Vegas Remains an Expanding Universe

There appears to be no end in sight for the growth of Las Vegas' convention space. While other cities struggle to keep venues full, experts observe, companies line up to bring their events to Sin City, with the demand for space sometimes exceeding the supply.

Hotel and casino companies are seizing the opportunity, making plans to add hundreds of thousands of square feet of convention space to the city's inventory in 2009 and '10. Anywhere else, the construction race could very well lead to a space bubble, but Las Vegas isn't your average convention town.

The bigger players, Harrah's Entertainment, Boyd Gaming and MGM Mirage, have already broken ground on new projects — all of them vying to be bigger, better and higher-end. They know the corporate and association markets are looking for space, and they intend to do what it takes to attract these lucrative clients to their properties and keep them there.

Harrah's Entertainment will spend $1 billion to expand and upgrade its 41-year-old Caesars Palace. In an attempt to keep the landmark property competitive in an increasingly upscale market, Harrah's will add a new room tower, and give older sections of the resort a makeover, as well as various high-end amenities and 236,000 square feet of new convention space.

"When we began offering Las Vegas Meetings by Harrah's Entertainment in July of '05, the demand (for space) increased, especially at Caesars," said Michael Massari, vice president of sales and marketing. "The new space will allow us to keep up with that demand."

Due to be completed in '09, the Caesars' expansion will bring its total convention space to 300,000 sq. ft. It will help meet the needs of customers who have outgrown the existing space and attract more corporate and association clients, Massari said.

From a meeting planner's perspective, the extra convention space will meet a pent-up demand — especially that of smaller shows and new meetings that are space-intensive, said Greg Malark, COO of Helms Briscoe.

"We're looking forward to the increased capacity, as are many of our clients," Malark said. "We have lots of clients that would like to go (to Vegas), but haven't been able to get space. I believe it's going to raise the bar on the entire city and is going to continue to satisfy existing demand."

Toward the northern end of the Strip, Boyd Gaming's giant undertaking, Echelon, is now underway. Set to open in the third quarter of 2010, the multi-property resort will include 750,000 sq. ft. of convention space, according to the latest plans.

Gus Tejeda, Echelon vice president of sales, said groups are already showing a strong interest in the property. Tejeda believes demand for more meeting and exhibit space in Las Vegas is a reality, and he is confident that Echelon will have no difficulty staying booked.

"There is a huge demand (for space)," he said. "Right after groundbreaking we received no less than 40 leads on groups that require exhibit space. That's a tell-tale sign of what's yet to come."

The company is now in the final stages of a marketing plan and will start booking business in late fall.

MGM Mirage's massive CityCenter is rising in the middle of the Strip. Upon completion in '09, it will be the first LEED-certified hotel property in Las Vegas. Offering a three-level, 300,000 sq. ft. convention facility, CityCenter plans to corner the corporate and small tradeshow market.

"We'll make sure we attract new business, as well as business that has either outgrown other MGM Mirage properties or are looking to make a change," said Gail Fitzgerald, CityCenter vice president of sales and marketing. "We're booking already for '10 and beyond."

Even though venues are betting on continued demand, it all raises the question of when enough space is enough. Jan Freitag, vice president of Smith Travel Research, said, in this case, context is everything. "I'm not sure Las Vegas can ultimately be overbuilt," he said.

On the other hand, he added, certain outside influences are beyond anyone's planning or control. "If there's an external shock to the system, everybody will suffer," Freitag said. "It would become a rate war pretty quickly. The good news is that big conventions are booked five years out. The meeting space will be locked in."

Because of this, he explained, an economic downturn would have less of an impact on large venues. "The problem could be for the smaller corporate-driven groups," he said.

Yet, even the smaller resorts are happy to add to the meeting space supply. Boutique hotels such as the Grand Hyatt's Cosmopolitan Resort & Casino recognize and plan to fulfill the seemingly endless need for meeting space in Las Vegas. With an opening set for late '09, convention groups will be filling the Cosmo's 150,000 sq. ft. meeting center as early as January 2010.

Jennifer Toney, director of sales at the Cosmopolitan, said loyal Hyatt customers have booked the space, sight unseen, because of the brand's reputation. She believes the unique offerings of the property will draw an ample supply of varied, high-end markets to the resort.

"Vegas is such a hot destination, and the quality of hotels, services and food get better and better," Toney said. "It's the only city where, when new things are built, occupancy goes up. The hotels are the attractions, which is different than any other destination. Everybody wants to come here."

Of course, not everyone is happy about the growing supply of convention space in Las Vegas. Those who aren't smiling are competing convention cities that could see shows leaving them for the ever-increasing variety of space in the Nevada desert.

"Secondary cities will suffer because there are only so many meetings to go around," Freitag said. "Vegas is a very unique animal. If you build it, they do come."