Convention Center Expansion Planned To Stoke Visitor Counts

12 January 2005

By Chris Jones

Despite unveiling a highly detailed growth strategy that will power this city's travel and trade show industries through the next five years and beyond, the leader of the Las Vegas Convention and Visitors Authority said this city's message to would-be rivals remains remarkably simple.

"We're number one, and we're going to stay number one," Rossi Ralenkotter, the convention authority's president and chief executive officer, said following Tuesday's board meeting at Cashman Center.

With an eye on increasing local visitor counts from last year's record 37 million to approximately 43 million per year by 2009, the convention authority will soon launch a $400 million expansion and renovation of the Las Vegas Convention Center while more aggressively marketing toward potential U.S. and international visitors.

"We need to make decisions today that make sure we're successful in the future, for the next five, 10, 25 years -- even for the next 100 years," Ralenkotter said of Las Vegas' stake in the $1.18 trillion U.S. travel industry.

"For the first time since 9-11, we're seeing a rebound in the number of visitors traveling ... and we need to make sure we maintain our share of that," he added.

The Las Vegas area ended 2004 with approximately 131,500 hotel and motel rooms, a figure that will approach 151,000 by 2010 thanks to the debut of Wynn Las Vegas, The Venetian's sister Palazzo resort and other expected hotel projects. Another 6,300 time share/condominium units are also planned. Therefore, Las Vegas must over the next five years increase its visitor count by 1 million per year to maintain citywide occupancy rates in the mid- to upper-80 percent range.

Ralenkotter said business travelers are vital to future growth. Therefore, the authority plans to add several hundred thousand square feet of space to the nearly 46-year-old Las Vegas Convention Center. Plans call for a new grand entryway; second- and third-floor meeting rooms; more walkways within the complex; and an enclosed passageway linking the Las Vegas Monorail station to the center's South Hall.

The convention authority's administrative offices and engineering department would also be moved to a new stand-alone building to be built behind the center off Joe W. Brown Drive. Those offices would sit atop a proposed Metropolitan Police Department substation, Ralenkotter said.

Craig Skiem, a consultant with Minneapolis-based advisory firm Conventions, Sports & Leisure International, told the board he'd return in March with detailed plans on the proposed expansion.

Las Vegas in 2003, the latest full-year data available, drew an estimated 5.7 million convention-related travelers who spent more than $6 billion on nongaming goods and services. City leaders hope to expand that total to 7.5 million conventioneers over the next five years.

"Right now, they represent 15 percent of all of our customers; by 2009, that needs to be 20 percent," Ralenkotter said. "The economic impact (of business travelers) ... is something we have to have."

On the leisure side, Las Vegas' key competitors include tribal gaming, particularly casinos based in California; rapidly expanding cruise lines; and resort cities such as San Diego, Miami and New Orleans. Brand building, including the further use of the successful "What happens here, stays here" advertising campaign developed by R&R Partners, will help Las Vegas meet those challenges, Ralenkotter said.

To increase domestic market share, Las Vegas will soon increase its direct marketing efforts in seven key U.S. markets: Atlanta, Boston, Denver, Detroit, Miami, Philadelphia and Seattle. Past promotional efforts in successful feeder markets such as Chicago, Dallas, Houston, Los Angeles, New York, San Diego and San Francisco will continue.

Outside the United States, the authority will for the first time conduct direct-to-consumer marketing campaigns in Canada, Mexico, Japan and the United Kingdom. Promotional efforts using foreign tour agencies will continue in Western Europe, Australia, South America and South Korea and will expand into China, Ralenkotter said. By 2009, he hopes 6.3 million foreign visitors will come to Las Vegas each year, a 29 percent increase from today's total.