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Best of Benjamin Spillman

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Benjamin Spillman
 

Las Vegas visitation numbers tumble

12 May 2008

LAS VEGAS, Nevada -- The number of people who visited Las Vegas in March fell 1 percent to about 3.4 million, prompting resort operators to lower hotel rates to keep rooms full.

On Friday, the Las Vegas Convention and Visitors Authority reported March visitation figures that showed declines in rates, occupancy and overall number of visitors.

In addition to the tourism decline, convention attendance fell to about 638,000, nearly a 7 percent decline compared to March 2007.

The average daily room rate fell about 1 percent to $135 and occupancy fell almost 2 points to 92 percent. The addition of nearly 4,000 hotel rooms to the market since last March likely influenced the occupancy rate.

"We are being impacted by the national economy," said Kevin Bagger, director of Internet marketing and research for the authority.

The convention decrease came despite Las Vegas hosting one of the largest trade show events in its history, the ConExpo-Con/Agg construction show. That event, held once every three years, boosted convention attendance by about 150,000 people.

Even after subtracting more than 60,000 people who attended shows that were shifted to February because of ConExpo, the event was still a net positive for the month.

Bagger said much of the decline in convention attendance was due to a dip in the number of smaller events.

The overall number of conventions, which are mostly small, fell 16 percent even though the big construction show set an attendance record.

"There is sort of mixed feelings in the marketplace, in the economy," he said.

Convention business is especially important to Las Vegas because a typical trade show attendee spends about $1,500 during a visit, not counting gambling losses. That's about twice as much as a typical tourist, according to the authority.

Passenger traffic at McCarran International Airport declined almost 2 percent but daily automobile traffic on Interstate 15 from Southern California increased by the same amount.

In a recent interview, Brian Gordon, a principal at the research firm Applied Analysis, said resort companies are struggling to cope with the impact of high fuel prices and a down economy.

"Many of the operators are witnessing new lows they haven't seen in quite some time," said Gordon, whose monthly analysis of gambling companies' stock prices showed declines at eight of 10 companies in April. "Nobody is immune. Those that are able to react quickly and remain efficient will continue to succeed."