CVB Report: Vegas Remains Highest Roller

The biggest convention and visitors bureaus continue to get bigger, and the smaller bureaus just keep getting smaller. That's the simplest conclusion to be reached by perusing the Chicago Convention & Tourism Bureau's annual competitive analysis, which notes the bigger convention and visitors bureaus had even more money to work with in 2003, while the smallest bureaus saw their budgets slashed.

On average, budgets were flat last year for the 83 U.S. and Canadian CVBs surveyed. But within that group, CVBs that spend from $7.5 million to $9.9 million per year saw their budgets increase by nearly 10 percent, while those that spend less than $2.5 million annually saw their budgets shrink by about 8 percent.

Not surprisingly, Las Vegas continued to outspend its rivals, the 13th annual survey found. The Las Vegas Convention & Visitors Authority spent $138.7 million to market the city last year – more than the budgets of its nine closest rivals put together. That was up from $130 million in 2002.

The Hawaii Visitors & Convention Bureau's budget was cut from $61.5 million in 2002 to $37.7 million in 2003, causing it to drop from the second- to third-largest spender. Orlando, with a $38.1-million 2003 budget, moved into second place.

Among the 10 biggest CVBs, Reno stepped up spending to $33.9 million, from $25 million the previous year. Budgets in Atlanta, San Antonio and San Francisco remained stable, while Los Angeles saw its spending shrink by $2.4 million. Tiny Kissimmee, Fla. – with a 178,500 square foot convention center – remained in the top 10, with a nearly $22-million budget. And while San Diego this year dropped out of the list of the 10 largest spenders, a new city – New York – joined the pack.

Jason Draper, CCTB's research manager, wouldn't speculate on the CVBs' apparent jockeying for position. But he said, "the industry is becoming increasingly competitive and it would intuitively appear that bureaus are evaluating their strategies and infrastructures to maintain or increase their competitive edge."

Las Vegas continues to boast the most exhibit space, with more than 3 million square feet, followed by Chicago with 2.2 million, Orlando with 2.1 million and Atlanta with nearly 1.4 million, according to the competitive analysis. Chicago plans to have nearly 2.7 million by 2008. New Orleans' expansion to 1.6 million square feet by 2006, meanwhile, will raise it from the United States' fifth-largest to fourth-largest venue.

Las Vegas also leads the group with 126,787 hotel rooms. Orlando offers 110,798, Los Angeles 107,300 and Chicago 99,862 rooms.

This year's survey for the first time included Pricewaterhouse Coopers' convention center and lodging reports. PWC's convention center report concluded that occupancy rates at exhibit halls in so-called gateway cities – metropolitan areas with 30,000 or more hotel rooms – had fallen in 2003 to about 51 percent, 10 percentage points lower than in the last report before the Sept. 11 attacks. Venues in cities with 15,000 to 30,000 hotel rooms registered occupancy rates of about 32 percent, while regional centers recorded a rate of 26 percent, PWC found.

Meanwhile, PWC's lodging analyst, Bjorn Hanson, predicted that hotel-room occupancy will increase to 61.2 percent this year, from 59.3 percent in 2003. At the same time, room rates are forecast to rise to nearly $85, from about $83 in 2003.