‘AIG effect’ sending meetings to Motown

So where would you rather hold your next convention? Las Vegas or Detroit?

No, this isn’t a bad joke.

Detroit is taking meeting business that would normally be suited for Las Vegas or other resort destinations.

The Detroit Free Press reported last week the American Federation of Teachers elected to bring its 2012 annual meeting to Detroit. Other conventions are headed to Detroit, opting for intense business discussions rather that golf excursions and extravagant parties.

Call it the “AIG effect.”

Last year, insurance giant American International Group (AIG), after receiving $85 billion in bailout money, spent lavishly on a corporate junket to a luxury California resort in the middle of the recession.

Rather than drawing unwanted attention, as AIG did, businesses are opting for meeting locations off the typical convention trail.

Las Vegas has felt the pinch. Convention business is down 26 percent through July. Between October 2008 and March, Las Vegas had more than 400 meeting cancellations, costing the local economy about $166 million.

The United States Travel Association released a study recently that established a link between business travel and business growth.

Las Vegas public relations executive Reggie Burton said that fact means the city’s meeting and convention industry must combat negative convention perception of Las Vegas.

Burton launched Nevada Gaming Xchange, which helps meeting planners and convention sales departments devise public relations strategies that allow members of the conventions to reach out into the community.

Some groups want to help a community hit by an unfortunate circumstance.

Last year, Starbucks Corp. held its annual meeting in Hurricane Katrina-ravaged New Orleans and worked with Habitat for Humanity to build houses.

Burton said many community groups would welcome help from the convention industry.

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An Iowa nonprofit group could throw a wrench into Herbst Gaming’s bankruptcy reorganization plan. Clarke County Development Corp., which jointly holds the casino license for Terrible’s Lakeside in southern Iowa with Herbst, filed objections to the plan with the U.S. Bankruptcy Court in Reno.

Herbst’s prepackaged bankruptcy calls for lenders to take control of the company’s casino operations in Nevada, Iowa and Missouri.

Herbst pays the nonprofit group nearly $1 million annually through an agreement to share in the Iowa casino’s gaming revenues. The money is used for community projects.

A Reno attorney for one of Herbst’s lenders told the Des Moines Register the company was not intending “to circumvent any Iowa law as part of the bankruptcy reorganization process.”

Howard Stutz’s Inside Gaming column appears Sundays. E-mail him at hstutz @reviewjournal.com or call 702-477-3871. He blogs at lvrj.com/blogs/stutz.