LVCVA is flush with cash, signaling a healthier tourism industry
While some are still awaiting a turnaround from the worst economic times they’ve ever seen, the Las Vegas Convention and Visitors Authority is flush — so flush that the LVCVA board is being asked to increase the authority’s general fund budget by $10.6 million.
The LVCVA board of directors’ audit committee on Tuesday recommended a series of budget shifts that will enable the authority to spend $5 million more on overseas advertising and marketing. The recommendation will go to the full board in November.
Rana Lacer, the LVCVA’s vice president of finance, told the committee that room tax revenue is stable and that the Las Vegas tourism industry is now in its third year of recovery.
Room tax is the LVCVA’s primary source of revenue, and it’s driven by room inventory, average daily room rates and occupancy rates. A key factor in Las Vegas’ success is that among top tourism destinations, it continues to have the highest occupancy rate in the nation as of June 30.
Las Vegas’ occupancy rate at midyear was 84.9 percent, topping Oahu (Honolulu, 84 percent), New York (80 percent), Miami (79.2 percent) and San Francisco (77.8 percent).
LVCVA officials say economic stabilization, improving consumer confidence and targeted ad campaigns are responsible for the revival in visitation and room rates. Room tax and gaming fees revenue increased from $180.5 million in the 2011 fiscal year to $202.6 million a year later.
“(The LVCVA) is heading in the right direction in nearly every respect,” said Richard Bowler of Piercy Bowler Taylor & Kern, the LVCVA’s independent auditor.
The committee’s recommendation would increase the LVCVA’s $265.8 million budget to $276.4 million, with $5 million extra going to advertising and $5 million being transferred to the organization’s capital expense budget. The LVCVA also will spend $275,000 more for marketing, $220,000 more for general government expenses and $150,000 more for operations.
The $5 million that would be shifted to the capital projects fund budget would bump that amount to $75.4 million, most of which is unspent money from the previous year that is being rolled over to 2013.
Earlier this month, the LVCVA board determined that some of its most popular ad campaigns, including its “What happens here, stays here” series, translates to foreign languages spoken in key markets.
Cathy Tull, senior vice president of marketing, said additional ad campaigns are planned for key international markets in Mexico and Great Britain as well as emerging markets in France, Brazil and major South American destinations.
Tull said the expansion of air service by Copa Airlines, which offers one-stop flights to Las Vegas from South America through Panama that will become daily operations in December, provides an opportunity to capitalize on some promising new markets for the city.