LVCVA Budget Cuts Won’t Touch Expansion
Diane Taylor -- Tradeshow Week, 5/15/2008 2:59:00 PM
When Brenda Siddall, vice president of finance for the Las Vegas Convention & Visitors Authority, presented the projected LVCVA budget for 2009 last Thursday, everybody knew change was in the air. Just two days earlier, at the monthly meeting of the Authority’s board of directors, she had warned that lower-than-projected room tax revenue would have an impact on her upcoming report.
The good news? It won’t affect the long-planned, long-awaited enhancements for the Las Vegas Convention Center. The bad news? Everybody else at the authority will have less money to work with next year.
Projected room tax revenue increases have dropped from 7 percent in April’s preliminary budget to the 2.5 percent in Thursday’s final budget. The resulting budget impact: Rather than an LVCVA budget increase of just over 3 percent next year, it will decrease by a little more than 1 percent.
The culprit is a change in assumptions regarding average daily room rates. In April, room tax projections factored in a 3.7-percent increase in 2009 average daily room rates; but the new budget reflected a projected ADR decrease of 1.2 percent.
Adjusted projections indicate total occupancy will only fall a half-percent, from 89.5 percent to 89 percent partly because of an anticipated increase of 7,000 available rooms. Typically, Siddall said, an increase in inventory coupled with even a slight fall in occupancy will translate into lower average daily room rates.
“After presenting our preliminary budget in April, we heard from our board members associated with hotels that an increase in ADR was not what they were seeing,” Siddall said, “and when we received the March figures, with our blended ADR below the prior year’s actual, we felt it prudent to revise ADR for 2009.”
Siddall said small changes to the budget that becomes effective July 1 were made across the board without significant cuts in anyone place. She added that no changes in the scheduled renovation of the Las Vegas Convention Center were “on the radar screen.”
Utility relocation will begin as scheduled this summer, as part of the enhancement program. That will reduce available parking and accompanying revenue, but income from scheduled conventions should cover that decrease, making 2009 convention center revenue flat compared with 2008.
