Leadership Longevity: Can Show Biz Keep Growing?

Everybody in tradeshows knows that Las Vegas is the industry's leading city. Moreover, the Southwestern U.S. hospitality and entertainment mecca has seen strong growth in recent years, taking market share away from other destinations.

Is there any end in sight to Las Vegas' domination?

Sin City has hosted more Tradeshow Week 200 shows than any other U.S. city for 12 of the 32 years that TSW has published the annual report.

According to the most recent listing, with 44 of last year's 200 largest exhibitions, Las Vegas held a 22-percent market share. The city captured 22.6 million net square feet, or 34 percent, of the top 200 shows' paid exhibit space.

Since 2001, Las Vegas has grown its market share by 6 percent in terms of the number of shows it hosts, and by 12 percent in net square footage it sells.

How long can this go on?

Available exhibit space has a lot to do with the city's potential for continued growth, and there's no shortage of projected additions (see related story, p. 10).

"I've got another 650,000 sq. ft. in two to three years with Echelon, so that could garner a couple more (TSW) 200 shows," said Chris Meyer, senior vice president of convention center sales for the Las Vegas Convention & Visitors Authority.

Jeremy Aguero, principal analyst with research firm Applied Analysis, said, "Generally speaking, between 2006 and 2010 will be the period of the greatest expansion in southern Nevada's history."

Local show organizer Chuck Schwartz, chairman of ConvExx, is equally optimistic. He described Las Vegas' growth potential in the exhibition market as "unlimited."

Still, all three pointed out infrastructure vulnerabilities that city and hospitality leaders should watch.

Aguero believes McCarran Intl. Airport is "the single biggest concern right now." Dismissing visitor complaints about taxis, the Las Vegas Monorail and other intercity transportation, he pointed to the airport's capacity as a real problem.

McCarran's published capacity is 53 million passengers. Last year, the airport handled more than 44 million passengers. On its Web site, the Clark County Department of Aviation said the airfield could handle its maximum number of 53 million, but "the terminal and airport roadway system, in their current form, cannot."

Aguero added that the completion of major hotel construction projects could put traffic beyond capacity. "Near-term, it's an issue that requires planning," he said.

Meyer is keeping his eye on the airline industry's health, a direct factor in determining how many people can get to town. He believes demand will drive improvements, causing airlines to "increase service to places where they can fill seats."

In Schwartz's opinion, Las Vegas' facilities, transportation and recreation are better than any other tradeshow destination. For him, hotels represent "the one unknown. Even if your show is the best ever, when hotel rates get into the $200 range, you're cutting some people out."

Meyer said the notion that Las Vegas is getting expensive to visit is "a misconception. We're still a value destination."

He described the problem as one of perception, noting that a room at a Four Seasons in New York or Washington, D.C., is about twice as expensive as one in Las Vegas.

Schwartz agreed that "there are still some crummy properties on the Strip that people can afford. As long as those exist, we'll be OK."

But, he added, the attraction hotels are a big part of the Las Vegas experience that draws people in large numbers. "When those rooms are $250 a night, it becomes elitist. It's tough for a show organizer to put that kind of rate on their form," he said.

While some have raised concerns about finding the necessary hands to build and service facilities, Las Vegas' employment rates have hovered at all-time lows and its 7-percent employment growth is better than anywhere in the nation, Aguero said.

He wondered where all the new employees would live. "Affordable housing is an issue," he said. "We're now the 38th-most-expensive place to live in the United States."

Schwartz also believes attracting needed numbers of workers isn't the problem, as is demonstrated each fall when the Automotive Aftermarket Industry Week (including SEMA Show, which he manages) takes over the city.

"Combined, those shows are probably the largest trade event in the country," he said. "Is there enough labor? Yes. I see the quality of the labor being more of a problem. I think the unions have to be more relenting about letting the contractors withdraw whatever labor they want."

Still, taking everything into account, the experts predict growth.

In Meyer's view, the strength of the city's marketing efforts — combined with face-to-face events' growing credibility among company decision makers — will continue to fuel tradeshow participation.

For Aguero, it's all about the space. He believes Nevada will see more construction than anywhere else in the country.

"Add a strong U.S. economy, spending increases, technology advances," he said, "and it bodes well for southern Nevada's ability to capture incremental market share."