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A $3 billion growth spurt in convention space is underway in Las Vegas, where MGM Resorts announced last week that Aria would be the latest site of a project to build additional convention and conference space.
The $154 million Aria expansion, which will add 200,000 square feet to the property's convention center, came after completion of a $70 million, 350,000-square-foot addition to the Mandalay Bay Convention Center and the unveiling of a $2.3 billion plan to enlarge and update the Las Vegas Convention Center.
Why all the construction? Partly because the convention business has come back strong from the recession, said Michael Dominguez, senior vice president and chief sales officer for MGM Resorts International.
“The demand for traditional meeting space has never been greater,” he said. “We’re seeing that market expanding and continuing to grow.”
Las Vegas welcomed about 5.2 million convention attendees in 2014, generating an economic impact of $7.4 billion, as reported by the Las Vegas Convention and Visitor’s Authority. More than 22,100 meetings and conventions were held in Las Vegas convention centers last year.
That’s a half-percent increase from about 22,000 conventions and 5.1 million convention-goers in 2013. Just under 5 million annual convention visitors came to Las Vegas 2012 and 2011, the data said.
The most recent numbers are still well short of their pre-recession peak years of 2006 and 2007, when Las Vegas drew an average of more than 23,000 annual conventions and nearly 6.3 million convention-goers, which may make the expansion seem premature. But another factor — competition with such cities as Seattle, Chicago, Orlando, Fla., and Austin, Texas — is helping drive the growth.
In June, officials in Seattle announced that the Washington State Convention Center would undergo a $1.4 billion expansion, which would double its size by adding 440,000 square-feet of usable space.
Chicago’s McCormick Center, Orlando’s Orange County Convention Center and the Austin Convention Center also have expansion plans in place, totaling more than $3 billion.
“These cities are doing everything they can to take major conventions out of Las Vegas and bring them to their cities,” Dominguez said. “We want to make sure they stay here.”
For the Las Vegas Convention Center, which focuses primarily on top 250 trade conventions like the International Consumer Electronics and National Association of Broadcasters shows, need for expansion also seems to have come from the major vendors themselves.
An October LVCVA report quotes executives from CES, NAB and five other major shows suggesting the convention center’s expansion was necessary for the conventions to continue operating in Las Vegas.
“The expansion and renovation of the LVCC are essential for us to continue our successful partnership with the city,” CES President Gary Shipiro said, per the LVCVA report.
Dr. Stowe Shoemaker, dean of UNLV’s Harrah College of Hotel Administration, said low interest rates have encouraged businesses to borrow and build while doing so is still feasible.
“Money is cheap because interest rates are so low,” Shoemaker explained. “So the cost to borrow and build new convention space is low.”
UNLV’s Shoemaker said he doubted immediate expansion is actually necessary to keep some of the city’s major conventions in town. But it doesn’t hurt, he said.
“Regardless of why they’re doing it, the entire Las Vegas convention scene wins when our centers expand,” Shoemaker said.
Las Vegas’ 21-year reign as North America’s leading trade show host should continue, the UNLV dean added, given the city’s convention facilities are at least comparable with facilities across the country.
The valley’s easy access to airports and hotels, combined with its fame as a world leader in entertainment and nightlife gives Las Vegas an innate advantage over competing cities, Shoemaker said.
“This city is all about the hospitality and we do it really, really well.”