Optimism high for return of convention business to Las Vegas

Slowly but surely, group business is returning to Las Vegas.

The city hasn’t hosted a large convention since March, and the next major trade show isn’t slated until June with the World of Concrete trade show. In the meantime, operators have had to be creative in finding ways to keep in touch with clients and make sure that those hosting events in Las Vegas can do so safely.

It seems as though those efforts are paying off, with local casino operators reporting strong convention bookings toward the end of this year.

“As we move forward with the vaccine rollout, we expect the second half of the year will start to ramp back up,” said Stephanie Glanzer, chief sales officer for MGM Resorts International. “I’m a strong believer that we’ll come out of this, and Las Vegas will remain the top destination.”

Small-scale events

Business travelers are among the most lucrative visitors in Las Vegas, spending 18 percent more than leisure travelers on average, according to the Las Vegas Convention and Visitors Authority.

But that source of revenue bottomed out in 2020.

The convention authority’s monthly visitor statistics say the city’s convention attendance count has been at zero or “not applicable” between March and January, its latest reported month. There have been some meetings and conventions in that time frame, but they’ve been too small to make the count.

MGM has hosted more than 200 smaller meetings and conventions since resorts started reopening in June. Several of those have been under its “convene with confidence” plan, a strategy meant to safely bring back meetings and conventions to the company’s U.S. properties through tools such as rapid, on-site COVID-19 testing.

“Small groups are happening and will continue to happen in the coming months,” Glanzer said. “We do believe large gatherings will come soon after (COVID-19 case) numbers get better.”

Caesars Entertainment Inc.’s Chief Sales Officer Michael Massari said the Reno-based company has hosted meetings at its properties almost daily since June, each operating under state capacity restrictions.

Public gatherings and events in Nevada had been limited to 25 percent fire code capacity, but the state began to ease restrictions on Feb. 15. Now, events can host up to 100 individuals, or 35 percent capacity, and venues eligible for large gatherings are capped at 20 percent of total fixed seated capacity with strict social distancing requirements.

Restrictions are set to loosen again on March 15. Businesses operating at 35 percent should be able to move to 50 percent capacity, and public gatherings will move to 250 people or 50 percent capacity.

Looking forward

It’s still unclear exactly when Las Vegas’ convention industry will return to pre-pandemic levels. Experts agree that it will likely be one of the last industries to see a full recovery, with international travel.

But the vaccine rollout has made a light visible at the end of the tunnel. Industry executives say they expect the convention business will start to bounce back later this year and early next year.

“We are optimistic (about) what we see on our books in the third and fourth quarter,” MGM Chief Operating Officer Corey Sanders said during a Feb. 10 earnings call. “Fourth quarter, we actually have more rooms on the books than we did the same time last year.”

Research shows that business travelers are itching to get back to in-person events.

A January study from the LVCVA found 91 percent of the 510 surveyed business travelers miss the face-to-face interactions that come with in-person conferences, conventions and trade shows. Fifty-eight percent said they felt burnt out from virtual business meetings and conferences.

That bodes well for Las Vegas.

“Our convention calendar is robust throughout the remainder of this year and into 2022 pending the fluid state of the pandemic,” LVCVA spokeswoman Lori Nelson-Kraft said. “Many of our trade shows and meetings are booked years in advance, and even throughout the pandemic, shows have stayed in touch with us, excited to return to in-person events and meetings when it’s appropriate to reconvene.”

The World of Concrete, set to run June 7-10, will be a benchmark for the industry’s recovery. Nelson-Kraft said she believes once the Las Vegas Convention Center opens its doors for the trade show, the majority of shows scheduled to follow will remain on the calendar.

The event is slated to be the first to use the convention center’s West Hall, a $987 million expansion project that was said to be 99 percent complete last month.

“The new convention center addition … will be really great for the city,” MGM’s Sanders said during the call. “I think it will give the city a competitive advantage.”

Spokespeople for Las Vegas Sands Corp. referred to comments made during a January earnings call, when CEO and Chairman Robert Goldstein said demand for conventions between 2022 and 2027 is “unbelievable.”

“Our customers want to come, and we remain very bullish on the return of Las Vegas. It may take longer than we want it to. It may take till the end of this year, as we see a visitation spike,” he said.

Wynn Resorts Ltd. spokespeople also referred to comments made during the company’s latest earnings call on Feb. 4, when CEO Matt Maddox said the company had about 170,000 convention room nights on the books for the second half of the year — “about the same” levels as 2019.

The company opened a 400,000-square-foot convention center at the beginning of 2020 that has yet to be used.

It’s unclear what sort of operating restrictions will be in place in the later half of 2020 and how many people would be allowed inside a Las Vegas convention. Maddox expects some of Wynn’s 2020 bookings to be canceled but said people have been sanguine about the second half of the year.

“One of the reasons we haven’t seen a lot of fallout quite yet in the back half of the year (is) because a lot of corporations are still waiting to see if there will be solutions for people to get back together in a large way,” he said. “We’re trying to provide those.”

The company has taken steps to help fight the COVID-19 outbreak and make large gatherings safe. Last year, the company formed a partnership with the University Medical Center to launch a new vaccination site and testing laboratory that can process between 6,000 and 8,000 COVID-19 tests in six hours.

These sort of actions — with other COVID-19 protocols, such as social distancing — are shown to help improve attendee confidence. The LVCVA’s report found 74 percent of the surveyed business travelers believe Las Vegas is “best prepared” to safely host in-person events in the second half of the year compared with other markets.

Keeping customers interested

There’s a reason operators are fighting so hard to keep meetings and convention customers. Convention visitors tend to spend more than the average leisure visitor and had a direct economic impact of $6.6 billion in 2019, according to an April report from the LVCVA.

The demographic also helps fill weekday rooms. The average midweek occupancy rate in Las Vegas has plummeted amid the pandemic, falling to 25 percent in December. That’s less than one-third of the 83 percent midweek occupancy rates in December 2019.

“Business travelers … stay in our hotels, eat in our restaurants, shop in our retail outlets, play on our gaming floors, and hold private catered events,” Massari said. “Meetings and events are critical to Las Vegas.”

Massari said Caesars’ sales team has been in constant contact with meeting planners and has attended several trade shows to continue building relationships with existing and new customers.

Also, the company has been “very active” in the meetings industry, with members serving on the boards of trade associations like the U.S. Travel Association and Meeting Professionals International.

“A large part of our efforts are focused on communicating to government officials across the country that our protocols allow for the safe execution of meetings and events,” he said.

Nelson-Kraft said the LVCVA — which runs the Las Vegas Convention Center — has also remained in active and ongoing communication with all of its show producers throughout the pandemic.

“We also have provided as much flexibility needed to relocate show dates when needed; kept customers apprised on the state’s health and safety protocols and restrictions and everything resorts and venues are doing to put their health and safety first,” Nelson-Kraft said.

MGM got creative last year when looking for ways to make sure Las Vegas remains relevant to its customers.

The company launched a series called “Welcome to the Show — From Home” when the shutdowns began in March. The virtual series streams monthly, highlighting the offerings clients can find at MGM properties. Last month’s virtual showing took clients through a virtual tour of the Shadow Creek Golf Course, highlighting specialty drinks at the clubhouse and an interview with professional golfer Alison Lee.

Attendance can reach up to 400 viewers, Glanzer said.

“Our priority was staying connected with customers and understanding that we’re all going through this time together,” she said. “We have to stay relevant as the city of Las Vegas and as MGM Resorts.”

The Review-Journal is owned by the family of Sheldon Adelson, the late CEO and chairman of Las Vegas Sands Corp.

Contact Bailey Schulz at bschulz@reviewjournal.com. Follow @bailey_schulz on Twitter.