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September 20, 2019

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LVCVA: Shooting, room remodels cause 2017 visitor volume to drop

Strip at Night

Wade Vandervort

A view of Las Vegas Boulevard on Wednesday, Dec. 27, 2017.

The Oct. 1 shooting and fewer available hotel rooms caused a drop in visitor volume for 2017, according to preliminary numbers released Tuesday by the Las Vegas Convention and Visitors Authority.

In his presentation to the board of directors, Kevin Bagger, chief of research for the LVCVA, pointed to the shooting, renovations to rooms and the closings of smaller hotels earlier in the year as reasons for the negative numbers.

According to Bagger’s statistics, 42.2 million people visited Las Vegas in 2017, a 1.7 percent drop compared to 2016. Hotel occupancy for 2017 was 88.7 percent, a drop of 0.4 points compared to last year.

Because of the closures of small hotels last year, the total overall room inventory in Las Vegas dropped. There were 149,330 rooms in 2016 but only 148,900 in 2017.

And, Bagger said, because of renovations and repairs, the amount of rooms actually sellable was even smaller. He said on average in 2017 there were only 147,300 rooms available to be sold to tourists.

Bagger noted that Caesars Palace, Planet Hollywood, Harrah’s and the Linq all had rooms closed for renovation in 2017 but were now open. Rooms being renovated at Monte Carlo (transitioning to Park MGM), the Luxor and the Cosmopolitan Las Vegas will be reopening this year.

Previous LVCVA research — including customer surveys, hotel cancellations, drops in inbound traffic from California and conversations with hotel operators — had found drops in visitation in the wake of the Oct. 1 shooting.

On the positive side, Bagger said convention attendance broke an all-time record, with 6.6 million attendees coming to Las Vegas for business, a 5.2 percent increase from last year. Also, the average daily room rate rose by 2.8 percent, and RevPAR (or revenue per available room) rose by 2.1 percent.

Bagger also predicted visitor volume would increase modestly in 2018, rising by 1.2 percent.

Impact of marketing

In addition to reviewing last year’s visitors numbers, the board heard a presentation from financial analyst Jeremy Aguero of Applied Analysis about the economic impact of the LVCVA’s marketing efforts and the conventions it hosts.

According to Aguero, the LVCVA contributed to the Southern Nevada economy in a number of ways:

LVCVA’s operations and marketing helped create 7.6 million booked room nights in 2016, adding 13 percentage points to the occupancy rate.

Direct spending associated with those room nights totaled $4.2 billion.

Not taking into account marketing by resorts, attractions and special events, Southern Nevada received $14 for every $1 spent by the LCVCA.

In 2016, Aguero estimated, LVCVA advertising attracted 2.6 million incremental visitors.

In his report, Aguero also addressed the importance of overall destination advertising by highlighting the negative effects experienced by Colorado, Pennsylvania and San Diego after those jurisdictions cut back spending on advertising and marketing.

At the board meeting, the LVCVA also announced two promotions and one new hire, the result of a planned reorganization of the LVCVA’s executive level.

Cathy Tull, formerly senior vice president of marketing, is now chief marketing officer. Ed Finger, formerly senior vice president of finance, is now chief financial officer. The board hired Steve Hill — formerly the director of the Governor’s Office of Economic Development — as president and chief operating officer. Rossi Ralenkotter, formerly president and chief executive officer, will now be just CEO.