COVID-19 Pandemic Leads LVCVA to Slash Budget, Confidence Continues for Las Vegas’ Future
Posted on: April 11, 2020, 02:57h.
Last updated on: April 12, 2020, 09:41h.
The Las Vegas Convention and Visitors Authority (LVCVA) is likely to drastically cut its operating budget by millions of dollars and delay some key capital projects due to financial shortfalls from the coronavirus outbreak.
During a Tuesday morning meeting, the authority is planning to reduce the current fiscal year’s budget by $79 million, a LVCVA spokeswoman confirmed to Casino.org. More reductions are possible in the next fiscal year’s spending plan, the spokeswoman adds.
To find savings, the authority will implement limited worker furloughs and some salary reductions for administrators, as well as halting select capital improvements. The authority has 455 full-time employees.
The shortfall comes because the authority relies on tax revenue from Las Vegas’ hotel rooms. Casinos and most hotels closed after the coronavirus pandemic led to occupancy rates falling to as low as 20 to 30 percent.
It is unclear when hotels and casinos will reopen. Multiple conventions were canceled, too.
West Hall Improvements Continue at Convention Center
Despite the financial pressure, the authority plans to continue construction on a much-anticipated $980.3 million improvement to the Las Vegas Convention Center’s West Hall, and continue working on a $52.5 million underground people-mover, the Las Vegas Review-Journal reported. The projects are about 77 percent complete.
The West Hall expansion will add 1.4 million square feet of space to the existing 3.2 million square foot convention center. Planned improvements to other parts of the convention center are likely to be delayed. So, too is the planned relocation of authority offices.
The LVCVA board is also planning to ratify cost-saving measures already taken by authority CEO and President Steve Hill. The authority board meeting is scheduled to take place at 9 a.m. Tuesday.
Those wishing to listen to the telephone meeting can call (866) 519-2796. The passcode is 114377.
When reached for comment on the planned cuts, Jace Radke, a spokesman for Las Vegas Mayor Carolyn Goodman, referred questions to the LVCVA.
When asked for his comments, Anthony Cabot, Distinguished Fellow of Gaming Law at UNLV Boyd School of Law, told Casino.org that the LVCVA has “two significant” roles.
The first is to promote tourism and conventions, Cabot explained. The second is to manage the convention center.
“In the past 30 years, Las Vegas has evolved from an economy that was heavily dependent on casino revenue to one that is primarily based on non-casino revenues, including convention and other visitors. The LVCVA is acting responsibly by reducing costs related to the operation of the convention center,” Cabot said.
He further predicted the “convention business will suffer a steep decline from pre-crisis levels even after the casinos reopen. Therefore, personnel and other costs related to the convention center should be reduced.”
But marketing of the city may need to be expanded, Cabot said, given the pandemic.
The promotion and marketing of Las Vegas for tourism and future convention should be continued and arguably increased,” Cabot said.
“People do not need to be persuaded that Las Vegas will return to its roots as the entertainment capital of the world. But LVCVA should use its promotional tools to convince visitors and convention organizers that Las Vegas is a leader in protecting the health and safety of its workers and guests,” Cabot added.
LVCVA’s Hill Hopeful for Future, Despite Rough Year Ahead
One of the biggest challenges for the LVCVA is that no one knows specifically when tourism, conventions, and gaming will resume.
“We’re in a position where it’s obviously hard to project the timing of this (recovery),” LVCVA’s Steve Hill told the Review-Journal. “Right now, people are just not able to travel, and that’s what’s causing the problem.”
“The product that we have — everything that is Las Vegas — is still there and will be there when this is over,” he added. “But the next year is going to be a rough year, and how rough that’s going to be is not as predictable as our economy has been in the past.”
As of Friday, Nevada has seen 2,584 coronavirus cases and 86 deaths linked to the virus.
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