News for the Hospitality Executive
|By Chris Jones, Las Vegas Review-Journal
Knight Ridder/Tribune Business News
Oct. 10, 2003 - A strong convention schedule should translate into a big fourth quarter for Las Vegas casino operators, a New York-based securities firm said.
Projected attendance at eight large local conventions scheduled for October, November and December should approach 542,000, up nearly 60 percent from the same period a year ago, Fulcrum Global Partners said Wednesday.
"Vegas is taking share away from (other) cities. That's really the driver," said Joe Greff, gaming analyst for Fulcrum. "Trade show organizers get a lot more people to attend shows in Las Vegas because it's cheaper to get there, cheaper to stay there and it's a little bit more fun. It's a win-win" for organizers and attendees.
During last year's fourth quarter, Las Vegas-area convention centers hosted only five large shows that attracted approximately 340,000 guests, according to the report, which relied heavily on information from the Las Vegas Convention and Visitors Authority.
Fulcrum defined large events as those with more than 20,000 expected attendees.
Though heavy convention traffic should lead to improved earnings for casino companies across the valley, it would particularly benefit MGM Mirage, Park Place Entertainment and Mandalay Resort Group, the report said, because those three companies combine to control nearly 75 percent of the Strip's hotel rooms.
And of the Big Three, no company stands to benefit more than Mandalay Resort Group, which opened its expanded 1.5 million-square-foot convention center in January.
Mandalay is expected to host 13 conventions with 1,000 or more attendees during the final six months of this year. Fulcrum estimates those events will result in a $10 million to $20 million increase in incremental cash flow compared with the same period a year ago.
"Someone who goes to a convention spends more on a room, spends more on food beverage and other stuff, than does a leisure traveler," Greff said. "The difference between someone paying $100 for a leisure room vs. $175 for a convention rate largely flows to the profit line because you're not incurring any additional fixed cost."
Greff compared Mandalay's convention business model to one The Venetian has used for years in conjunction with its on-site Sands Expo Center.
Looking ahead to 2004, Greff also cited a recent report in Tradeshow Week magazine that calls for a 17 percent increase in Las Vegas convention bookings.
Through July, Las Vegas hosted 3.6 million convention attendees with an estimated nongaming economic impact of $4.1 billion, the convention authority said.
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