March 2011 Issue • Volume 39 • Issue 3

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Looking forward to the
2011 Annual Meeting in Las Vegas

Integrating Business with
Pleasure in Las Vegas

Robert E. Lang, Brookings Mountain West-UNLV, and
Christina Nicholas, University of Nevada-Las Vegas

The idea that Las Vegas, whose modern origins are now the stuff of Hollywood legend as depicted in such films as Bugsy, The Aviator, and Casino, could qualify as a true world city seems a stretch. Most places achieve world city status by being financial, trade, or manufacturing hubs, or, as is the case with the biggest and most connected world cities, have a concentration of all three. Las Vegas took a different path to becoming a world city.

las vegas strip

In the early 1970s, Las Vegas was a one-trick town and gambling (or "gaming" in local parlance) was so stigmatized it existed only in Nevada. Over time, the gaming industry spread throughout the United States and worldwide. First Atlantic City, NJ, allowed gambling in the 1970s and then the floodgates opened. Soon people could gamble on riverboats in the Mississippi and off the Gulf Coast. In 1988, Congress¹ passed the Indian Gaming and Regulation Act, providing a regulatory basis for Native Americans to build and operate casinos—and they did, just about everywhere. Each time gaming expanded, some urban analyst or economist predicted the demise of Las Vegas. The logic seemed straightforward: Why come to Las Vegas when one could gamble a state over, or even a city over? History proved the widespread diffusion of gambling only induced a bigger appetite for even more gambling.

Las Vegas sought to stay ahead of the curve by offering a host of complimentary activities to go along with gaming. The city soon became one of the world’s largest venues for live entertainment, surpassing even New York City’s Broadway, and has added function after function related to tourism. Today people visit Las Vegas to experience world-class shopping, high-quality dining, sunny pool parties, exciting night life, and famously risqué entertainment. In Las Vegas, Elvis might "leave the building" at the end of the show, but he always seemed to come back.

An Adult Playground

Las Vegas has effectively branded itself as a relevant place to experience something outside the norm. In American culture, Las Vegas is considered a free-fire zone, where more edgy adult behavior is forgiven. The cultural narrative was further solidified in the public’s mind by the city’s marketing campaign "What Happens in Las Vegas, Stays in Las Vegas." Part of the campaign’s success is it plays off how most American adults view the Las Vegas experience. It is a wide open, non-moralizing, libertarian place where grownups go to have fun.

The city’s image as an adult playground has been a Faustian Bargain. It propelled the city’s tourism by promising fun, however, it opened Las Vegas to criticism by neo-Puritan Americans or smug Easterners who see the city as either decadent or at best a trivial, unserious place. In some ways, the cultural notion of Las Vegas has overwhelmed its function as a major gaming, entertainment and convention complex. The very elements that make Las Vegas Las Vegas may seem antithetical to the respectability of business. But on closer inspection it seems to work to the city’s advantage. The gaming and entertainment cluster constructed in 1970s allowed the city to expand to two other areas: airline connections and convention business. By the early 1970s, the city had enough tourist business to warrant non-stop links to most major cities in the United States. To encourage travel and tourism Las Vegas worked to keep landing fees among the lowest of any major American city. It is still relatively cheap and easy to fly to Las Vegas from almost any U.S. city, and new routes are being added to Asia and Europe as McCarran Airport finishes its first dedicated international terminal.

Work Hard Too

The presence of so many hotel rooms and the fact their use is cyclical with high demands on weekends facilitated the emergence of the largest convention business in the United States.² Most trade shows occur from Sunday to Wednesday nights and fill hotel rooms that would otherwise go empty if the city only catered to leisure travelers. Las Vegas’ capacity for conventions is now so great that the largest trade shows, such as the Consumer Electronics Show with upward of 150,000 attendees, have literally nowhere else to go, making the city a permanent annual feature in their industry.

In addition to accessibility and space, conventions thrive in Las Vegas because the turn out is always high. People enjoy coming to Las Vegas, even if it is to work. On any given week the city may be hosting the world’s experts in a particular industry. Yet, recognition for performing this vital function in a critical industry has thus far mostly eluded Las Vegas. Contrary to President Obama’s recent flip remark that executives at companies taking taxpayer bailout money shouldn’t hold meetings in Las Vegas, evidence suggests the city is really a place where trade show attendees work hard all day. According to Las Vegas convention officials, participants at Las Vegas trade shows spend more time on the convention floor than in any other U.S. city. The reward is that the nights are fun, which is a big advantage over conventions held in, say Disney World of Orlando.

In a counterintuitive way, Las Vegas nights may be equally important for building trust between potential business partners. People who make a night on the town in Las Vegas can really get to know one another quickly. It is a chance to see people with their hair down. In certain business cultures—especially Asian—there is a premium placed on seeing how people behave away from the office or board room. Insight can be gained from observing how a potential business contact handles him or herself placing bets at a blackjack table. The social bonding that occurs from a night partying in Las Vegas may provide an excellent basis for the kind of trust that leads to future business exchange.

The success of Las Vegas as a gaming-entertainment-convention nexus has given the city a global presence as the leading producer of services specific to gaming and mega-resorts. In essence, Las Vegas is to gaming what Houston is to energy—it is a command and control center in a global business. Las Vegas firms that specialize in building and managing mega-resort and entertainment complexes were often the first ones to build in the new gambling centers—from Atlantic City in New Jersey to Macau in China (which passed Las Vegas in total gambling revenue in 2006). It is anticipated these industries will continue to grow worldwide.

In short, when people think about Las Vegas it is the food, drink, and entertainment they remember. While this is some of what Las Vegas is about, the city also brings together industries, businesses and experts in a central place to make decisions that have far-reaching effects. Las Vegas has ingeniously positioned itself a place where business and pleasure are integrated.

Endnotes

  1. In 1987, the U.S. Supreme Court ruled in California v Cabazon Band of Mission Indians that as sovereign political entities, tribes could operate facilities free of state regulation.
  2. Nineteen of the 23 largest hotels by room count in the world can be found on the Las Vegas Strip. There is now over 10 million square feet of convention space in the Las Vegas Valley, including all of the space in major hotels on The Strip. The Las Vegas Convention Center, most recently expanded in 2002, accounts for about a third of the total.
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