Bigger and bigger, maybe not better

Allen Heath thought a shuttle bus would be the quickest way to get from Circus Circus on the Strip to the International Consumer Electronics Show at the Las Vegas Convention Center.

Midway through a trip that seemed to be taking hours, Heath realized he was wrong.

Fed up with traffic delays, he and some other passengers got off and walked.

“Everybody loves coming to Vegas, no doubt,” said Heath, vice president of business development for a technology company in Denver. “They could make it easier.”

Heath’s experience represents what’s right and wrong with CES, the world’s biggest electronic gadget show and an event worth nearly $233 million to the local economy.

The show is so successful that it attracts as many as 140,000 attendees and draws worldwide attention to Las Vegas.

This week alone “NBC Nightly News” broadcast from the trade-show floor, Microsoft co-founder Bill Gates, General Motors Corp. Chairman Rick Wagoner and leaders of Panasonic, Yahoo and Intel Corp. were among the speakers.

But when organizers from the Consumer Electronics Association and exhibitors from the world’s biggest electronics firms pack up to leave town they do so knowing the lucrative show faces an uncertain future.

In short, CES may be getting too cumbersome and expensive to survive in its current form.

The massive show now covers nearly 2 million square feet of space in the convention center, Sands Expo and Convention Center and Las Vegas Hilton. Rates for even midlevel hotel rooms soar by hundreds of dollars per night during the event and traffic slows to a crawl.

Organizers have scaled back the number of people they allow at the show from a peak of more than 150,000 to the current figure of about 140,000 and plan to reduce it more in years to come.

But those measures may not be enough to ensure the show has a long-term future in Las Vegas, said Gary Shapiro, the Consumer Electronics Association’s president and CEO.

Shapiro cited room rates as the No. 1 threat.

“A show is something that is very ephemeral,” Shapiro said. “If it is perceived as too expensive it goes away.”

Shapiro said the association has never sought to move CES to a new venue. Las Vegas, said Shapiro, is the only location in the country capable of handling the event.

And he envisions committing to hold the show in Las Vegas for another decade or more despite plans to hold smaller, affiliate events in New York and Dubai, United Arab Emirates.

“But CES, the big show, is not leaving Las Vegas,” he said.

A more likely disaster scenario for the show would be what Shapiro calls the “cliff effect.” That’s when a show becomes so bloated and expensive it drives away exhibitors and attendees.

Shapiro cited Comdex, a technology show that attracted as many as 200,000 people at its peak but folded its tents and hasn’t been held in Las Vegas since 2003.

He said that by charging too much for rooms, Las Vegas hotels run the risk of pushing CES toward a similar fate.

“It is just unconscionable to double the cost of a hotel room,” Shapiro said. “I hate to say it, but it is a problem that could be self-correcting.”

But others said the association has the power to achieve lower room rates during CES.

MGM Mirage spokesman Alan Feldman said CEA could get better deals for CES guests by purchasing more rooms in advance.

Feldman, whose company owns 10 resorts on the Strip, said that by boosting the number of rooms it buys in “blocks,” the association would have more purchasing power.

He cited the room blocks purchased by organizers of the Specialty Equipment Market Association, an aftermarket car parts show, as an example.

On its peak night SEMA blocks 16,000 rooms and over the length of the show it reserves about 70,000.

“CES books a very small room block and leaves the market to set the price on most of the rooms,” Feldman said.

Chuck Schwartz of ConvExx, the company that produces SEMA, said securing reasonable room rates is a priority.

“The best thing an organizer can do is block as many rooms as possible,” Schwartz said. “If you go to a car dealer and buy three cars you are probably going to get a better deal than if you just buy one.”

Feldman added that CES attendees are getting a much better experience for their money today than they were in 1978, when the event moved to Las Vegas.

“The attendees at CES are no longer coming to a city with cheap rooms and cheap food,” Feldman said. “They are coming to what is arguably the world’s most dynamic tourist destination.”

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or (702) 477-3861.

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