April 1, 2020 - 4:15 pm
Updated April 1, 2020 - 4:23 pm
The Las Vegas Convention and Visitors Authority is canceling its two-year contracts with 14 international offices that market the city abroad.
The international representative office contracts were set to expire June 30, and the LVCVA was on the verge of considering two-year renewals on them when the coronavirus outbreak hit hard, leading to the closure of nonessential businesses in Nevada, including all resorts and casinos.
“Due to the limited accessibility from the global markets, the LVCVA is going to be managing our international efforts, effective April 18, and we did cancel our current contracts that were set to expire at the end of our fiscal year with our international markets,” said Lori Nelson-Kraft, LVCVA senior vice president of communication and government affairs.
Through sales and marketing services, trade show representation, public relations, digital marketing and website support, the contracted offices on five continents have driven visitors to Las Vegas from outside the United States.
The LVCVA board of directors unanimously approved its latest contracts in May 2018 and two additional offices were added later.
The convention authority launched a comprehensive international initiative in 2008. Since then, international visitation to Las Vegas has increased from 4 million people in 2008 to 6.7 million in 2017.
Move expected to be temporary
Nelson-Kraft said canceling the contracts makes sense because many of the offices had virus mitigation limitations similar to those in the United States and international air travel has been limited and discouraged worldwide.
Working without international office support is expected to be temporary, Nelson-Kraft said. For now, marketing efforts will be performed by staff in Las Vegas, she said.
“We remain committed to our global footprint of selling and marketing the destination and we will, for now, continue to monitor the activity in our international markets and we plan to expand our sales and marketing efforts based on the market recovery and travel ability,” she said.
The international contracts were costing the LVCVA an estimated $2.4 million a year. Annual fees at each office ranged from $72,000 to $388,800 a year.
Several of the offices served multiple markets. For example, an office in Shanghai provided marketing support for China, Hong Kong and Taiwan. The LVCVA had two offices in London, one marketing to Great Britain and the other to Europe using digital and social media platforms.
LVCVA-contracted offices also were located in Sao Paulo; Mexico City; Paris; Bejing; Toronto; Sydney; Seoul, South Korea; Munich; Dublin; Aarhus, Denmark; and Milan.
An industry analyst thinks the LVCVA is making the right choice in canceling the contracts.
“The LVCVA is probably going to be one of the government entities that’s hit hardest because you have the government funding that’s basically come to a standstill and your ability to get people, especially in an international sense, is severely restricted at best, if not cut off,” said Brendan Bussmann, director of government affairs for Las Vegas-based Global Market Advisors, LLC.
“It’s probably the prudent decision at this point to do that and figure out as things settle how best to ramp back up and in what fashion,” he said.
The Nevada Commission on Tourism, which uses a similar but smaller international office business model, hasn’t terminated its contracts.
“We have not canceled our contracts,” spokeswoman Bethany Drysdale said in an email, “but all cost-savings ideas are on the table.”