Report: Las Vegas tourism tumbles 11.9 percent in January

By Richard N. Velotta

Tuesday, March 10, 2009 | 3:49 p.m.

Visitor volume took another header in January with fewer than 3 million tourists visiting Southern Nevada for the third straight month.

The Las Vegas Convention and Visitors Authority reported today that 2.8 million people visited in January, an 11.9 percent decline from January 2008.

Worse, average daily room rates plunged 19.9 percent from the previous year, the steepest decline since the 9/11 terrorist attacks, and citywide occupancy fell 13 points to 71.9 percent for the month. For area motels, occupancy fell 16.6 points to dip below half full for the first time in recent memory, calculated at 42.7 percent.

The statistics came on the same day that LVCVA board members voted unanimously to postpone its $890 million Las Vegas Convention Center enhancement project. The LVCVA board also received a report saying that since the fourth quarter of 2008, 340 groups have canceled meetings in Las Vegas, 236,700 room nights have been lost, 111,800 visitors stayed away and the local economy suffered a $131.6 million hit.

Terry Jicinsky, the LVCVA’s senior vice president of marketing, said those figures were based on a survey of Las Vegas properties. He said some organizations blamed the cancellations on the weak economy, but some said it was due to the public perception of conducting meetings in Las Vegas.

Several LVCVA officials left for Washington this afternoon to meet with government leaders about perceptions of Las Vegas.

Convention attendance in January showed continued erosion of the meetings industry, which Las Vegas has dominated for years.

The LVCVA statistical report said in January there were 1,368 meetings, 19.5 percent fewer than in January 2008, and attendance at those shows was 538,415, 20.6 percent off from the previous year.

But the lower average daily room rate and the reduced citywide resort occupancy were even more troubling for industry observers. Weekend occupancy was down 3.2 points to 79.7 percent and midweek occupancy was down 18.1 points to 67.6 percent. Just two years ago, Las Vegas enjoyed occupancy rates in the high 80s and low 90s.

The average daily room rate hit $104.89, creeping toward $100, a level that hasn’t been seen in Las Vegas ADR since December 2005.

Lower room rates translate into lower room tax receipts, a key factor in the LVCVA board’s decision to postpone the Convention Center project until at least the second quarter of 2010.

Brenda Siddall, the LVCVA’s vice president of finance, told board members that the LVCVA is facing a $53 million shortfall in room tax revenue in the next fiscal year as a result of the slumping economy. Although the LVCVA plans to cut operating expenses by 3 percent, it still wouldn’t be enough to offset the additional capital expenses and debt. Rather than risk default, board members reluctantly decided to suspend the project.

The LVCVA already has spent 15.7 percent of the project budget – $140 million – on the program to date. Workers already have completed a Metro substation, the refurbishing of one meeting room established as a prototype for the rest of the project, the paving of a parking lot and the design of the first two phases of renovations. The design of the third phase of renovations is about 90 percent complete, Terry Miller of HNTB Architects, which is coordinating the project, told the board.