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Best of Benjamin Spillman

Gaming Guru

Benjamin Spillman
 

LVCVA approves reduced budget

22 May 2009

LAS VEGAS, Nevada –- Las Vegas' tourism boosters on Thursday approved a $231 million budget for the 2010 fiscal year, one that's 17.3 percent lower than the budget presented this time last year.

The cutbacks by the Las Vegas Convention and Visitors Authority are the result of a national recession that's lowered the price of hotel rooms here more than 25 percent since the last budget presentation. Nearly 80 percent of the authority budget comes from room taxes in Southern Nevada.

The unanimous approval of the budget by the authority board followed a brief public hearing that didn't draw any comments from the small audience.

"Fiscal year 2009 was unprecedented," said Brenda Siddall, the authority's vice president of finance. "But we managed it by being fiscally conservative and prudent."

The upcoming budget continues a hiring freeze that has left 50 open positions unfilled and includes savings from the suspension of an $890 million renovation of the Las Vegas Convention Center.

"We'll maintain the flexibility to adjust expenditures," Siddall said.

Under the new budget, the authority assumes room rates will average $80 through the upcoming 12 months, a decrease of less than 1 percent from the 2009 fiscal year.

But compared to the rates of early 2008 the current projection represents a decrease of about 40 percent.

Siddall said the best way to put the budget into context is to compare it to 2005, the last time it was at the current level.

In addition to declines in room rates, Siddall expects revenue from operating the convention center to stagnate -- despite a rate increase from 25 to 29 cents per net square foot that's set to go into effect in July.

She projects $42 million in revenue from the convention center and $1.5 million from the Cashman Center downtown in 2009, decreases of 17.3 and 34.2 percent, respectively.

In 2010 she projects convention center revenue to rebound to $44.2 million, which would be 5.2 percent better than 2009 but still a regression to near 2007 levels.

The rate increase is offset by declining revenue from concessions, catering, parking and electrical and telecommunications commissions as exhibitors cut back on services to save money.

Las Vegas Mayor and authority board Chairman Oscar Goodman said the falling budget represents the financial reality of the economy. Goodman says he thinks visitation levels are stabilizing, but that still doesn't mean it's wise to expect revenue to increase anytime soon.

"I applaud Ms. Siddall for being very conservative in this report," Goodman said. "There are a lot of people (in Las Vegas) now; I understand they may not be spending as much as they have in the past."