The president of the Las Vegas Convention and Visitors Authority stressed Thursday it’s going to take time for tourists and business travelers to return and that there’s only so much stimulus the federal government can provide to help the economy recover.
LVCVA President Steve Hill, who appeared in a panel discussion on the third day of the ICE North America digital conference, said that of the 70 percent of the U.S. population that even considers coming to Las Vegas, the first core group that has come since the June 4 reopening makes up only one-sixth of that total.
The second core set of customers makes up one-third of the total. That group is waiting “a little bit to see and make sure both the health situation is good and Vegas is still fun. There’s concern about both of those issues,” he said.
The remaining 50 percent of the typical Las Vegas visitors aren’t considering traveling to Las Vegas or anywhere else for three to six months, Hill said.
“The demographics of those (three) groups started younger and more male, certainly more employed, and generally wealthier,” Hill said. “As you move through that spectrum, those demographics just shifted to the other side. It was enough when we opened to keep most of the properties with the casino floors at a 50 percent capacity relatively full, but in order to sustain that, we’re going to have to get deeper into those groups.”
Hill said any decision on traveling to Las Vegas by potential visitors also depends on “how they feel about their home markets (healthwise) and that we have a set of offerings that make the trip worthwhile. We need offerings around entertainment, nightclubs, and sports in order to have that portfolio to fill the city up.”
On Thursday, Deutsche Bank issued a report saying traffic on the Las Vegas Strip over the Fourth of July weekend was down 64 percent from 2019. It also warned of the impact on tourism of the rising COVID-19 cases in Arizona and California and any quarantine imposed by Northeast states on travel from Nevada.
Hill said the LVCVA’s marketing and branding of Las Vegas in dealing with the coronavirus needs to be “honest and authentic.” Las Vegas is going to be more intimate and personalized, he added.
“As we solve this health situation, we will be able to bring back those other offerings,” Hill said. “At its core, it’s important to be honest with our guests and let them know what is available when they come to Vegas. There are still a lot of great things to do, but it’s going to be a little different experience for a while.”
Las Vegas also counts on the recovery of the national economy to spur tourism. The federal stimulus has helped in that regard, but it’s not going to last forever and will cover about 70 percent of the recovery. “The last 25 to 30 percent will be difficult,” Hill said. “The economic crisis that is a result of the health crisis is going to take some time to overcome. The federal government isn’t going to pay for that forever.”
Conventions aren’t likely to return soon and that leaves a big gap in hotel occupancy rates on weekdays. The Global Gaming Expo announced this week that it has canceled its annual trade in Las Vegas in October. Other conventions have canceled their fall events as well, and Hill said the meetings industry will have a “critical role” moving forward. It’s why Las Vegas has an 86 percent occupancy rate on weekdays over the last five years. In 2019, 6.6 million people attended meetings and conventions.
“The city is not only built for leisure travel,” Hill said. “We need businesses to come back and spend money. We need trade shows. … There has been a fair amount of conversation about the efficacy of trade shows and conventions and meetings going forward — the phenomenon of work from home and its effectiveness and whether remote meetings and conferences at some level replace in-person convention trade shows and meetings.”
Hill added that the trade show industry “is in a difficult situation” impacting show organizers, contractors, and service providers. Customers are also “struggling.” Hill said the LVCVA is getting requests to reduce show size and to spread out spacing. Organizers want to reduce costs for square footage.’
“Add in the food and beverage contractors and subcontractors for construction looking for partnership opportunities, it’s going to be a couple of years grind on the economic side to get that industry back up and running,” Hill said.
Hill said he’s biased, so he sees working from home as temporary, especially when it relates to conventions and trade shows because it’s hard to develop relationships. “We all want to grow our networks,” he said. “There are many reasons to do so. One of the other life-changing situations going on right now is the work to diversify and provide more inclusion in our companies and workplaces. It’s harder to do if you cannot get together.”
The LVCVA, which is expanding its Convention Center, is well-positioned to recapture its business. So are Strip resorts that have expanded their own convention space, such as the Wynn and Caesars Entertainment, Hill said.
“We’re fortunate to be in Vegas, which tops the list of most show organizers involving places to be. If some shows don’t come back to Vegas after this is done, we’ll still have customers lined up to take their place. We’re also fortunate because of our proximity to Silicon Valley and the health of the tech industry. A lot of the meetings in Vegas are driven by the tech industry. It’s not only Silicon Valley, but up to Seattle. That industry is still healthy and doing well and at some level thriving because of the different situations we are in.”
