CES official defends role of authority

Organizers of the largest and most lucrative trade show in Las Vegas say privatizing Southern Nevada's biggest convention center would be a costly mistake.

Gary Shapiro, president and CEO of the Consumer Electronics Association, said Wednesday many convention exhibitors and attendees are already fed up with high prices in Las Vegas and raising rates to drive profits at the convention center would do the local economy more harm than good.

Shapiro, whose organization runs the International Consumer Electronics Show, was responding to a proposal by leaders of the Sands Expo and Convention Center who say the publicly run Las Vegas Convention Center unfairly uses hotel room taxes to subsidize conventions and trade show.

"They are not subsidizing us," Shapiro said. "We write them a check that is well over seven figures. They are very tough negotiators."

The International Consumer Electronics Show is one of the largest trade show and conventions in the world, the 2008 edition is expected to draw more than 140,000 people to Las Vegas and attracts more media attention in Southern Nevada than a prize fight.

The event is scheduled to run Jan. 7-10 at the convention center and Sands Expo and Convention Center. About 4,500 journalists from around the world are registered to cover the show and NBC plans to broadcast the "NBC Nightly News" live from Las Vegas during the event, Shapiro said.

He credited the Las Vegas Convention and Visitors Authority, the agency that owns and operates the convention center, for leveraging trade shows it hosts into more attention and business for Las Vegas.

"The purpose of the convention center ... is not to earn a profit," Shapiro said. "The purpose is to fill beds, and nobody does it better than (the convention and visitors authority)."

The rising costs of hotel rooms and other services is already making it more difficult for exhibitors and show attendees to justify doing business in Las Vegas, Shapiro said. Potential rate increases at the convention center would exacerbate the problem, he said.

But with Nevada lawmakers considering tax increases to avert a $285 million budget shortfall, the community doesn't have the luxury of operating the convention center as a loss-leader, according to privatization proponents led by executives at Las Vegas Sands Corp., which owns the Sands Expo and Convention Center, The Venetian and the $1.6 billion Palazzo, a Strip resort slated to open this month.

In a recent opinion article in the Review-Journal, Las Vegas Sands President Bill Weidner wrote that convention center rates are about 87 percent lower than those at the privately run Sands and 60 percent less than Mandalay Bay Convention Center, which is owned by MGM Mirage.

"That's a huge, below-market giveaway," Weidner wrote.

Weidner went on to propose privatizing the convention center to create $120 million in annual savings.

On Wednesday, Weidner said it is unfair that taxes from rooms at the privately run hotels go back to the Las Vegas Convention and Visitors Authority, which uses proceeds to run the convention center.

"It bothers me we get pressure on one side for increased taxes but on the other side we have precious value we are giving away," he said. "What an absolute, abject waste."

He said rates at the publicly run center disrupt what should be a free market.

"There is no market discipline and without market discipline you don't get a fair pricing structure," he said.

CES organizers say the publicly run convention center offers better facilities, service and prices than the privately run Sands.

"The public facility cares about parking and loading docks and things like that," said Karen Chupka, senior vice president for events and conferences for the Consumer Electronics Association.

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