Despite Super Bowl, F1, LVCVA projects flat tax revenue for ’23-’24

Visitors to Las Vegas spent more money per trip last year than any time in history, and the momentum should continue when the city hosts two new big-ticket sporting events in the next year. But the Las Vegas Convention and Visitors Authority projects flat tax revenue for the 2023-24 fiscal year.

In a short preview of the LVCVA’s budgeting process Tuesday, President and CEO Steve Hill told board members the hotel room tax is expected to generate between $305 million and $351 million in the fiscal year that begins July 1 and ends June 30, 2024.

Hill explained in an interview that a combination of factors is contributing to the decision to project flat revenue.

He said the LVCVA prefers to lean conservatively on revenue projections, but the forecast for next year is influenced by consumers spending less due to inflation and whispers of a potential recession.

“We were at approximately $300 million in room tax last fiscal year (2021-22). This year (2022-23) is going to be around $350 million and that’s an unprecedented jump in revenue already,” Hill said. “We anticipate some of the increase in room tax to the increase in spending capacity that our customers and consumers throughout the United States and the world have had. Stimulus dollars were made available and our customers’ pocketbooks are doing better than they ever have. As they spend through that extra money they were provided, we can potentially see spending come down somewhat. But we think that will be offset by some of these great events we’re going to have.”

Super Bowl, Formula One ahead

He was referring to the four days of activity leading up to the Formula One Las Vegas Grand Prix on Nov. 18 and Super Bowl LVIII, scheduled at Allegiant Stadium on Feb. 11, 2024.

In a report on the economic impact Southern Nevada’s tourism industry has on the region, the LVCVA reported that while 2022 visitation remained below pre-pandemic 2019’s total and 2016’s record of 42.9 million visitors, those traveling to Southern Nevada on average spent more per trip than anytime in history.

Visitors to Southern Nevada spent $44.9 billion, or an average $1,156 per person per trip, in a report commissioned by the LVCVA and drafted by Las Vegas-based Applied Analysis. In 2019, visitors spent a total $36.9 billion, or $867 per person per trip.

“Spending on entertainment increased markedly compared to 2019 as Southern Nevada hosted a growing array of headliner residencies, large concerts and entertainment productions,” the report said. “While fewer visitors attended shows compared to 2019, those who did spent significantly more, which drove entertainment to represent 10.1 percent of total visitor spending, up from 6 percent in 2019.

“Conversely, visitors spent a smaller portion of their budgets on sightseeing, which declined from 3.4 percent to 1.2 percent of per visitor spending,” the report said. “Spending shares among the other major categories generally tracked with pre-pandemic trends.”

Budget talks coming in May

The LVCVA will introduce its 2023-24 budget at its May 9 meeting. State law requires the agency to conduct a public hearing on the budget, scheduled for May 31.

Most of its annual budget is spent on advertising and marketing Las Vegas to encourage more visitation. Last year’s $273 million operations budget included $94 million for advertising and $27.5 million to sponsor special events that usually draw hundreds of thousands of people to the city.

The LVCVA board already agreed to spend $40 million to sponsor the Super Bowl and $19.5 million over three years for the first three Las Vegas Grand Prix races through 2025. In addition, the board recently agreed to spend $7 million to purchase Formula One tickets, some of which will be resold to Las Vegas resorts and some to be given to top customers to encourage attendance at future races.

Spending on soccer

On Tuesday, soccer was front and center, as the board unanimously approved spending:

$350,000 to sponsor an international soccer match at Allegiant Stadium in July for the Confederation of North, Central America and Caribbean Association Football tournament, expected to draw 46,000 out-of-town visitors and provide an estimated $70.4 million economic impact.

$350,000 to sponsor a match between Manchester United and Borussia Dortmund at Allegiant Stadium on July 30, expected to attract 30,000 out-of-town visitors and provide an estimated $56.4 million economic impact.

$250,000 over five years to sponsor five four-day high-level boys youth soccer tournaments at two parks in Henderson in June 2024-2028 through Premier Soccer Services, in partnership with Mexican professional soccer club Monterrey Rayados.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.