The High Price of a Glass of Water

-- Tradeshow Week, 8/28/2008 2:56:00 PM

All sorts of people eventually find themselves in a convention center, and most of them share a single pet peeve: The price they pay for a bottle of water is outrageous.

In fact, when the Las Vegas Convention & Visitors Authority surveyed customers who used the Las Vegas Convention Center in 2005, the No. 1 complaint was the high price of catered bottled water.

In those days, the price of a case of bottled water at the convention center was $60 and nobody, it seemed, was happy about it. The convenience of catered food and beverages in most convention centers and hotels typically means prices are far from modest, but that $60 price tag riled people up. Complainers at the time noted that in Las Vegas, water is not a choice – but a necessity.

In addition, LVCVA President & CEO Rossi Ralenkotter noted, a number of tradeshow exhibitors were breaking the “no outside beverages” rule by bringing their own water, sometimes by the caseload. Something, Ralenkotter decided, had to be done. Unfortunately, keeping thirsty customers happy took a bite out of the convention center’s bottom line.

In 2001, the LVCVA approved a 15-year convention center food service concession lease agreement with Aramark Sports and Entertainment Services. This commission-only agreement meant that if prices were an issue, both organizations would have a stake in the discussion.

In mid-2005, Aramark and the LVCVA agreed to lower the price of a case of bottled water to $43, but there would still be a price to pay. According to the 2001 agreement, the LVCVA got a 27-percent commission on all of Aramark’s sales. The catering company agreed to absorb a small part of the reduction, but the LVCVA had to reduce its commission on bottled water to 5 percent.

LVCVA recently computed the cost of keeping customers happily hydrated: a revenue loss of $86,000 in 2005, $148,000 in 2006 and $222,000 in 2007. At an Aug. 14 meeting, the LVCVA board of directors approved an extension of the modified commission agreement, but they were still concerned about losing more than $450,000 in commissions over a three-year period. 

Food and beverage prices have remained more or less stable for the past three years but in the coming months, an LVCVA-Aramark joint committee will discuss future adjustments. Board members suggested a comparison of catered water prices at other convention centers definitely be part of the discussion. But Jim Gans, LVCVA vice president of operations, noted, “No matter what, the price of water will remain a sensitive issue with us.”