Las Vegas Convention and Visitors Authority President and CEO Steve Hill credits Allegiant Stadium for aiding the city’s recovery from the COVID-19 pandemic and isn’t worried that rising room rates will price out visitors.
Q: What has been the impact of opening the $2 billion Allegiant Stadium that’s partially funded by an increase in hotel room taxes?
A: We thought it would be worth it when we were planning the stadium. It has doubled the performance we had expected. Not in attendance so much. That has been really strong, but the number of attendees who have come to events there from out of town is about double what we had expected. Besides having great events and helping fill the city, the image that Allegiant Stadium and the Raiders and NFL coming to Las Vegas has had on this city has been pretty remarkable. We wouldn’t have the Formula One race (coming to Las Vegas in November) if we didn’t have Allegiant Stadium. Being an NFL city and being able to show off at the NFL Draft, the Pro Bowl and seeing that partnership work has attracted others. It raised our global profile as a place that everybody knew and their eyes would light up. Now, we are seen in a higher light, a different plane and thought of as a place where you can do everything and not just some things. And Allegiant Stadium has had a lot to do with that.
Q: How did Allegiant help with Formula One?
A: It showed we could do events at that scale and do them for the NFL and (for the) discerning audience that they are. You look at selling out four BTS concerts over nine days in 90 minutes. The success the Golden Knights has had, that UFC has had, that NASCAR has had here — folks around the world now see the success at scale of a 60,000- or 65,000-seat stadium consistently. They think they want to be a part of that. Formula One saw that, too.
Q: What impact will Formula One in November and the Super Bowl in February have on the city?
A: I have said those two events in that (three-month period) are going to be the most important events in Las Vegas in my lifetime. It’s an opportunity for Vegas to show we can put on the biggest events in the world and do them better than anybody else. And it’s the only time to have the opportunity to do them the first time, and that’s going to matter. We will be able to show off, and everything will be open to us. The eyes of the world will literally be on Las Vegas for those two events, and we can’t ask for a bigger opportunity than that. Formula One will be an annual event so it will be relatively a permanent thing. The paddock building they are constructing will be an attraction in and of itself. There are meeting planners from across the country who we will bring to the event, and there will be a business event on that Thursday; and (we will) show them the paddock building and what they can do for their events in that facility and on that property. Both it and the Super Bowl will make our workforce a bunch of money. They are billion-dollar events.
Q: What’s the impact of having the Oakland A’s relocate to the Strip and adding to the sports and entertainment mix?
A: “We’re really excited about bringing Major League Baseball and the A’s to Southern Nevada. Having Major League Baseball in Las Vegas and having these professional sporting events around the calendar is going to help drive tourism. It’s a fantastic opportunity for Las Vegas.”
Q: What are the chances of landing an NBA franchise now that they’re building an arena south of the Strip?
A: I would be very surprised if the NBA doesn’t end up here at some point. It makes a lot of sense for them to be here. You can read the interest between the NBA, LeBron James and folks talking about having a team here and wanting to have a team here and seeing the success of the Knights and Raiders and the A’s.
Q: There are people out there upset with Las Vegas not applying to host the World Cup in 2026. What happened?
A: It’s the size of Allegiant Stadium. We would have loved to have done it. Soccer officials would have loved to have been here. That field tray is great and serves a great purpose and slides in and out of the stadium but it is not as big as the pitch the World Cup plays on. There’s no negotiation on the size of the pitch. We looked at taking seats out of Allegiant Stadium and growing grass around the outside of the field tray to make the field as big as needed to host World Cup matches, but FIFA requires a stadium to show it can have the match a year before it has the match. We would have had to have done that in 2025 and taken the stadium out of commission for 3½ months and come back again in 2026 and do it again and take 3½ months to grow the grass and have the World Cup. You would lose the stadium for nine months in a 15-month stretch in order to have three, four, five or six World Cup matches there. That just doesn’t work.
Q: Why didn’t people think ahead of the size needed for the World Cup?
A: You build that stadium out 100 feet in each direction, and you’re going to add half-billion dollars to the cost of the ($2-billion) stadium. We were trying to build this stadium and keep it reasonably close to a budget.
Q: What’s your thoughts about the visitor profile that shows visitors to Las Vegas getting younger and more diverse and what it means for the future of the city?
A: It’s a great thing. It’s one year and a pretty noticeable change. We see people more committed to the experiences and Vegas offers those experiences like no other place can and in a very concise and efficient way. That tendency is something we have seen more in younger people. I think that’s a part of what’s driving that difference. Leisure recovered more quickly than the meeting industry, and the meeting industry tends to be a more senior level and the leisure level is going to skew younger. I think those numbers will trend toward their longtime average, but Vegas is a cooler place than it has ever been. When I was that age, Vegas seemed like the place my parents went to and not me. Now, that’s not the case. We’re more appealing to that younger generation than we have ever been.
Q: What about the trend of being more of a family destination in 2021 and 2022. Do you expect that trend to continue?
A: I think we are. The broad variety of things to do here has enabled families to say I can bring my kids and they can find a few days of activities that they will think are great just like we will. Look at places like Area 15, and it has something at that scale like that. Kids love that. We had the Adventuredome for some time, but we added just a number of things, and sports is a big part of that as well. Just being able to come to Las Vegas and seeing your home team play or your favorite soccer player from Mexico or the UK. All of those things are now available here on a very regular basis. If you want to see BTS or Taylor Swift, that’s going to bring a family audience. Vegas’ menu of possibilities out there are really attractive to virtually everybody.
Q: Where does Las Vegas stand today in terms of its recovery from the pandemic?
A: Financially, the city has been setting records for a year. We don’t even think about COVID anymore. From an occupancy and international visitors perspective, we will have a little bit of recovery to do to get back to 2019 numbers. Occupancy is 3 percent or 4 percent away from that number. International flights and visitation is still down, about 15 percent from what it was in 2019. It gives us a little bit of upside to continue to improve. From a jobs creation and economic standpoint, the pandemic is in our rear-view mirror.
Q: When will we get back to 2019 visitation levels of 42.5 million compared to 38.2 million in 2022?
A: The difference right now is almost unnoticeable. The numbers we had in 2019 were at almost 90 percent occupancy. We have a few more hotel rooms, now, but the number will be right around that 42.5 million (this year).
Q: What does it say when Las Vegas has been setting gaming revenue records in the last two years without visitation back to 2019 levels? The Nevada Gaming Control Board reported 28 consecutive months with revenue of more than $1 billion, statewide.
A: It is largely because of the stimulus dollars and the fact consumers have a checkbook more full, and we anticipate at some level a return to a more normal number. But the city is growing and folks are more interested right now in spending on experiences rather than buying things. You see that across the country. Those are contributing to those great numbers.
Q: With rising room rates reaching record levels, is there a concern that Las Vegas will price itself out of luring visitors?
A: No. I don’t think so. Las Vegas is still a value when you compare it to national averages. Those prices have gone up across the country. Some of that price increase is because costs have gone up. We’ve gone up a little more than the national average because the demand for Las Vegas has been so strong. You wouldn’t try to book a room during CES if you weren’t going to CES, but for most days there’s a price point that works for every budget in this city.
Q: At one point during the early 1990s, gaming comprised a majority of revenue but over the last 25 years it has fallen and is now about one third of all revenue. Has the decision of casinos to focus on amenities paid off?
A: As Las Vegas has grown, having a broader variety of things to do, amenities and experiences in the city has allowed us to attract more people, and the more people we attract the broader those offerings can be. That diversity helps with the stability of the industry, (and) it makes Las Vegas more attractive to our historical customers and attractive to those who may not have been attracted.
Q: How would you grade the recovery of conventions so far?
A: The shows on average from an attendance standpoint are probably not going to fully recover to 100 percent where they were prior to the pandemic, at least for a while. We’re at 85 percent of attendance for the average show. We need to sell. We’ve had a faster recovery in Las Vegas than any other place in the country, but we also built 3½ million square feet of new meeting space during the pandemic. Going into the pandemic, it was 11½ million and now we have 15 million square feet. Just getting back to 2019 numbers isn’t enough. We need to fill all of that space. We got work to do, and we’re doing it.
Q: What is on the horizon for the Las Vegas Convention Center?
A: We have done the expansion part, but we have to do the renovation. That actually started (the last week of March). We’re moving our offices over the east end of the South Hall, and as we do that we’re changing the east end of the South Hall to make it more of an entrance to the backside of the South Hall than it has been in the past. In the past, it’s been the backside of the building, and we got a Boring station right there. which makes it more convenient for people. That hall is 1,900 feet long. To be able to divide the hall and provide a real entrance from both ends helps us utilize that hall better. That work will be done this year.
Q: What else is planned?
A: In March 2024, we will start the renovation of the North and Central halls, and the outside of the building so the old building looks like the new West Hall. That will take until the end of 2025 and then we think for a while we’ll be done with construction on the campus. We have a $600 million budget, and we put that together a couple of years ago. We have some flexibility but are dedicated to keeping it at $600 million. The West Hall project was $997 million with 600,000 square feet of exhibition space and meeting rooms of 150,000 square feet. We have 2½ million leasable space. We will lose some of that as we do the renovation to about 2 million before popping back up.
Q: What’s the impact from all of this work?
A: We will have a bigger facility to offer to trade shows. There just aren’t many competitors at that size. Orlando is a relatively close and attractive option for some. Chicago is the exact same size we will be once we’re done, but the experience for our customers is so much better. The West Hall is fabulous. Our customers love it. It was really well-designed, and it makes the show more efficient and cost effective, which is great for the trade show organizers. It’s terrific for the exhibitors and attendees. That experience is not the same on the east side of our campus. The building I am standing in right now opened in 1959 and it has never really had a complete renovation. The North Hall opened in 1983. The buildings are 40 and 60 years old. They’re dark. Back then, it was built as a box to keep people inside, but now, we want to have the outside as part of the inside. You need sunlight and air movement. You need a complete technology upgrade in the buildings. That will enhance the customer experience, which enhances the attraction for shows to Las Vegas and helps this city continue to thrive.
Q: What will be the overall impact of the planned Southern California high-speed train to Las Vegas and will it alleviate traffic on the Interstate 15 between California and Nevada?
A: It’s not enough to alleviate the traffic congestion, but it’s going to be terrific to have an alternative option for experience to come back and forth from Southern California. It will add some capacity but not solve the issues on I-15. What a terrific way to get back and forth. For folks to be able to take advantage of that, we’re really looking forward to it. It will be a fun experience. People won’t have to worry about how long it takes them to get home. I’m excited about the possibility of that train being in place.