Revenue from room taxes shows signs of improvement

New numbers from the Las Vegas Convention and Visitors Authority show improvements in room-tax revenue in recent months, but the room-tax income that finances the agency remains down substantially for the fiscal year.

The numbers, which the agency disclosed at its Tuesday board meeting, show that gross room-tax revenue came in at $14.9 million in April, up 4.2 percent when compared with $14.3 million in April 2009.

That's on top of gains in March, when room-tax revenue increased to $14.3 million. That's a 2.5 percent improvement from $13.9 million in the same month a year earlier.

Contrast those figures with the declines in room revenue a year ago: In June 2009, room-tax income slid 31.7 percent; the falloff was 21 percent in July 2009. Room-tax revenue continued to drop by double-digit percentages through November. Since then, it's increased in three out of five months.

"We're certainly not recovering, but a parachute has opened. We're no longer plummeting down to Earth and crashing," said Brenda Siddall, the authority's vice president of finance, after the board meeting. "It's great that we're not seeing the continual spiraling-down, but we certainly haven't begun to see recovery."

Siddall credited the recent room-tax leveling-off to year-over-year comparisons. With 20 percent and 30 percent drops a year ago, 2010's numbers were bound to look better, she said.

But the market has a long way to go before it restores its prerecession room-tax revenue. Southern Nevada took in $20.4 million in room-tax income in April 2008, before the downturn was in full gear. That's more than $5 million above the most recent April's total.

Expect room-tax revenue to perform unevenly in coming months, with some periods showing small gains and others posting declines.

In the fiscal year to date, revenue was down 14.4 percent compared with revenue in the same period a year earlier. The authority has budgeted for the smaller income, Siddall said.

Southern Nevada's average daily room rate also crept up in April, to $77.72. That's a gain of 4.2 percent when compared with the $74.61 average in April 2009. The rate for fiscal 2010 averaged $70.33 through April, down 13.1 percent from $80.91 in the same period a year earlier, the authority reported.

The fiscal year's overall occupancy rate dipped to 78.6 percent, down from 82 percent in the same period a year earlier. At least some of the dip comes from bigger room inventories, with CityCenter adding about 6,000 rooms for a marketwide total of nearly 150,000 rooms.

Tuesday's meeting was also the first for new board member Matthew Crosson. Crosson, who took over as president and chief executive officer of the Las Vegas Chamber of Commerce on April 26, also took former chamber head Kara Kelley's seat on the authority's board.

Crosson, who moved to Las Vegas from Long Island, N.Y., said he watched the authority's advertising campaigns from afar, and it was clear to him before he relocated that the group has done an "extraordinary job" marketing the Las Vegas brand.

"I'm very interested in participating in that," Crosson said after the meeting. "I think what happens here will be key to the short-term economic recovery of the area, but I think this board can also be instrumental in the long-term economic changes that are necessary as well."

Crosson helped Long Island redevelop and diversify its economy after the region lost 100,000 jobs to defense-industry downsizing, and he said he'd like to help Southern Nevada's economy rebuild with less of a reliance on the construction and gaming jobs that dominated the area's labor markets before the recession.

The authority's board also approved a fiscal 2011 contract on insurance for its facilities, which include the Las Vegas Convention Center and Cashman Convention Center.

The contract, with FM Global, will cost $951,961. That's $96,025 less than fiscal 2010's premium. Property insurance coverage will rise to $500 million, up from $400 million in fiscal 2010.

FM Global also insures resorts belonging to MGM Resorts International, Boyd Gaming Corp. and Wynn Resorts Ltd.

Contact reporter Jennifer Robison at jrobison
@reviewjournal.com or 702-380-4512.