Updated February 20, 2022 - 9:11 am
It didn’t take long for the leisure sector to make its way back to Las Vegas’ pre-COVID-19 pandemic levels as evidenced by strong performances in resort occupancy rates and even stronger gaming revenue statistics.
Now the question is how long will it be before a return to pre-pandemic convention attendance and international visitation levels?
Generally, convention attendees and international tourists spend more than other visitors. Conventioneers often are on business expense tabs and international travelers spend more because they tend to stay longer when they arrive and go all out when they travel thousands of miles overseas, often for once-in-a-lifetime trips.
Las Vegas Convention and Visitors Authority and Nevada Gaming Control Board statistics provide a clear picture of what’s going on.
For 2021, average hotel occupancy increased from January (31.6 percent) to October, the best month of the year (81.6 percent).
Weekends were at 48.3 percent in January (midweek 22.5 percent) and 90.4 percent in October, with the best midweek occupancy also occurring that month (77.5 percent).
Gaming revenue numbers have been well-documented. This week, we should learn whether casino revenues statewide will surpass $1 billion for a record 11th straight month.
At Harry Reid International Airport, 39.7 million passengers were served in 2021, nearly 23 percent fewer than in 2019’s record 51.5 million. The domestic-international split is even more pronounced — there were 38.2 million domestic passengers in 2021, 18.1 percent fewer than in 2019. Internationally, there were 757,642 arrivals, 80.1 percent fewer than two years ago.
Hopes for big year
2022 will be an important year for building back convention and international traffic to Las Vegas. The jury is still out on how Gov. Steve Sisolak’s announcement earlier this month lifting the state’s requirement for individuals to wear facial coverings indoors will affect visitation. Most are assuming it will be a positive.
Brendan Bussmann, director of government affairs for Las Vegas-based Global Market Advisors, said he expects most meeting planners to maintain their health and safety protocols, which should provide a level of confidence for prospective conventioneers coming to Las Vegas.
The next major convention scheduled for Las Vegas is April’s National Association of Broadcasters. While the NAB website says the association reserves the right to modify its health and safety standards, it currently is advising attendees that they’ll need to be fully vaccinated and wear masks at all venues to attend.
Bussmann said that while potential conventioneers may be more likely to attend events if they’re not required to wear masks, it’s also possible that a new variant of COVID-19 could change everything. Sisolak said in his announcement to “never say never” to the prospect of returning to a mask mandate, should the number of infections grow as they did with the omicron variant.
‘Encouraged by booking trends’
In the meantime, the city’s biggest convention hosts have reported in their quarterly earnings calls that their convention calendars are robust, thanks mostly to canceled shows being rescheduled.
Caesars Entertainment Inc. reports earnings this week, but in its third-quarter call, the company was optimistic about conventions.
“Looking ahead, we remain encouraged by booking trends into 2022 and beyond,” said Anthony Carano, Caesars’ president and chief operating officer. “While group attrition remains higher than normal, we began to see conventions return to Las Vegas in the third quarter, and the segment represented approximately 10 percent of occupied room nights, a dramatic improvement versus the first half of 2021.
“We continue to expect to see a gradual recovery in the segment leading into next year, and we are encouraged as group and convention revenues on the books for ’22 continue to pace nicely ahead of ’19. Demand for Caesars Forum is exceeding the original underwriting expectations with over 175 events booked currently, representing 1.8 million room nights and over $650 million of revenues for all future periods and 76 percent of this business is new to Caesars.”
It’s a similar story at MGM Resorts International.
“We probably lost about 150,000 room nights this quarter in that space,” CEO Bill Hornbuckle said in the company’s fourth-quarter earnings call. “Most of them tried to rebook or have rebooked. And when I say try, remember, we’ve been at this for two years in terms of COVID.
“And so when I look at next October, there’s not a lot of space left at the end in some respects. I think the real way to think about this, by the end — the back half of ’23, we’ll be back to full normal.”
International flights slowly returning
Improvements to international lift at Reid also are rebounding, but more slowly.
In the airport’s most recent flight activity report projecting the number of seats coming into the market by airline, many carriers are still not back to where they were in 2019. The good news is that some carriers that had no flights in 2021 at least have some for 2022.
International carriers project 330,134 seats coming to Las Vegas in May 2022, compared with 47,880 in May 2021. Among the carriers slowly rebuilding their itineraries from February through May of this year are Canadian carriers Air Canada, Westjet and Swoop, British operators British Air and Virgin Atlantic, European carriers Condor, Edelweiss and Eurowings and Panama’s Copa Airlines, which provides connecting service to South America.
MGM’s Hornbuckle, in this month’s earnings call, offered an example of how the international traveler has been affected.
“I had dinner with a gentleman last night, hadn’t been here in two years, wealthy guy, loves Las Vegas, just was afraid to come back,” Hornbuckle said. “So I think there’s a segment of the market that has real disposable income to spend that we have not yet seen to return.”