The covid pandemic devastated business on the Las Vegas Strip. Las Vegas literally shut down for a period and when it opened, the major casino operators Caesars Entertainment (CZR), MGM Resorts International (MGM). and Wynn Resorts (WYNN) had to slowly build their businesses back.
Those efforts were hampered greatly by the slow return of the major convention business. It's easy for a tourist to make the decision to return because there's no publicity surrounding an individual choosing to take a trip to Las Vegas.
In early 2022, we saw that the same scenario did not apply to businesses. Last year, CES, one of Las Vegas' highest-drawing conventions, was supposed to be an in-person event that would draw over 100,000 people. A flare up of covid, however, led to most major companies being forced to cancel their attendance.
That took a show that should have filled every hotel room on the Strip (and maybe most of them downtown) and left it a sad shadow of its normal self. Instead of the 170,000 people that normally attend CES, only 45,000 showed up.
On the positive side, the 2023 show more than doubled that number, but came nowhere close to pre-pandemic attendance levels.
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CES May Reflect a New Reality for Las Vegas
In the mid-90s CES actually split the Las Vegas Convention Center (LVCC) with an adult video expo (which made sense given that VCRs were the top consumer electronics property of the day). It has since grown to an event that fills up not just the LVCC, but also has ancillary events at hotels and convention spaces around the city.
In addition, some companies that don't exhibit at the convention book hotel suites/meeting space to meet with media, customers, vendors, and potential customers. In 2019, CES essentially took over the city, driving hotel rates to sky-high levels, filling restaurants, and packing casinos.
This year, the show attracted about 100,000 attendees, according to the Las Vegas Review-Journal.
That's a good number, but it's well down from peak CES and it may be a clear sign that business travel may not return to pre-covid normal. Clearly, some businesses see the value of in-person events and Las Vegas will always be a draw, but the pandemic may have shown some companies that you can do business without the huge cost of attending or exhibiting at trade shows.
The Las Vegas Strip Business Model Has Shifted
Caesars, MGM, Wynn, and really all of Las Vegas' resort/casino operators, along with the Las Vegas Convention and Visitors Association (LVCVA), seem to understand that the city's business model may have shifted. Major conventions will return but they might not be quite as big as they once were.
That does not mean Las Vegas will become less successful or that the big casino operators will suffer. While Las Vegas may suffer from a broad decline in business travel (something which a tough economic environment may make worse) the city has embraced a sports/leisure event model.
While CES may fall short, the NFL's Las Vegas Raiders have made their home games events that fill up the Strip. The NHL Las Vegas Golden Knights have done the same thing on a smaller level, filling up T-Mobile Arena with away team fans traveling to see a game (and enjoy everything Vegas has to offer).
In addition, events like the NFL Draft and the upcoming Las Vegas Strip Formula 1 race have in some ways become bigger than the biggest conventions. Add in music festivals and the huge artists who have taken up residency at Strip resorts, and entertainment has replaced business as Las Vegas' biggest draw.
That's in line with Americans embracing experiences over things. Yes, Las Vegas can probably expect its convention business to drop a little bit, but Caesars, MGM, Wynn, and the rest should actually do better as people look for high-value ways to have fun along with unique experiences.
