LVCVA board gets 1st look at $460M budget, expects dip in tax revenue
The Las Vegas Convention and Visitors Authority board of directors got its first detailed look Tuesday at its proposed $460 million fiscal year 2026 budget that will include an expected 5 percent decline in room tax revenue and marketing and advertising expenditures of $168 million.
The spending plan will be the subject of a public hearing and final vote May 20.
President and CEO Steve Hill and LVCVA Chief Financial Officer Jim McIntosh outlined the plan in a 30-minute presentation to the board.
The LVCVA plans to roll out a new marketing plan in the next fiscal year and Hill said most of the advertising will be focused on attracting domestic travelers to the destination.
Although the LVCVA is anticipating getting $346 million in room tax and gaming fees, Hill said there are no plans to dip into the organization’s contingency accounts.
The $32 million special events budget includes $6.5 million dedicated to November’s Formula One Las Vegas Grand Prix, $4 million for the naming rights on Las Vegas Ballpark and $3 million each for the National Finals Rodeo and the College Football Championship game in 2027.
The LVCVA is a rarity among destination marketing organizations because it not only markets the destination but it operates one of three major convention centers in the city. Roughly half the budget is dedicated to the marketing side: 38 percent to marketing and advertising, 9 percent to special events and 3 percent to sales, while the other half is focused on the Convention Center: 21 percent to capital expenses, 14 percent to debt service and 15 percent to operations.
Renovation project
The Las Vegas Convention Center is in the midst of a $600 million renovation that continues to change the look of the front door of the building. The three-year project, which includes work on the North, Central and South halls as well as an indoor corridor connecting all of the venues, is expected to be completed by the end of this year.
Other budget highlights:
— The LVCVA hit its peak in the number of full-time employees in 2020 at 486. When the coronavirus pandemic hit, the workforce was reduced to 378 in 2022. It increased gradually over the years and for the next budget, the employee head count will almost return to prepandemic levels at 480.
— The cost of employees as a percentage of general fund spending was at 14 percent in 2020. After dropping to 12 percent 2022 through 2024, it’s climbing back to 14 percent the next budget projection.
— While the amount anticipated from hotel room taxes is expected to dip by 5 percent from this year to fiscal 2026, revenue from convention sales is expected to climb 16 percent to $78 million, thanks to some major conventions cycling into Las Vegas next year. One of the big ones: the ConExpo-Con/Ag construction equipment trade show that comes to Las Vegas every three years and will be here March 3-7.
— Hill explained that the difference between the marketing and advertising budgets are that the marketing amount pays for internal initiatives and expenses while advertising is contracted to consultant R&R Partners, which arranges ad spending.
— The LVCVA typically budgets very conservatively, Hill said. “We have consistently overperformed our budget, sometimes in terms of revenue, almost always in terms of expenditures, and our ending fund balance is typically somewhat higher than what we projected. We have the ability to be flexible, so we can manage to that end-to-end balance by changing away from the budget that we have put forward.”
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.