Las Vegas Share of the National Convention Market Could Increas

Major Strip operators could be in for a 40 percent boost in profitability by 2005 from added convention business and higher attendance levels, a new Wall Street study shows.

"Conventions are critical growth drivers for Las Vegas, with capital expenditures (such as new towers at The Venetian, Bellagio and Mandalay Bay mainly) going toward conventioneers," Merrill Lynch analyst David Anders said. "The convention business keeps growing because there are assets being committed to it."

The Merrill Lynch study projected the number of convention visitors coming to Las Vegas increasing from 5.1 million in 2002 to 6 million in 2005. Total spending per conventioneer is also projected to increase to $1,250 by 2005, up 2.5 percent a year. "As a result, the total economic impact of conventions on the Las Vegas economy will increase from $5.9 billion to $7.4 billion in 2005, a 26 percent increase," the study said.

The Merrill Lynch study found the Las Vegas share of the national market should increase from 26 percent to at least 30 percent by 2005 largely because of the attraction of conventions from other cities. Las Vegas is beating out peer cities because of its new halls, lower rooms rates and affordable air fares.