Las Vegas fights to stay ahead of convention competition

By Conor Shine

Sunday, Sept. 7, 2014 | 2 a.m.

Las Vegas’ most important construction project isn’t on the Strip. It’s not a casino or hotel. It’s not a stadium for pro soccer or hockey.

It’s the $2.5 billion renovation of the Las Vegas Convention Center, which, if successful, should help Las Vegas keep its crown as convention king.

“What we want to do is set the bar so far ahead of our competition they can’t catch up,” said Rob Elliott, senior vice president for public affairs at the Las Vegas Convention and Visitors Authority.

Since its early days, Las Vegas has depended on conventions to drive the economy. Today, conventions fuel $7.4 billion in annual economic activity here, and the impact is increasing as the region’s economy continues to recover.

But Las Vegas isn’t the only city doubling down on the convention business. Orlando, Chicago and others have spent billions over the past decade to upgrade their convention centers in an attempt to compete with Las Vegas.

“If (tourism) is our No. 1 industry, we must continue to have the No. 1 facilities and the best connectivity in the state, the country and the world,” said Tom Skancke, president of the Las Vegas Global Economic Alliance. “We’ve fallen behind in a lot of other areas. We can’t fall behind here or we’re in trouble economically.”

Business travel spending dipped during the recession but has been on the rebound. Still, the industry is working against technology.

Computer programs and faster Internet speeds make it easy for people to talk face-to-face without paying for a flight or hotel. Heywood Sanders, a professor at the University of Texas, San Antonio, and author of the upcoming book, “Convention Center Follies,” says that has created a glut of convention space.

Space used for conventions has remained relatively flat since 2000, Sanders said, even as floor space has grown 36 percent.

“We know that expansions don’t guarantee any increase in business at all,” he said.

But among major convention markets, Las Vegas is uniquely positioned, said Robert Nelson, a University of Delaware professor who studies the industry. Convenient airline access, entertainment and a large supply of affordable hotel rooms make the valley a top destination.

“In today’s market, there are not many places where I would recommend expanding convention center space,” Nelson said. “But Las Vegas is one of them.”

The expansion

Built in the 1950s, the Las Vegas Convention Center has undergone more than a dozen renovations and expansions. The most recent came in 2002 with construction of South Hall, which doubled the exhibition space to 2.2 million square feet, enough to house 38 football fields.

The new project, which will change the name of the center to the Las Vegas Global Business District, will add 1 million square feet of exhibition space, a 50 percent increase, and incorporate touch screens, blazing-fast Internet, new restaurants and an updated facade.

The LVCVA plans to rebuild streets to move taxis and buses in and out faster.

A new office park that will give businesses a permanent location near the convention center also is in the works. Plans are being drawn up.

Once ground is broken, the expansion will take place in phases over the next decade. The convention authority will pay for the $2.5 billion project with bonds to be repaid primarily by hotel room taxes.

The convention center is among a list of billion-dollar projects that leaders hope will prepare Las Vegas for growth. The list includes Project Neon, a rebuild of Interstate 15, and construction of Interstate 11 to link Las Vegas and Phoenix.