Signs go south for LV

Forget apology-seeking letters. Maybe Las Vegas Mayor Oscar Goodman should send President Barack Obama a bill.

On Tuesday, the Las Vegas Convention and Visitors Authority reported 340 event cancellations in the past 90 days, a situation it said has cost the local economy about $131.6 million in lost spending.

The rampant flaking on Las Vegas business trips coincides with the dramatic tanking of the global economy and has accelerated more recently with public scoldings dished out by Obama and other politicians to bailout-seeking businesses considering Sin City getaways.

The cancellation of conventions and business meetings has cost local resorts 111,800 guests and 236,700 room nights and untold amounts of casino betting; the $131.6 million figure represents non-gambling spending only.

And operators of the biggest resorts on the Strip fear fallout from the recession and all the ridicule being heaped on Las Vegas business travel will get worse before a recovery sets in.

A survey by the authority reports 60 percent of resort operators think 2009 convention and meeting attendance will fall further than it did last year when business travel was down 5 percent.

That could spell trouble for the estimated 46,000 people in Las Vegas who have jobs as a direct result of business meetings, conventions and trade shows.

"When we don’t have meetings here, people are losing their jobs," said Chuck Bowling, executive vice president of Mandalay Bay hotel-casino, home to one of the biggest convention centers in Las Vegas.

"The victims are the men and women who are working in our industry and the people we have to lay off," Bowling said.

Goodman’s beef with Obama’s remark in early February that bailout-taking companies should not go to Las Vegas "on the taxpayer dime" has been thoroughly worked over in the local and national media.

Las Vegas boosters and the business travel industry blamed the president and his defenders for exacerbating recession-related travel declines by suggesting companies that hold events in appealing destinations could be in line for a public shaming.

Wells Fargo and Goldman Sachs both canceled Las Vegas meetings in the wake of the scoldings. Beyond those, it is difficult to say how many cancellations are from the perception of Las Vegas as a frivolous destination or simply because of a sudden lack of money.

Making matters worse, the hand-wringing over business travel comes when overall visitation to Las Vegas is down.

The authority reported Tuesday that fewer than 2.8 million people visited Las Vegas in January, an 11.9 percent decline from the same month in 2008. Convention visitation was 538,415, a 20.6 percent decline from the 677,978 convention attendees who came to town in January, 2008. The average daily room rate was down 19.9 percent to less than $105.

Combined with the tourism numbers, business travel figures presented Tuesday to the convention authority’s board of directors were the most detailed quantification to date of how the economic and political climate has affected Las Vegas

The downturn has side-tracked the authority’s drive to complete an $890 million renovation of the Las Vegas Convention Center. Board members voted unanimously to suspend the project until at least the middle of 2010.

Brenda Siddall, the authority’s vice president of finance, said the suspension is necessary to help keep the agency in the black in light of declining room tax revenues, its primary source of income.

A year ago, the authority projected it would receive $243 million in room tax revenue this fiscal year, a projection that has been downsized to $190 million.

The decrease threatens to leave the authority with a $7 million shortfall in its ending fund balance, which isn’t allowable under law, Siddall said.

Suspending the convention center renovation, with other measures, will help the authority maintain an adequate ending fund balance.

"It is the only solution which does not impact our mission of filling hotel rooms," Siddall said.

The vote occurred Tuesday, but the plan to suspend the project has been public since last week.

Michael Hughes, vice president of research and consulting for Tradeshow Week magazine, said the suspension is understandable. But he added that the authority should get the project back on track as soon as possible.

"If this renovation is not done eventually … one day a major event might say the facility is not up to best practices," Hughes said. "You walk into the facility, and it feels like the early ’90s. Today, these events are about the attendee experience."

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

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