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Mike
Leven Bullish on Las Vegas Group Demand
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56% of corporate meeting planners cancelled one or more events in 2009, according to a survey conducted by Meetings & Conventions. No U.S. hotel group market was hurt more than Las Vegas in the wake of the AIG effect, President Obama’s remarks, plus the Great Recession. A total 95,000 Las Vegas convention roomnights were lost during February 2009 alone, according to the Las Vegas Convention & Visitors Authority. One major Las Vegas casino resort claimed $131 million in business events cancelled during the first quarter of 2009. So, given all the recent talk about strong group demand returning nationwide, I thought now was a good time to return to the Las Vegas scene and check on results to date.
“The Venetian will do 850,000 group room nights this year” “The Venetian will do 850,000 group room nights this year. That represents a huge increase from the 700,000 group roomnights of 2008 and 2009,” Mike said. Mike said conventions at the Venetian - - primarily group roomnights consumed Sundays through Thursdays - - represent 30% of the property’s total business. “We do 30 trade shows a year. That’s a lot in any year,” Mike said. Mike maintains Las Vegas was a Friday-to-Sunday destination prior to the Venetian generating M.I.C.E. (meetings, conferencing, incentives, and exhibitions) business upon its opening in 1999. The Venetian mix of business, according to Mike, is still heavily skewed toward corporate: 60% corporate meetings and events; 30% trade shows, conventions and associations; and 10% “other.” “Corporate meetings and events are very
strong,
even stronger for ‘12”
“We have two huge corporate programs on the books for 2012. One is for Google, involving 11,000 sales managers; another is six to seven back-to-backs with Hewlett-Packard.” The Venetian is experiencing a compressed booking window right now. Everything the Venetian books today is within a three-year lead-time window, and 20% of all group bookings are in year for year, Mike said. Mike expects total group roomnights to grow from 850,000 to one million by 2014. “Vitally
important . . . Vegas would be dead without groups”
I asked Mike what’s different about the new group business on the books: “Group demand is pretty much the same as in past years, but room rate is lagging behind ’07 and ’06,” he said. “Room rates are down due to the competitive environment here in Vegas. Groups are pre-conditioned to negotiate on the rate. Banquet revenue has actually improved - - (it) has not been greatly affected.” When asked whether there was much difference between group and leisure room rates, Mike said, “Our leisure rate in much higher - - 20% higher - - due to higher demand on weekends and no third parties involved.” While data on business mix for all 150,000 rooms in the Vegas market is not available, occupancy citywide has surpassed 85% year-to-date, according to Scott Russell, senior research manager, Las Vegas Convention & Visitors Authority. Looking inside the group numbers, Russell reported visitor per trip non-gaming total spend is higher: convention delegates US$798.00 on average and trade show delegates spent US$1,059.00. Russell added convention and trade show visitor length of stay is 3.9 nights. (For those interested, you can find additional information about convention delegates in the convention and visitor authority’s “2010 Visitor Profile Study” for overall visitor demographics or the “Market Segment Breakout” which has a more detailed look at convention visitors compared to others.) “Our
Macao property is doing well”
I couldn’t end
my visit with Mike without asking about Sands’ resort casinos in
Asia. “Our Macao property is doing well. Group business is
primarily Asian based. There is some spillover to our 1-year old
property in Singapore. Group bookings
are short-term for both. There is no
negative perception by groups booking a gaming facility, but Macao
might have
some booking restrictions by the government of China.” So what makes Las Vegas Sands different? “We are developers, first of all,” Mike said. “We are world-class specialists - - the World’s leading integrated resort development company. We provide it all: MICE event venues, banquets and food-and-beverage outlets, entertainment and shopping.” _________________ David M. Brudney is a charter member of
International
Society of Hospitality Consultants
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