Las Vegas Profile: World’s Hottest Market

“Las Vegas itself is a microcosm of the rest of the country,” MGM Resorts’ Chris Baldizan said. “It’s over-rewarded and then over-punished, which makes us open to change and reinvention. Over the last 10 years, revenue has shifted in diversity from 67 percent coming from casinos to non-casino events like entertainment, food and beverage, hotels and conventions.

“Competition now is not only for the entertainment dollar but for content. Content is king, and we’ve gone after content.”

One of those competitors, Jason Gastwirth of Caesars Entertainment, concurred.

“We’ve seen the transition. When the high-end restaurants came in, there was an opportunity to drive profits. It became more attractive for artists and chefs to come to town,” Gastwirth said. “Competition makes us better. On this panel, some of the top promoters in the world focused on this market as an attractive place to set up.”

In a reference to artist residencies that have become a staple of Las Vegas entertainment, Gastwirth added, “In Las Vegas, the world can come visit this market rather than the artist travel the world.”

Beckham is an obvious fan of Vegas residencies – not just those of Celine Dion, Elton John, Bette Midler or Santana, but country artists have done well, too.

“Reba (McEntire) had this idea to do something cool in Las Vegas [with Brooks & Dunn]. We’re now ending the first year, and into the second term of the deal. It just grossed over $10 million in Las Vegas,” Beckham continued. “As Ronnie Dunn would say, he’s found a honey hole.”

Britney Spears has brought a younger audience to Las Vegas with her residency. Live Nation Las Vegas’ Kurt Melien noted that between performers Spears, Jennifer Lopez, Backstreet Boys and nightclub EDM shows, the median market age has dropped from 51-47 years old.

Not only has the median age dropped, but C3 Presents’ Kristen Reynolds also notes that the younger demographic coming to town has an average income of more than $100,000.

“They are going shopping and to restaurants as well as to shows,” she said. An advantage for artists is that doing a Vegas residency doesn’t preclude touring as well. An example is Bruno Mars, who has a theatre show at the Park Theatre in the Monte Carlo resort but can book a completely different show as an arena tour stop at T-Mobile Arena as well.

“The more things we do, the more people talk about it,” AEG Live’s Bobby Reynolds said. “It is still a challenge. The city does offer sophisticated shows at smaller theatres. Look at Wynn, for instance. We’re doing John Fogerty at Wynn. Properties are recognizing it’s an intelligent way to bring people through your properties.”

With more residencies, however, is there fear of oversaturation?

“Maybe,” Gastwirth hedged. “Not yet. We’ll be in good shape. We have a responsibility to make sure the content is great, and promoters, venues and artists are taking that risk. We’ve seen a lot of excitement, still.”

One topic panelists were excited about is the number of festivals to call Las Vegas home in recent years, including Electric Daisy, Life Is Beautiful, Route 91 and Rock In Rio.

“I can only speak for Route 91,” Live Nation’s Brian O’Connell said. “We aren’t trying to compete with things. You can’t compete with Vegas. The ambiance is part of 91. There’s those big casinos. People bring their money and leave it there.

“Do other fests coming to Las Vegas compete and fail? I don’t know. Life is Beautiful seems to be doing fine. They’re not competing with casinos. They are out at the freeway. Chris [Baldizan] takes a helicopter out there.”

O’Connell noted, however, “If you were to go to the residencies and try to compete, you’re going to lose.”

Otherwise, it seems content creators are happy to see the Vegas pie get bigger.

“From House of Blues to the Venetion, fests are just another form of content,” Baldizan said. “What we’ve created in Vegas is an atmosphere where people expect experience. We had 42 million visitors last year. We’re not building new properties like we were 10 years ago. Content is a big part.

“We made substantial investment in festival sites. The Rock in Rio site got $20 million,” he continued. “For now, if this is an experiential crowd with money, that’s what they want. All this is great – we’re still in business to drive bodies to rooms. And those things that drive the occupancy rate up make the money.”

Reynolds gave credit to marketing efforts in Las Vegas, particularly the genius who came up with “What Happens In Vegas.”

“There was a big shift in perception in 2003,” Reynolds said. “There is something other than gambling in Vegas. ‘What stays in Vegas.’ It was the beginning of a huge shift in terms of marketing. Life is Beautiful is not trying to compete with casinos, and not competing with other festivals, either. It’s not trying to be Coachella. But you need to be on the cutting edge of content to keep up.”

With the recent emphasis on more and bigger is better, is there a concern buildings will begin to cannibalize each other?

Beckham acknowledged not every act can fill an arena, and there is rumor of a fourth arena on the drawing board in Las Vegas.

“Everyone said we didn’t need a third arena,” Melien said. “Especially the people who own the other two,” Reynolds said, laughing. O’Connell may have calmed some fears about too many arena seats and not enough butts to fill them.

“In my day job, we now consider it a tour stop. We are talking about Vegas like it’s a vacuum here.

“Now, Vegas is more a strategy from our viewpoint.”

And next, it may become a sports magnet as well, with hockey already on the horizon and approvals from all but the NFL for a football team relocation to an approved stadium.