A Wide Open Future

Richard Harper is bringing his small-center approach to MGM Mirage's newest — and biggest — convention property

Staff -- Tradeshow Week, 5/2/2005

Unless you've produced a show in the 210,000 square feet of exhibit space at the MGM Grand Hotel & Conference Center, you've probably never heard of Richard Harper. But that's about to change.

When MGM Mirage's acquisition of Mandalay Bay Resort Group closed April 25, Harper moved down the Strip and up about 800,000 sq. ft. in exhibit space to sell.

The 25-year hotel sales veteran has a reputation among Las Vegas tradeshow managers for providing some of the best convention services in the city, so they're thrilled that he'll be their new contact at Mandalay Bay, which many say has been tough to deal with in the past.

On the brink of his transition, Harper spoke with Tradeshow Week Senior Editor Heidi Genoist about his strategy for keeping rooms and meeting space at the MGM Grand full — a strategy that will come in handy as he becomes a top executive with one of the largest hotel companies on the Strip.

Question: How did you come to the MGM Grand in Las Vegas?

Answer: I started working in hotels as a busboy. I joined Westin Hotels in 1982 and had an 18-year career with Westin, between Arizona, Hawaii, L.A., Palm Springs and Santa Clara.

Then I got a phone call one day from the vice president of sales for the largest casino hotel company in the world. That's a call you return pretty quickly. I came here five years ago.

Q: Now that MGM Mirage's takeover of Mandalay Bay Resort Group has closed, how will your role in the company change?

A: I will be vice president of sales and marketing for Mandalay Bay.

Q: What will become of Danielle Babilino (the former head of sales) and the rest of the Mandalay Bay sales staff?

A: Danielle resigned. So far as I know, the rest of the staff is intact and hopefully will stay on board, so they will get the chance to enjoy being MGM Mirage employees.

Q: The company now controls about 36,800 rooms and 1.3 million sq. ft. of exhibit space. What kind of difference is that going to make to Las Vegas? Will room rates go up?

A: I don't see that. I think what's so significant and unique about Las Vegas is that it's a city of one-upsmanship, where we all compete with each other. I see a lot more synergies happening between the properties that hopefully will benefit the customer and give them access maybe that they didn't have before, maybe more cohesiveness.

You can't tie in any type of room-rate growth with this scenario, because each property is going to be challenged to grow their room rates year after year (anyway). That's what we're paid to do.

Q: You mean cohesiveness among the separate properties?

A: Absolutely. The MGM-Mirage merger is a great example of that. That allowed us to bring together some deals for customers to be able to negotiate under a single contract for multiple properties — to use each other's venues, to overflow with each other, to maximize value for the customer.

Q: How do meeting space and room costs tie in together?

A: We spend a lot of time focusing on rooms-to-space ratio. That's a significant daily occurrence for us; that's how we start to identify whether we're going to be able to bid on a certain piece of business. The reason for that is that we've got to establish a certain base of group rooms every night of the week.

Q: Including weekends?

A: Yes, including weekends. Let me dispel that myth. We've taken up to 1,500 (or) 2,000 rooms over a weekend (for meetings), so it's not so much about not taking the rooms.

In the past, people have talked about not giving up rooms on the weekend because they want to have gamblers in the hotel. The reality of that is, if I take 1,000 rooms on a weekend, based on the space they need, that's going to prohibit me from doing a setup for a Sunday-to-Thursday program.

Q: So, how do you determine the correct rooms-to-space ratio?

A: Because we have to get to a certain base of business, we have to be very mindful of that — and that's (true of) any property in the industry. You can't take a 500-room group and give them 400,000 sq. ft. of space, where you have no other space left for the other 1,500 rooms that you need Sunday through Thursday.

Q: Then is there a standard minimum number of rooms per square feet of meeting space?

A: Sure. We have some parameters in place; they're guidelines that are certainly negotiable. For instance (at MGM Grand), if there's a citywide, and we have 700 or 800 rooms on the book as overflow, then I could take a 1,000-room group and give them more space than I normally would and still meet the commitment. My staff juggles that every day, whether you're 15 rooms or 3,000.

Q: Keeping the rooms full is your No. 1 priority?

A: Absolutely. You want to maximize your occupancy in the city. Room rates are an important driver, but there's so much more that every customer brings to the table on telecom, on audiovisual, on catering, the business center — the list goes on and on.

Q: In the past, show managers have complained about Mandalay Bay's policies concerning rooms-to-space obligations. Will that change under your management?

A: When some of their key customers learned of our merger, they were quick to share feedback on what could be done better, differently. I haven't heard any complaints about pricing; they just want better service, easier negotiation.

I need to get both sides of the scenario to make a fair assessment, but at the end of the day I don't want to hear a single complaint about how difficult it is to do business with Mandalay Bay.

Q: Have you ever before had oversight of a 1 million sq. ft. exhibit hall?

A: No, not one of that size. Not even close. It's going to be interesting to learn more about that world.

Q: How do you think it will change your job?

A: Our properties are going to work very closely together. It's a natural tie-in, when you look at almost 10,000 rooms and 2 million sq. ft. of (meeting and convention) space. When you add the Luxor and Excalibur into the mix as well, this little corner of the Strip is going to be able to house some huge shows.

Q: What is your current approach to identifying which markets to target for group business?

A: Something I have been particularly proud of at MGM Grand is a balanced marketplace. We want to have our hands in a lot of different jars. The trick to that is managing that business — the percentage of group business in a particular property — so that you find the groups and guests that bring you the most profit as a result of booking them.

Q: Which markets is MGM Grand strongest in?

A: High-tech is definitely our No. 1. Pharmaceutical has grown by leaps and bounds since we dedicated someone to that market. Incentive has been crazy. But there are still people who haven't done business here in Las Vegas, and I'm dying to find out who they are.

Q: Which groups do you wish you had more of?

A: Love to see more insurance business come to Las Vegas. That's a great profile customer across the board.

Q: How is the tradeshow business at MGM Grand?

A: Certainly, corporate is three-quarters of our business. It's interesting because a lot of the corporate groups now, whether they're user conferences or demos or whatnot, are incorporating a tradeshow format.

We have a 90,000 sq. ft. pavilion that we put up in the parking lot next to the conference center. And we had a company in there several weeks ago that did 410 exhibits. They came back and said that setup worked really well for them, because it created an outdoor market-type of environment that worked perfectly for them, and they want to come back next year and do the same thing again.

Q: If three-quarters of your business is corporate and if, as you said earlier, you're looking for a balanced marketplace, do you feel like you're missing out on association business?

A: Post-9/11 is when we really woke up on that. Prior to that, our corporate business was fast and furious; we couldn't keep up with the demand. We made a conscious decision Sept. 12 that we could not bank on a short-term, robust-economy corporate market forever. With that, we redeployed our staff and started focusing more on association business to make sure we were building a base for future years, especially during the off-season and shoulder season.

Q: Will you do the same for finding and targeting group business at Mandalay Bay?

A: There are core business principles that we all share and are very passionate about. But what makes this company so incredible is that we are unique in the way we evaluate and run our businesses. We're all about best practices, so if one of our sister properties is onto something, it gives me the opportunity to jump on board with that, and vice versa.

I want to talk to the (Mandalay Bay) staff and get their input on the business model — what's worked, what hasn't. I won't take too long to formulate a strategy, but the first thing I need to do is meet with the team and get some in-depth feedback from them.

Q: What should organizers who've been dealing with Mandalay Bay expect now?

A: We just want to make it as easy as possible for people to do business with us.