Hotels find new gold mine: Small groups that come to work, play

By Liz Benston

Tuesday, Feb. 26, 2008 | 2 a.m.

Etna Carr, who heads a private school in Richmond, Va., for emotionally disturbed children, is in dire need of a vacation.

Which is why Carr’s company, Geara Group, has arranged for an all-expenses-paid getaway in Las Vegas for the school’s 10 managers — including luxury suites at Wynn Las Vegas, a helicopter flight over the city, dinners at upscale restaurants, and tickets to Bette Midler’s show at Caesars Palace and “Le Reve” at the Wynn.

“This is a really difficult job, physically and emotionally,” said Carr, who is leaving the Wynn today. “We have to have breaks or else we are not going to be effective. And we have to get away if we’re going to do any long-range planning, because it just doesn’t happen otherwise in the atmosphere we work in.”

Small groups like Carr’s are held dear by hotels because they keep the town afloat much of the year, filling midweek gaps between the big shows and the hordes of weekend tourists. And don’t underestimate their numbers, despite all the attention given to the likes of the Consumer Electronics Show, the MAGIC apparel show and the National Association of Broadcasters convention — events that have attracted more than 100,000 people each.

Las Vegas attracts about 6.3 million convention and trade show attendees annually. About half — and likely much more — come in groups of 500 or less. These groups account for about 20,000 events a year, which is about three-quarters of the town’s convention business.

Among the most precious of these smaller groups: the top-flight corporate gatherings arranged by the Fortune 500 companies that regularly host executive retreats or reward their top salespeople with trips to Las Vegas. Those gatherings, and ones from lesser-known companies such as Carr’s, generally are not posted by hotels on the convention calendar maintained by the Las Vegas Convention and Visitors Authority — the hotels want to keep that side of their business quiet so it won’t get stolen by the competition.

“We work hard to maintain these relationships,” said Chuck Bowling, MGM Mirage executive vice president of sales.

The reason: These small groups are the secret high rollers of the convention world — groups that spare little expense on getaways for their employees. And their importance is growing in Las Vegas, which is already a top destination for a finite number of the largest conventions around and is hoping to increase its meetings business overall.

Chris Meyer, LVCVA vice president of convention sales, says the number of smaller events is growing, especially now that the slowing economy is forcing properties to become more aggressive about filling rooms at high rates.

“There’s a resurgence in this segment because they realize they can increase their occupancy by a couple of percentage points just by layering in short-term business more quickly and without all of the legalese you’d have in a larger contract,” he said.

That process has become easier because hotels have better-trained sales staffs and have beefed up their sales forces more recently to target business customers, Meyer said.

These hush-hush meetings also are lucrative.

Not only do single corporate hosts have higher travel budgets than trade shows or association meetings, they have less leverage to negotiate lower rates from hotels than their larger counterparts, said Michael Hughes, associate publisher and director of research for Tradeshow Week magazine.

“The trade shows and big association events tend to move across the country, playing cities and venues against one another, whereas corporate meetings will stay put and pay the going rate,” he said.

Also, trade shows and association meetings are open to anyone in a particular industry, and attendees often stay wherever they want to in town. Corporate meetings, on the other hand, are invitation events that typically generate business for a single property, with contracts calling for a certain threshold of spending on dining, entertainment and the like.

Meyer said the small-group business appears to be healthy despite the economic slowdown, which might be viewed as having a disproportionately smaller effect on small groups than on large ones.

The visitors authority, which has a convention sales team segmented into three geographic areas, has gathered more sales leads from the Western and Eastern regions from July 1 through January compared with the same period a year ago. Leads from the Midwest are about the same as a year ago, Meyer said.

The agency sells space at the Las Vegas Convention Center and passes on leads to all of the Las Vegas hotels with appropriate convention space.

Las Vegas is popular with large groups because of its ability to accommodate them, its critical mass of entertainment options and competitively priced direct flights.

But it’s not a top destination for small groups looking to be pampered at places like the Four Seasons or the Ritz-Carlton, meeting planners say.

Smaller hotels in places like Scottsdale, Ariz., are often preferred by planners because they focus on small groups, whereas big Las Vegas hotels typically try to book choice dates for big groups years in advance and then fill gaps in their calendars with smaller groups — a process that often means putting off smaller groups that want to book well in advance.

Unlike in other major cities, hotels in Las Vegas also reserve some rooms for high rollers accustomed to dropping into town on short notice.

In the historical pecking order of hotel customers, the smallest business gatherings had generally been getting the cold shoulder — unless the hotel had enough convention business booked well in advance.

MGM Mirage, which created a dedicated sales office to handle smaller business groups a few years ago, is one company aggressively reaching out to small groups.

Because small businesses are a growing part of the Las Vegas tourism industry, they deserve a dedicated sales team, Bowling said.

Carr, who took her co-workers to Las Vegas last year, says the city was a top choice for its shopping, upscale dining, entertainment and gambling.

For all its frivolity, the getaway is for a good cause.

“These trips help us develop a really strong team, which you have to have doing the job we do,” Carr said. “Everyone comes back renewed and closer. Doing this has been the best thing that we’ve ever done, because the higher morale transfers right back to the children.”