High tech in low spirit

The last time the International Consumer Electronics Show opened in a recession this deep, pocket calculators, bar codes and rudimentary word processors were cutting-edge technology.

How the current recession -- the worst since 1974, according to some recent national unemployment numbers -- affects the 2009 edition of North America's biggest gadget show remains to be seen.

Indicators to measure the success of CES, which opens Thursday, are mixed.

Organizers at the Consumer Electronics Association say preregistration numbers are similar to 2008 when about 142,000 people attended the event.

The 2009 show also boasts about 300 new exhibitors, including mobile telecommunications giant Verizon Wireless, and CES could get another boost from an announcement that Apple Inc. founder Steve Jobs won't be participating in the competing Macworld show in California.

In addition, NBC "Nightly News" and the popular game show "Jeopardy!" will film segments at CES, a reflection of a stronger presence by NBC Universal and the broadening of the show to include not just gadgets but content producers seeking to capitalize on technology on display.

"I know the story of the day is the recession has killed everything, and it is just not true," said consumer Electronics Association President and Chief Executive Officer Gary Shapiro.

But other indicators, such as exhibitor attendance projections, hotel room rates and commercial air capacity into Las Vegas suggest there will be fewer people here for the four-day event.

Shapiro says the amount of leased exhibit space fell 5.6 percent to about 1.7 million net square feet, compared to 1.8 million for the 2008 show.

"Being down under 10 percent in this economy is a huge accomplishment," Shapiro said.

The fate of the 2009 edition of CES is critical to Las Vegas, which is suffering from the worst recession in recent memory.

Visitation has dipped by double-digit percentages in recent months. And although the post Sept. 11 recession lasted as long as 15 months, by some indicators, the current recession has included bigger sustained declines in categories such as air traffic.

That means CES, an annual boon for everyone from valets to strippers, is more important than ever.

Last year, the event was worth an estimated $233 million in local spending, in addition to whatever the attendees lost while gambling.

"Times have definitely changed," said Michael Zaletel, who runs the hotel-booking Web site www.i4vegas.com.

Zaletel compared available hotel rates for 2009 CES to rates from the past 10 years.

His findings show rates are down significantly, which suggests demand is off.

The surprising news, however, is that the decline dates back a few years.

In fact, rates for 2009 are 30 percent lower than they were in 2006, the last time CES coincided with a weekend.

Zaletel said the past two years in which the strongest demand for CES rooms fell on Mondays and Tuesdays aren't perfect comparisons for 2009 because there was less competition with tourists for rooms early in the week.

In 2009, the average daily room rate for the strongest-demand days of CES is $106. In 2008 it was $105. In 2006, it was $152.

"In January of 2008 and again in January of 2009, the rates on i4vegas for the night before the first day of CES and the night before the last day of CES are essentially no higher than they would be if CES wasn't even in town," Zaletel said.

Another trend that appears to predate the worst of the current recession is lengths of stays during the event.

Zaletel said in the 1990s hotels were able to require guests to book minimum five-night stays during CES.

By 2004, it appeared many CES attendees were spending just three nights, according to i4Vegas.com.

In the past couple of years, Zaletel said the duration of peak demand during CES has shrunk even more.

"Even with the economy at full swing, CES started turning into a (two)-night convention. People started flying in early on the first day of the convention and leaving a day early," he said via e-mail.

As recently as Dec. 31, the i4Vegas site had rooms available during CES at 74 hotels.

"I guess all the good news is in favor of the convention attendees for CES 2009," he said. "However, I am hopeful that consumers and conventioneers will realize that Las Vegas is once again affordable in January and everything will be sold out by January 8th."

The reason for lower rates could be because companies are wary of sending too many people to CES.

The event has grown from a gadget show to a multimedia event that includes celebrities, Hollywood film industry companies and as many parties as meetings.

As budgets tighten, technology companies are working to limit attendance to employees who are going to make deals, not just rubberneck.

"It has gotten smaller," said Pioneer Electronics spokesman Jaed Arzadon of the company's CES delegation. "We are not sending as many people from our corporate office in Japan."

Although Las Vegas workers want to welcome as many people as possible to CES, organizers at the CEA are working to make it more of an exclusive event.

Attendance peaked several years ago at around 150,000 people and Shapiro and others decided it was time to reduce the crowds. They feared the event getting so big it would become too expensive and unwieldy to manage or navigate.

Unfocused growth helped kill Comdex, another technology show once held in Las Vegas that attracted as many as 200,000 people before it folded after the 2003 event.

"We determined it was too much, it strained Las Vegas, it raised the price of hotel rooms," Shapiro said.

However, as Las Vegas adds more hotel rooms in venues such as City Center, M Resort, Fontainebleu and other developments, CES may work to push attendance higher, he said.

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