Large-scale meeting and group business is trending in a positive direction nationally, and happening with a vengeance in Las Vegas.
That was one of the takeaways from a Jeffries Gaming-hosted investor call Monday. The guest of honor was Jennifer Herring, senior director of global events at Skokie-based NHS Global Events (although Herring works out of Las Vegas). Her resumé in gaming includes six years each at Bally’s Las Vegas and The Cosmopolitan of Las Vegas, booking events.
Yes, Herring said, because of COVID-19, the prices of hotel rooms, food and beverage, audio-visual presentations, and other vital meeting components are higher, but clients aren’t changing destinations. Rather, they’re paying more at traditional ones like Vegas. Indeed, there’s so much demand for top-tier cities that second- and third-tier markets are “going to be what’s left” soon.
Event planners can count on guests prolonging their stay if they’re in Hawaii, for example, as opposed to Kansas City (i.e., resort versus urban markets), but “overall, I’m really optimistic. I think things are trending in the right direction,” even for non-resort destinations.
Herring predicts the convention market will be back to 80 percent of pre-pandemic levels by the third quarter of 2022 and will hit 100 percent in 2023. Simply put, “People need people. … It’s about how we do it. How do we make it safe? We just have to make it happen,” Herring said, noting that she’s hearing from clients that they want to meet in person and on a large scale, not under small regional circumstances, even though many are not even back in the office yet.
Comparing Las Vegas hotel bookings with 2019, the NHS planner said, “The books are fuller than they traditionally are.” She gave the example of trying to reserve a block of 250 rooms at any of 15 different hotels next September and coming away empty-handed: The vacancies simply weren’t there. “What’s left and what’s visible is highly rated,” though. “You’re getting good product.”
Aside from COVID, the biggest issue facing meeting planners is labor – or the lack thereof. “It’s a problem that needs solving across the board,” Herring said. “I’m hearing it everywhere.” She recalled that it was a consideration even in 2019, but has grown much worse. “I’ve never seen a labor crisis like we have now.”
Another upward pricing pressure is, “Everyone’s growing green.” Not only do food-and-beverage services now manifest in Bento boxes and individually plated food (the buffet being a thing of the past), but meeting planners have to use environmentally friendly bamboo plates and utensils “and they’re not cheap!”
Event bookings are further complicated by the absence of force-majeure clauses, meaning they’ll have to eat the cost of canceled events.
“Hotels don’t care if your company won’t let you travel … but it’s not stopping people from moving forward,” Herring said, noting that California, Chicago, and New York City, with their steep anti-COVID protocols, are less attractive than the laissez-faire regimes in Florida and Texas.
Still, “The booking pace is strong and the booking window is far. The amount of requests we’ve received over the past three weeks has probably doubled.”
So much convention business has been deferred by the pandemic that new bookings are being pushed as far out as 2028. “Early ’23 is very tight. Hard to find room product and rates are high,” summarized Herring.
COVID remains the elephant in the room and health protocols look to permanently exert upward pressure on the price of holding a group event.
“COVID is the biggest complexity that we’re trying to navigate. There are so many things involved in COVID.”
Many meetings now require a negative virus test and/or proof of vaccination – even day-to-day testing during the event. “These are things we never saw before and it’s a big expense,” Herring said, although she demurred as to the exact cost. To make matters worse, testers themselves have been known to quit.
Pressed on when the situation might improve, Herring responded, “There’s not a timeline on the questions being asked. The deep planning is taking place three months out,” but there’s very little visibility into the future.
Herring’s positive outlook found support from Wynn Resorts spokesman Michael Weaver, who told the Las Vegas Review-Journal that the company had seen an “incredible surge in demand for Las Vegas among domestic leisure and gaming customers in 2021,” one that he expected to continue “for years to come.”
