Will CES be leaving Las Vegas?

The current agreement between the Consumer Electronics Show and the Las Vegas Convention and Visitor’s Authority runs out after the 2011 show, and there are rumblings that the show organizers will pick up and leave, possibly for Chicago, Macau China or even Dubai, starting in 2012.

While Las Vegas is the number one tourist destination in the United States, conventioneers are complaining about the gouging they’ve been receiving in recent years when they’ve come to visit for the annual Consumer Electronics Show.

An article in the magazine In Business Las Vegas says that companies like HP had to leave staff behind because of skyrocketing room rates and other “fees” levied by hotels to large companies booking blocks of rooms. The Consumer Electronics Association (which runs CES) reports that costs have gone up 365% in the past few years.

Part of this is because Las Vegas is becoming more of an upscale destination. “Cheap” hotels like the Frontier and Stardust have been imploded to make way for the next generation of mega resorts like Echelon ($5B USD), City Center ($7.4B USD), and Encore (“only” 2.1B USD). The cheap hotel room is becoming a thing of the past in Las Vegas, and even the traditionally inexpensive resorts are increasing their prices due to the lack of competition on the low end, as well as sky high occupancy rates, hovering around 91% (contrast with the national occupancy rate around 60%). However, these facts do not combine to account for all of the price increases.

Moving the convention to another city may sound like a good idea at first, however it may be difficult to find a city that can host 140,000 conventioneers and exhibitors in terms of both convention space, hotel rooms and transportation. Granted, anyone who has been to CES in Las Vegas knows that transportation can be very tough (long lines for busses, taxis and the monorail) to and from the Convetion Center and between hotels. I would hate to think how tough it would be in another city (the El in Chicago, busses in Orlando, etc). By 2011, its possible that the monorail could have more capacity as well as a link to the Airport, and the construction of a third terminal at McCarran International Airport will make flying in and out a more pleasant experience (not perfect, but much better with added security checkpoints, baggage claim areas and ticketing counters in addition to more gates).

What would be more likely to happen is that the Las Vegas CES will be scaled down in size, perhaps to 60,000-75,000 people and shortening the expo from four days to three. In addition, other CES shows around the world would be scheduled more frequently. The goal being to be more flexible with shows in terms of attendance, location and the targeted audience.

The Las Vegas casinos wont care much however, as occupancy rates are sky high, reducing the number of visitors won’t do much as they seem to be able to fill up rooms regardless. Perhaps I should rent out my extra room to CES visitors, much cheaper than a hotel, though the 45 minute taxi ride to the convention center could be a problem.