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Las Vegas Optimistic on Convention Possibilities

LAS VEGAS --With the opening this week of the 1.8 million-square-foot Mandalay Bay Convention Center, Las Vegas will have more than 9 million square feet of convention space -- further burnishing its image as one of the nation's top destinations for business meetings.

Still, convention revenues account for less than 15 percent of the region's tourism business.

Las Vegas tourism chiefs say they want to increase that percentage to as much as 25 percent over the next couple of years -- a feat that could be possible through the addition of about 1 million square feet of meeting space and as many as 4,000 hotel rooms to accommodate business travelers.

"This is a partnership," said Manuel Cortez, president and chief executive officer of the Las Vegas Convention and Visitors Authority, an agency that promotes the city's resort industry and funnels business leads to convention centers and hotel meeting planners.

"We are able to attract new business because we have new space and hotel rooms," said Cortez, who addressed dozens of casino managers and other industry insiders at the American Gaming Summit in Las Vegas Thursday.

Convention-goers generated about $4.8 billion in non-gambling revenue for the local economy in 2001, up from $4.3 billion in 2000, the LVCVA reported. Last year's figures aren't yet available and the agency hasn't offered a forecast for this year.

Casinos have historically used conventions to fill hotel rooms during periods when tourism was slow. In recent years, however, operators have used group business meetings to increase overall demand for rooms, which drives up hotel rates, summit speakers said.

That's because Las Vegas has grown into a coveted destination for convention-goers, who typically spend more money and time in town than tourists on pleasure trips, the LVCVA said. Conventions in Las Vegas typically have higher attendance rates than the same shows in other cities, it has found.

New convention space will attract more visitors rather than cannibalize business from existing hotels, Cortez said.

The city continues to attract new shows from other cities, such as the Promotional Products Association International show, which will come to Mandalay Bay's convention center next week after 26 years in Dallas.

Also, more than 70 percent of meeting attendees return to Las Vegas each year -- a sign that people who travel for business come back for pleasure, he said.

While the LVCVA does examine a group's "gaming profile" -- the propensity of members to gamble -- it also passes on leads for groups that may not fit that category.

The city continues to attract groups that have refused Las Vegas before, including conservative religious and medical associations that dislike gambling, said Patty Shock, chair of the Tourism and Convention Department of the William F. Harrah College of Hotel Administration at UNLV.

"Our research indicates that people now come here who wouldn't have before because there are so many other things to do," Cortez added. "But there are still a lot of people out there who haven't been to Las Vegas yet."

The outlook on the Las Vegas casino industry offered up by summit panelists was upbeat Thursday despite several storm clouds on the horizon.

Wednesday, shares of Las Vegas casino companies plummeted 10 percent or more over lower earnings warnings by Mandalay Resort Group and MGM MIRAGE.

The companies cited lower-than-usual results over the holidays and pointed to more positive developments in the coming year. Still, some analysts believe that the economic troubles that have hit other business sectors have finally caught up with Las Vegas' powerhouse resort industry, which largely depends on consumers' disposable income.

Frank Fahrenkopf, president and chief executive of the American Gaming Association, the industry's chief lobbying arm, called the drop an "aberration" and said gambling's mecca is still holding strong amid a tough economy.

"The proven markets are still doing very well," he said.

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