Oliver Lovat points to the importance of conventions to Las Vegas in a city that continues to evolve.
This summer, I was visited by multiple colleagues from across Europe, many for business reasons wanting to know more about Las Vegas.
Just 48 hours after they left, I was joined by 35 MBA students from Cass Business School, in town for a five-day seminar on business strategy. On this course, tomorrow’s executives come to study the lessons of Las Vegas, which can then be applied to other industries. As that group exited, 200,000 ravers descended upon Las Vegas for the Electronic Daisy Carnival; a three-day party in the home of US dance music and the most successful nightclubs.
As the cars headed down the I-15 to California, plane-loads of business leaders arrived for the premier real-estate convention - ICSC.
As a surveyor, I was visited by many old friends and colleagues, but this was more than the usual catch up. Shopping mall operators and retailers spent as much time walking around the casinos and hotels as in the convention centre, seeking inspiration in Las Vegas’ success stories that continue to make it one of the world’s busiest destinations.
Then, after another 48-hour break, came the International Conference on Gambling & Risk Taking, where casino owners, managers and academics from all over the globe come to discuss all facets of gaming, and to observe the latest trends taking place in Las Vegas that can then be implemented in their home properties.
As the delegates left, I fled the whirlwind and headed to Utah to spend some time in a remote mountain to collect my many thoughts, before the hundreds of thousands more visitors head to town this week to work, rest and play for the summer. Summer 2019 is an interesting time for Las Vegas.
There’s no business like business
Here’s Las Vegas’ dirty secret that you don’t see in the marketing. If you took casinos away, the city would probably still be viable. If you took away conventions however, the city would collapse.
The average tourist spends $821 when in Las Vegas. The average conventioneer spends $1,020. The Las Vegas Convention and Visitor Authority reports 6.5 million conventioneers visited Las Vegas in 2018. Conventioneers directly supported c.45,000 jobs, $2bn in wages and economic output of $6.6bn. Including indirect and induced impacts, the totals increase to 70,700 jobs, $3bn in wages and $11.1bn of total economic output.
There is currently more than 3.2 million sq. ft of pure convention space in Las Vegas and 4.2 million sq. ft event space. The Venetian is enhancing its own two million sq. ft of convention and meeting space with the MSG Sphere, an 18,000-seated arena.
The 2.8m sq. ft of convention space under construction includes:
- MGM Grand, 250,000 sq. ft new space
- Wynn Las Vegas, 300,000 sq. ft new space
- Caesars Forum, 550,000 sq. ft new space
- World Market Center, 315,000 sq. ft new space
- LVCVA Convention District 1,000,000 sq. ft new space
- The Drew, 500,000 sq. ft new space
Las Vegas is betting big on business travel being its future.
Las Vegas is the US
I was at a breakfast with pollster Frank Luntz a couple of years ago. Luntz was discussing sampling the diverse population of the US, with the coasts being very different from the centre and thus skewing polls. Rather than setting up a diverse network of offices, Luntz' research base was in Las Vegas, where he could readily find an accurate sample of the country across all demographics.
In terms of customer engagement, it makes so much sense to have your customer come to you. Outside the major population centres, Las Vegas is the only place where you can see leading DJs, chefs and performers. Las Vegas has become an education centre, where brands can launch with enormous reach and be available, commercially viable real estate. Unlike in New York or LA, where there is a large, but static population, 10% of Las Vegas’ population rotates every 72 hours, and stretches across all demographics, incomes and backgrounds.
FOMO: Time-limited events
One of the most powerful marketing tools is creating fear, which coupled with the millennial trend of seeking experience-led entertainment, is the relatively new concept of FOMO - fear of missing out. Las Vegas has become the master of creating must-see, life-enhancing, time-limited events.
The earliest FOMO was The Rat Pack, then Elvis and Celine Dion reinvented the residency. Today, nearly 60% of all under-40s believe seeing a performer live in Las Vegas is more special than in their hometown.
Las Vegas is home to residencies of the greatest entertainers in the world. EDC is the US' leading electronic dance festival and Life is Beautiful is one of the hottest music and arts festivals. Not just confined to music, food festivals are also becoming staples of the calendar, as foodies come from across the US to sample the food hand-cooked by celebrity chefs, and the recently announced Metarama will be a huge esports festival, new to Las Vegas.
Las Vegas also has dozens of stages, including: The 2,000-capacity Brooklyn Bowl, The Joint, The Pearl, The Colosseum at Caesars Palace, the T-Mobile Arena and MGM Gardens, soon to be joined by the MSG theatre and the Raiders Stadium. The success of Las Vegas in enticing customers to get on a plane or make a car trip for a short stay is an example to anyone seeking ways to attract customers to leave their Netflix and social media and venture outdoors.
The internet has totally changed behaviours, but to a large extent, casinos are the same as they were 50 years ago. People come to a piece of real estate and use cash to play a game, and Las Vegas is remarkably successful in attracting the under-40s and even more successful in drawing the 21-30s.
Part of this is the above FOMO, but the real change came with the opening of The Cosmopolitan, and in this case, partly by accident. In seeking a customer that was not catered for, The Cosmopolitan targeted the urban city-dweller and created a highly desirable offering for the next generation of customer. The design constraints led to clustering and the small footprint improved accessibility. The customer found this neater design more enticing to the labyrinth-like mousetraps that were the hallmarks of past design and more akin to a city centre.
The clustering of restaurants, coffee shops, bars and clubs in close proximity also suits the next generation of customer. For those interested in shopping malls, retail and urban planning, it is a valuable lesson that can be exported across the country.
It’s only natural
As summer approaches and the tourists arrive to drink and party, locals know the real secrets are the natural environment. Short trips from Las Vegas include: the Grand Canyon National Parks; Valley of Fire National Park; Death Valley National Park; Red Rock Canyon National Park; Bryce Canyon; Zion National Park; Lake Mead; Sloan Canyon; Dixie National Forest; and a mere 45 minutes away is Mount Charleston, which doubles as a ski resort in winter.
Las Vegas is evolving, becoming a major city in the US, so far away from where it was even a decade ago. Credit is due to the city and state leadership for continually reinvesting, with a vision on how the city can thrive and innovate.
However, to quote the infamous British DJs, Mike Smash and Dave Nice: “We ain’t seen nothing yet, let’s rock.”
Oliver Lovat leads the Denstone Group, which offers strategic advice and consultancy on customer-facing, asset-backed investment and development, with a focus on casino resorts. He is a Fellow of the Royal Institution of Chartered Surveyors and visiting faculty at Cass Business School in London. He lives in Las Vegas.