LVCVA to slash budget by $79M amid coronavirus shutdown

The Las Vegas Convention and Visitors Authority is set to slash its budget by $79 million in response to the coronavirus outbreak.

The organization isn’t anticipating any significant revenue through the end of the fiscal year, which ends June 30.

LVCVA President and CEO Steve Hill also braced the board for the reality that the 2020-21 fiscal budget would be reduced.

“In February, we were excited about how we were going to set records in a number of different ways, and by the time we got to March, we realized that the coronavirus was certainly going to have an impact on all of those issues,” Hill told the board in the telephonic meeting. “While we are optimistic about the future of Las Vegas, we know that the industry is going to remain closed for a period of time and fiscal year ’21 is going to be a difficult year.”

An Applied Analysis report commissioned by the Nevada Resorts Association estimated the LVCVA’s general fund would see a reduction of $62 million in hotel room taxes as a result of Gov. Steve Sisolak’s executive order closing hotel rooms in mid-March. The LVCVA also won’t generate revenue renting space for dozens of trade shows and conventions that have canceled or postponed events.

Hill outlined the organization’s financial condition and said measures have been taken to cut executive salaries and furlough employees

Of the 455 full-time employees, 80 positions are being eliminated and 270 workers are being furloughed, Hill said. Health care benefits will be left intact. Hill said employees would be able to apply for federal and state CARES Act and unemployment aid.

A voluntary separation program is in place for workers nearing retirement or wanting to change careers.

The 400 temporary and on-call employee positions have been cut.

The board was required to take action on the budget reduction because of a requirement of the Service Employees International Union contract with the LVCVA whenever employees are laid off or furloughed.

Top LVCVA executives are taking pay cuts of between 4 percent and 10 percent, and all performance bonuses have been canceled.

A hiring freeze has been implemented, and Chief Financial Officer Ed Finger said only the recruitment of a chief marketing officer would go forward.

The redistribution of existing funds will result in the LVCVA not having to dip into its reserve funds, a strategy that will enable the organization to prepare for the worst if closures are continued.

Hill said he expects a gradual return of business with the locals and drive-in markets coming back first, domestic travelers from within the United States next and international markets last, with visitors from Mexico and Canada leading the way among international travelers.

Hill emphasized that all bond payments would be made as planned, and while the LVCVA has been put on a credit watch as a result of the lack of revenue coming in, Las Vegas is no worse off than other destinations.

He repeated his belief that “Las Vegas is absolutely still the best place to be” in terms of a recovery.

“It’s going to be difficult for the industry, it’s going to be difficult for all of our employees, certainly for our guests and customers, and for the city as a whole,” Hill said. “Everyone is going through this and everyone is going to be affected by this in one way or another and we know fiscal year ’21 is going to be pretty tough.”

The budget will be introduced at the May 12 board meeting and considered for approval after a public hearing in a special meeting May 27.

Hill said employees, called “ambassadors,” have contributed $50,000 to COVID-19 relief efforts in Southern Nevada.

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