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Rod Smith

Trade Show Business Thriving

25 November 2003

Convention center insiders and Wall Street analysts are bullish about business in December and the 2004 first quarter despite storm clouds being reported on the horizon.

Deutsche Bank analyst Marc Falcone said December appears stable despite being a traditionally slow period, and 2004 is shaping up to be a "breakaway year" for convention business in Las Vegas.

In the same vein, Richard Heller, president of the Sands Expo and Convention Center, said on Monday that December revenues should be stable compared with last year, but the first quarter will get a boost from the addition of at least three major trade shows.

A UBS Warburg study in November warned about a drop in the number of large conventions and dwindling attendance at major meetings toward the end of this year.

Previously, a study by Fulcrum Global Partners, an independent Wall Street investment research firm, had reported that a strong convention schedule should translate into a big fourth quarter for Las Vegas casino operators.

The latest analysis by Fulcrum shows there are no major events, those with 1,000 attendees or more, scheduled for mid-December, although there were none last year, either.

In an alert to investors, however, Fulcrum gaming analyst Joe Greff said there are "notable shows" scheduled for the same period, including appearances by Kenny Rogers, Shania Twain and Mariah Carey. "While these are undoubtedly big-name acts, they likely won't move the needle much in terms of overall room rates in the absence of significant convention activity," Greff said.

Kevin Bagger, research director at the Las Vegas Convention and Visitors Authority, said reports from major investment houses are vulnerable to missing trends because they focus only on meetings projecting 15,000 attendees or more.

Of the 5.5 million attendees at meetings and conventions in Las Vegas in 2002, about half came for shows of 500 participants or fewer, and another 25 percent came for meetings ranging in size from 500 to 15,000.

It's easier to track attendance at major conventions, Bagger said, and the scheduling of smaller meetings tends to be more volatile.

At Deutsche Bank, Falcone agreed and said smaller meetings scheduled on a spot basis have been picking up any slack between major conventions.

He projected more than 150,000 attendees at major meetings in the first two weeks of January.

Heller said the first quarter looks particularly strong, including meetings of IBM, the Video Software Dealers Association and an adult Internet trade show.

"We're packed for next year (at least) through March or early April," he said.

The Internext Las Vegas Expo 2004, the first convention set for the Sands next year, reports advanced registration is up by 32 percent compared with last year when it had 5,000 attendees.

Heller also said Las Vegas is doing better in attracting added convention business than any other market in the United States.

"We're gaining business from other cities like Global Shop and the Hardware Show, both of which had been in Chicago for many years. Las Vegas as a destination is still a place people want to come to and shows here see a boost in attendance and a boost in booths sold," Heller said.