New Revenue May Translate to Blitz of Las Vegas Ads - Tuesday 12th of April 2005

Flush with an extra $25 million in room tax revenue, the Las Vegas Convention and Visitors Authority board will next week discuss a revised budget that calls for an extra $2.5 million advertising blitz aimed largely at three U.S. cities.

Proposed changes also include shifting $5.6 million toward the authority's capital improvement fund, as well as a more than $944,000 payment to reduce long-term debt.

When its fiscal 2005 budget was approved in May, the convention authority expected to collect approximately $146 million in taxes from patrons of Clark County lodging establishments whose stays fell between July 1, 2004, and June 30.

But better-than-expected visitor volume and room rates produced added revenue, and the authority now expects this year's collected room taxes to be more than 17 percent better than last year's projection.

"We always budget very conservatively," Brenda Siddall, the convention authority's finance director, said Wednesday. "Based on our year-to-date collections, we can now forecast (year-end room taxes collected) will be about $171 million."

Pending board approval, Siddall said the authority would like to carry about $13.45 million of its latest room tax bounty toward the next fiscal year's budget.

In the short term, however, plans call for using some of the new tax revenues to finance a concentrated advertising push in Denver, Detroit and Seattle -- three of the seven U.S. cities convention authority President Rossi Ralenkotter in January identified as keys to increasing Las Vegas' domestic travel share.

In addition to another $950,000 commitment to television advertising and media promotions in those cities, the authority also wants to spend $450,000 on its widespread multicultural marketing efforts this May and June. Plans also call for an additional $650,000 expenditure promoting summer travel in Southern Nevada.

When the authority's fiscal 2005 budget was approved in May, it called for just $66.7 million in advertising expenses.

An additional $9.4 million was added in November after fiscal 2004's room tax revenue was about $14.1 million more than previously projected. Tuesday's proposed $2.5 million bonus would further push this year's actual advertising budget to $78.6 million.

The convention authority's contracted advertising agency, Las Vegas-based R&R Partners, spends about 72 percent of that budget purchasing broadcast ad time and print space from various media outlets, Billy Vassiliadis, R&R's chief executive officer, said Wednesday. After salaries and other expenses, the agency's profit margin on the convention authority ad account is typically 2.5 percent to 3 percent, he added.

The authority's 13-member board is slated to vote on the proposed budget changes at its next monthly meeting scheduled for 9 a.m. Tuesday at Cashman Center.

The board will also be briefed on a tentative budget for the 2006 fiscal year, which begins July 1. Early projections call for $183 million in room taxes, up 7 percent from this year's revised total.

Plans call for the authority to next year spend more than $80 million on advertising and an additional $33.8 million on marketing, up 2 percent and 4 percent, respectively, from this year's revised budget forecast.

A public hearing on next year's tentative budget is scheduled for May 19.

The convention authority's mission is to promote tourism and business travel in Southern Nevada. Its operations are funded primarily through portions of a 9 percent room tax paid by guests of Clark County hotels, motels and other temporary-lodging establishments.

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