doesn't have the technical infrastructure to do that readily.

-- The Men's Apparel Guild in California — MAGIC — a fashion trade show that sets up twice a year in Las Vegas, in February and August, is split over two venues, the Convention Center and the Mandalay Bay Convention Center. Tony Calanca, executive vice president of exhibitions for UBM-Advanstar, which produces MAGIC, said his group spends close to seven figures on transportation, moving people from the hotels to the convention centers and between the two convention venues. Because of the heavy traffic, when conventioneers move from venue to venue, they lose 45 minutes per commute — valuable time taken away from potential deal-making and sales. The lengthy convention center commute has catapulted discussions of extending the Las Vegas Monorail line south to Mandalay Bay. It also generated a conversation about commuting between venues with helicopters, but the idea was abandoned because there weren't enough large helicopters available to make the runs. Even now, CES and MAGIC hired buses from California and Arizona to help with transportation. "Las Vegas does it better than pretty much anybody we work with in the states, but still, this has become an issue," Calanca said. "The biggest complaint I get is, 'Can't you get us into one building?'"

The reality of MAGIC's situation is there aren't too many buildings large enough. Calanca concurs that McCormick Place, the nation's largest convention facility in Chicago, "would be close-ish."

A booked calendar

The trade show executives also point out that there are dozens of big shows that would love to stage their events in Las Vegas, but can't because every big-venue calendar is filled.

Chupka and Tanel said they had a casual conversation with other trade-show managers at a recent meeting. Those shows can't book in Las Vegas in 2017 or 2018 because existing venues are full.

"We aren't even talking about expanding," Tanel said. "They're upset because they can't be in Vegas. And we're talking about 300,000- and 500,000-square-feet shows, so it's big business."

All the show executives have hyped the benefits of Las Vegas to colleagues and some of them even have similar shows in other fields that have been trying to get convention dates. Conventions staged in Las Vegas generally generate up to 10 percent more attendance than they can in other cities simply because attendees enjoy coming to the city.

While other cities are targeting Las Vegas for the business and eagerly point out the city's flaws when making their pitches, others are getting into the competition for other reasons.

Now that the world is smaller and international travel is not the adventure it once was, venues like the National Exhibition and Convention Center in Shanghai could become a reasonable option to host big conventions and trade shows. Opened in July 2011, the facility has 4.8 million square feet of buildings. It also has 1.3 million square feet of indoor and 328,000 square feet of outdoor exhibition venues and 984,000 square feet of comprehensive supporting facilities.

"I don't know of anyone who's not traveling more internationally to conduct business," Chupka said.

Tanel and her group have considered the possibility of Chinese or German interests acquiring property in the desert to build a big-enough facility to accommodate ConExpo-Con/Agg's future needs. But why wouldn't they just build something in their own countries and steal the business away from Las Vegas instead? It's a concern that the five trade-show leaders outlined to the 11-member Southern Nevada Tourism Infrastructure Committee last month.

The committee is gathering information on Southern Nevada's infrastructure needs and the convention center piece is one of five under study by the state's economic development office.

Voice of opposition

At that Oct. 22 meeting, the first hint of opposition to funding Convention Center improvements was voiced by George Markantonis, president and chief operating officer of The Venetian and Palazzo and a member of the committee.

Las Vegas Sands has a history of opposition to the use of public money for LVCVA projects.

In September 1999, former president and chief operating officer William Weidner issued a statement on behalf of the company that the LVCVA had outlived its usefulness and called for it to be disbanded. At the time, Las Vegas Sands and the LVCVA were embroiled in a lawsuit, preventing the LVCVA's president and CEO at the time, Manny Cortez — father of former Attorney General and U.S. Senate candidate Catherine Cortez Masto — from defending itself.

Ultimately, the two sides found common ground in a settlement but the philosophical rift remains. Markantonis at one time served on the LVCVA board of directors, stepping down in July and allowing Wynn and Encore President Maurice Wooden to fill his position.

How that will play out in the LVCVA's efforts to get state help to make the improvements it wants is unclear. But if the project doesn't happen, it could send a signal that the city isn't up to the task.

"It would be very easy not to do anything," McGuiness said. "If this doesn't happen, what's the risk?"

"Las Vegas didn't get to where it is by saying, 'Let's do just enough. Let's just be good enough to retread what we have,'" Calanca added. "You don't want to build your church for Easter Sunday, but if you can't get people here, they're going to find another way to get to market. When that business starts leaking off, not only is it bad for my business, but it's bad for the host city as well."
Las Vegas is losing its grasp on trade shows is republished from CasinoVendors.com.