Meeting News - September 8, 2008 - (Page 52)

Destination Insider: Las Vegas A Slowed Sin City Holds Some, Folds Some on Capital Projects Construction delays at McCarran Airport, hotels, and the convention center won’t put planners off the destination By A.E. Smith The latest victims of Las Vegas’s flickering construction boom are McCarran International Airport, which will cut 10 projects worth an estimated $360 million from its five-year capital improvement plan, and the Las Vegas Convention Center, which will break its planned $890 million renovation into three phases, extending construction well past 2011. The new airport proposal was approved by Clark County commissioners in response to requests from struggling airlines, which will foot much of the bill for the project through fees. Some carriers have reduced service to the airport—notably US Airways, which cut 30 percent of its overnight flights to the city this year. Some of the shelved projects, including runway improvements and an upgrade to the baggage handling system, will be reconsidered in 2013 or sooner if financial conditions improve. The airport is going ahead with plans for a third terminal and a heliport, which will divert some traffic from current flight paths. At the convention center, plans for the renovation have been divided and re-prioritized, said Chris Meyer, VP of convention sales for the Las Vegas Convention and Visitors Authority. The first phase of construction, which will include an upgrade of the North and Central halls, relocation of some utilities, and the addition of a police station, should be completed by 2011. Larger improvements, like the addition of meeting rooms to the South Hall and construction of a new lobby, have been pushed back into second and third stages; no new date of completion for these segments has been announced. The credit crisis and economic slowdown has affected plans for properties all over Las Vegas, as companies scramble to find financing. Elad IDB Las Vegas announced it has halted construction on the Plaza Hotel, which now will not break ground until 2009, and construction has stopped at Boyd Gaming’s $4.8 billion Echelon megaresort for at least nine months. Deutsche Bank announced it is foreclosing on the Cosmopolitan Resort and Casino, after developer Ian Bruce Eichner defaulted on loan payments. Meanwhile, visitor volume to Las Vegas was down 3.1 percent in June over the previous year, while the number of conventions held decreased 2.8 percent. 52 MeetingNews September 8, 2008 But if the economic downturn has taken the shine off of some new developments in Las Vegas, Sin City has yet to lose its luster as a meetings destination.“Our customers are becoming ever more vigilant about budget considerations, but I always try to point out that this is not a new thing,” said Michael Massari, vice president of meeting sales and operations for Las Vegas Meetings by Harrah’s Entertainment. “I haven’t had any customers express concern about what’s going on in Las Vegas.” And although the slowdown has impacted many of the newer arrivals in Las Vegas, projects backed by brands with long standing seem to be weathering the downturn. MGM Mirage has secured the first $1.65 billion for its massive CityCenter project, and construction is continuing on schedule for the Encore at Wynn Las Vegas, the Fontainebleau Las Vegas, and M Resort, as well as Morgans Hotel Group’s renovation of the Hard Rock Hotel & Casino. Massari reported that pre-bookings have been “robust” for the expanded tower at Caesars Palace, which is on schedule to reopen in June 2009. He said the ongoing credit crisis will probably weed out projects that could be less viable in the long term. “We don’t love seeing them get postponed and canceled, but [we] would rather have that than them be [completed] and empty. I think they’re better off [canceling] if they can’t show an ROI.” Las Vegas may benefit from planners who, in a more conservative economic environment, may want to bank on a destination they know will deliver a strong event, said Kelly Foy, CEO of Will Las Vegas be stripped of some big projects? Time will tell. Santa Barbara, CA-based Elite Meetings. He did not think the reports of construction delays will put planners off the city. “There is so much meeting space in Vegas, especially on the high end,” said Foy, who added that the slowdown “may even be a blessing in disguise” for planners, as the drop in leisure travelers forces hotels to compete for more meeting business. Glenna Fulks, a site procurement specialist for AO North America in Paoli, PA, reported that her company is increasing its Las Vegas business; four programs are in the works for 2009 and two more are being sourced for 2010, with attendee numbers ranging from 95 to 250. “I was not targeting any of the newly built hotels for my upcoming events, so I don’t need to worry about them,” she said. During an extended slowdown, Foy said,“The strong will survive, and Las Vegas is the powerhouse… It’s a no-lose destination in the group market.” www.meetingnews.com http://www.meetingnews.com

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Meeting News - September 8, 2008

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