Las Vegas Convention Numbers Down

LAS VEGAS -- A drop in the number of large conventions and dwindling attendance at major meetings toward the end of this year will hurt at least two major gaming operators, a new report from UBS Warburg says.

The report, released to investors last week, rebuts earlier reports by Merrill Lynch and Fulcrum Global Partners that showed convention business in Las Vegas is up from 5 percent to 10 percent through the first three quarters of the year.

The newest UBS Las Vegas Convention Outlook, which tracks expectations for convention bookings, showed attendance at large conventions will drop 10 percent in the fourth quarter of 2003 compared with the same period a year earlier.

Mandalay Resort Group, operator of the Mandalay Convention Center, is expected to fare the best, the report showed.

But Park Place Entertainment Corp. appears to be getting little support from conventions in November following a strong month in October. MGM Mirage properties valleywide are experiencing a downturn in such business in November, the UBS study found.

Las Vegas will host nine conventions with more than 15,000 attendees in the fourth quarter compared with 11 such major conventions a year earlier.

However, total attendance looks lower year-over-year than just the number of conventions would suggest, UBS analyst Robin Farley said.

That is because Las Vegas in the fourth quarter will have a net loss of rotating large conventions despite wooing a number of major conventions away from other destination cities, she said.

"Some conventions are held in the same city every year, but others rotate among several cities. In the fourth quarter, it appears that LV lost more large conventions to a rotating schedule than it gained," Farley said.

The GSE International Expo (16,000), International Sanitary Supply Association (17,000), Wireless IT and Internet (20,000), Lighting Dimension International (15,000) and World Gaming Congress & Expo (28,000) were all held in Las Vegas in the fourth quarter of 2002, but are not being held here this year, UBS reported.

In this year's fourth quarter, roughly 505,000 attendees are expected at these large conventions, down about 10 percent compared with 2002.

Las Vegas Convention and Visitors Authority spokeswoman Erika Brandvik warned it is erroneous to look only at major conventions because the contribution of smaller meetings to the local visitor count is vital.

"Recently, our research methodology has been adjusted to reflect smaller meetings because they have a very significant impact," she said.

Including such smaller conventions, Brandvik said the number of attendees at meetings in Las Vegas was up 9 percent through the third quarter and the authority expects to set another annual record before the end of the year.

Joe Greff, gaming analyst at Fulcrum Global Partners, an independent Wall Street investment research firm, said early survey results at his firm indicate attendance should be up even at larger meetings in the fourth quarter 2003 and continuing into the first 2004 quarter.

"Mandalay Bay and The Venetian are getting a lot convention business and starting off (the first of the year) very strong, obviously way up from last year's pace," he said.

The UBS Las Vegas Convention Outlook, which tracks expectations for convention bookings, has shown that while a slowdown in business travel has hurt convention attendance in general, Las Vegas has been able to grow by stealing share from other cities. It is the only segment of Las Vegas visitation that has grown since 2000.