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October 2, 2014

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Tourism agency not concerned about dip in 2013, optimistic about 2014

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Sam Morris / Las Vegas Sun

Pedestrians cross a driveway north of the MGM Grand on the Strip Friday, Oct. 25, 2013.

The Las Vegas Convention and Visitors Authority isn’t too worried that it had fewer visitors last year than it had in 2012 despite the nation’s economy being on the mend.

The reason: The agency thinks it knows why visitor volume dipped 0.1 percent to 39.7 million people in 2013, and 2014 already is setting up to be the year that the number of tourists breaks the elusive 40 million barrier.

Kevin Bagger, senior director of strategic research and analytics, told the LVCVA board of directors Tuesday that room inventory was less in 2013 than it was the previous year in 10 out of 12 months. So, even though Las Vegas maintained a respectable 84.3 percent occupancy rate for the year, the fewer available room nights led to a visitation decline.

Bagger also pointed out that 2013 was the second-best year for visitor volume in the city’s history, and one of the reasons it fell behind 2012 was because that leap year had an additional day. Had the 2013 calendar had the extra day, Las Vegas would have set a record for the year based on average daily visitation.

There are other reasons for optimism for 2014:

More rooms will be coming on line in 2014 with SLS Las Vegas (the former Sahara, adding 1,622 rooms), the Cromwell (formerly Bill’s Gamblin’ Hall, adding 188 rooms) and Hampton Inn and Suites (adding 145 rooms). Southern Nevada lost room inventory last year with the closures of Bill’s in February, the Gold Spike and Las Vegas Club in April, the Carson in May and the Alicia in August. The fall opening of the Downtown Grand mitigated some of those losses.

New attractions will draw people to the city. Caesars Entertainment’s Linq, New York-New York and Monte Carlo’s entertainment district and park, Bally’s Grand Bazaar Shops, South Point’s new Priefert Pavilion and Bowling Center, the SlotZilla and Voodoo zip lines, and Hershey's Chocolate World on the Strip are expected to bring additional tourists to the city.

The city’s convention calendar works in Las Vegas’ favor. Nine major rotating conventions – those that come to Las Vegas only occasionally – will be here this year. In addition, 70 new trade shows and conventions are on the calendar. The city also got a boost knowing that the National Finals Rodeo, which would have been here in 2014 anyway, has been extended another 10 years.

International flights are already increasing. The LVCVA is touting that the city’s hosting of the Routes aviation convention in October already is paying dividends with Canada-based WestJet, the city’s busiest international carrier, announcing 18 new weekly flights beginning in the summer. Restoring nonstop service to Tokyo also is a top priority for the LVCVA.

LVCVA President and CEO Rossi Ralenkotter wouldn’t say whether he was happy or disappointed with the 2013 results, but he said the number of visitors validates the strength of the Las Vegas brand and that last year’s $40 billion in economic impact and the additional 19,000 tourism jobs since 2009 are positives for the city.

“No matter what is happening in the world economically, the Las Vegas brand continues to drive international visitation,” Ralenkotter said.

Bagger also noted in his report that another city – New York – vaulted past Las Vegas for the highest occupancy rate in the United States in 2013. Last year, New York reported an occupancy rate of 84.6 percent compared with Las Vegas’ 84.3 percent.

But Las Vegas’ 84.3 percent occupancy means there are an average 127,000 heads in beds every night while New York has 81,000. Orlando, which had an annual occupancy rate of 71 percent, had an average of 82,000 visitors per night.

The national average occupancy rate is 62.3 percent.

New York has the highest average daily room rate at $259 a night, followed by the Hawaiian island of Oahu, $209. Las Vegas had an average daily room rate of $111 while Orlando reported $102.

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