ReviewJournal.com - Business - Bigger and bigger, maybe not better

PRINT THIS Popular

Jan. 11, 2008
Copyright © Las Vegas Review-Journal

Bigger and bigger, maybe not better

Some observers wonder if CES is worth trouble and cost

By BENJAMIN SPILLMAN
REVIEW-JOURNAL

Allen Heath thought a shuttle bus would be the quickest way to get from Circus Circus on the Strip to the International Consumer Electronics Show at the Las Vegas Convention Center.

Midway through a trip that seemed to be taking hours, Heath realized he was wrong.

Fed up with traffic delays, he and some other passengers got off and walked.

"Everybody loves coming to Vegas, no doubt," said Heath, vice president of business development for a technology company in Denver. "They could make it easier."

Most Popular Stories

Going, going ... not gone

Grand plans for big hotel

Home prices return to 2004 levels, market watcher says

THE STRIP: Tropicana owner bankrupt

Long Gaughan: El Cortez owner sells stake in downtown casino

At last, positive signs in housing

Off-Strip hotels push harder

Station thinks big with Viva project

HOUSING MARKET: Foreclosure wave loses steam

INSIDE GAMING: MGM Mirage may say 'take two'

Heath's experience represents what's right and wrong with CES, the world's biggest electronic gadget show and an event worth nearly $233 million to the local economy.

The show is so successful that it attracts as many as 140,000 attendees and draws worldwide attention to Las Vegas.

This week alone "NBC Nightly News" broadcast from the trade-show floor, Microsoft co-founder Bill Gates, General Motors Corp. Chairman Rick Wagoner and leaders of Panasonic, Yahoo and Intel Corp. were among the speakers.

But when organizers from the Consumer Electronics Association and exhibitors from the world's biggest electronics firms pack up to leave town they do so knowing the lucrative show faces an uncertain future.

In short, CES may be getting too cumbersome and expensive to survive in its current form.

The massive show now covers nearly 2 million square feet of space in the convention center, Sands Expo and Convention Center and Las Vegas Hilton. Rates for even midlevel hotel rooms soar by hundreds of dollars per night during the event and traffic slows to a crawl.

Organizers have scaled back the number of people they allow at the show from a peak of more than 150,000 to the current figure of about 140,000 and plan to reduce it more in years to come.

But those measures may not be enough to ensure the show has a long-term future in Las Vegas, said Gary Shapiro, the Consumer Electronics Association's president and CEO.

Shapiro cited room rates as the No. 1 threat.

"A show is something that is very ephemeral," Shapiro said. "If it is perceived as too expensive it goes away."

Shapiro said the association has never sought to move CES to a new venue. Las Vegas, said Shapiro, is the only location in the country capable of handling the event.

And he envisions committing to hold the show in Las Vegas for another decade or more despite plans to hold smaller, affiliate events in New York and Dubai, United Arab Emirates.

"But CES, the big show, is not leaving Las Vegas," he said.

A more likely disaster scenario for the show would be what Shapiro calls the "cliff effect." That's when a show becomes so bloated and expensive it drives away exhibitors and attendees.

Shapiro cited Comdex, a technology show that attracted as many as 200,000 people at its peak but folded its tents and hasn't been held in Las Vegas since 2003.

He said that by charging too much for rooms, Las Vegas hotels run the risk of pushing CES toward a similar fate.

"It is just unconscionable to double the cost of a hotel room," Shapiro said. "I hate to say it, but it is a problem that could be self-correcting."

But others said the association has the power to achieve lower room rates during CES.

MGM Mirage spokesman Alan Feldman said CEA could get better deals for CES guests by purchasing more rooms in advance.

Feldman, whose company owns 10 resorts on the Strip, said that by boosting the number of rooms it buys in "blocks," the association would have more purchasing power.

He cited the room blocks purchased by organizers of the Specialty Equipment Market Association, an aftermarket car parts show, as an example.

On its peak night SEMA blocks 16,000 rooms and over the length of the show it reserves about 70,000.

"CES books a very small room block and leaves the market to set the price on most of the rooms," Feldman said.

Chuck Schwartz of ConvExx, the company that produces SEMA, said securing reasonable room rates is a priority.

"The best thing an organizer can do is block as many rooms as possible," Schwartz said. "If you go to a car dealer and buy three cars you are probably going to get a better deal than if you just buy one."

Feldman added that CES attendees are getting a much better experience for their money today than they were in 1978, when the event moved to Las Vegas.

"The attendees at CES are no longer coming to a city with cheap rooms and cheap food," Feldman said. "They are coming to what is arguably the world's most dynamic tourist destination."

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or (702) 477-3861.

Links powered by inform.com

Leave Your Comment	8 Reader Comments
Terms & Conditions The following comments are provided by readers and are the sole responsiblity of the authors. The reviewjournal.com does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please notify the web editor. Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 48 hours. Please do not submit a comment more than once.
Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Vegas = Rip Off wrote on January 14, 2008 04:55 PM: Vegas is a complete rip off, even outside of CES. I just got back from a weekend trip, and the prices of everything were exorbitant, including food, taxis, hotel, events, drinks, ect... I don't even gamble so I can't imagine what people actually spend who lose their money. It did seem pretty dead as well, perhaps people are realizing its not a good value or maybe it was a CES hangover effect. The hotel employees were either really nice, or complete jerks - most in the latter category. I will not go back until they lower their prices. If you like being nickel-and-dimed for EVERYTHING, go to Vegas. jl wrote on January 11, 2008 03:14 PM: One word- MONORAIL. I understand all the issues regarding the monorail, but it is by far the easiest and fastest way to get to the convention center. Mike, subways are not feasible given the soil conditions. However, a light rail would be perfect except for those not-in-my-backyard yahoos. Mike Wilson wrote on January 11, 2008 01:40 PM: Has there ever been a serious study into the possibility of a subway network for this city? If not, why not? If there was such a study, what did it find? Jerry Wayne wrote on January 11, 2008 09:09 AM: You would think that the CES and the companies that participate would learn from any weddings or reunions they've attended where the group reserves a block of rooms at a special rate. The city does need to fix the traffic situation, not only for convention attendees, but locals that must travel across town during these conventions. Former Resident wrote on January 11, 2008 08:53 AM: This is a wake-up call for Las Vegas. The traffic situation is becoming unbearable without adequate public transportation that actually allows people to move quickly in the resort corridor. The Mayor and County Supervisors need to take action and expand the trams to move people quickly from the airport to the resorts, Thomas and Mack and the University, the convention centers, and downtown. The reason the tram gets no riders is it is too expensive and not convenient. Put it to the airport and bus center, thru the middle of the hotels, on the strip, under the streets, whatever it takes, otherwise this city will never be the world class city that it wants to claim for itself. If the local casinos were smart about it they would make themselve park and ride destinations for a rapid transport system that would hub and spoke the casinos and the whole valley. Create the vision and use the convention authority money to execute it. Just do it. Visitor wrote on January 11, 2008 07:59 AM: All it will take for the CES to pull out of Vegas is for one or two big exhibitors to say "enough is enough" wit the big ticket room rates and over the top food costs in this town! We are at the limit of our financial string and the CES promotoers better get with the Vegas Bigwigs to straigthen out these costs or its fini! Lee wrote on January 11, 2008 06:47 AM: Comdex did not leave because of anything Vegas did. Vegas went out of it's way to provide for Comdex. We had been involved with Comdex for over ten years and watched the new owners run it in the ground. After 911 the show failed and never made a comeback. God, if you all you saw was TV's, Car Stereos and knockoffs you where at Kmart, not CES. You really need to get a life. GOD wrote on January 11, 2008 04:11 AM: I attended and thought it was one big joke. 1/3 new TVs 1/3 car stereos 1/3 electronic knockoffs Totally worthless and extremely overcrowded.