Travel Weekly brought together a group of tour operators and
hotel executives in Las Vegas for a discussion about Nevada's
gaming capital. The meeting took place before the events of Sept.
• Bruce Bommarito, executive director -- Nevada Commission on
• Fletch Brunelle, vice president of sales and marketing -- MGM
• Michael Gasta, vice president of sales -- Park Place
• John Marz, senior vice president of marketing and events --
Mandalay Resort Group
• Robert Purdy, director of sales and marketing -- Hyatt Regency
Lake Las Vegas Resort
• Rossi Ralenkotter, vice president of marketing -- Las Vegas
Convention and Visitors Authority
• Jack Richards, chief operating officer -- America West
• Diane Steenman, chief operating officer -- Lowestfare.com
• Dan Westbrook, president -- American Airlines Vacations
Alan Fredericks, vice president/editorial director -- Travel
FREDERICKS: Rossi, I wonder if you could
explain how Las Vegas positions itself in the market.
RALENKOTTER: We've evolved from being a West
Coast gaming destination to a full-service resort and convention
destination that appeals to domestic and international visitors and
What's make it possible for us to attract close to 36 million
visitors a year is the fact that we have something for everyone.
There's something that travel agents can market to each of their
customer segments, whether it's a special event, a large or small
convention, corporate meetings or incentive travel.
RICHARDS: I've been doing business in the city
since 1978, as it has grown from a gambling town to a full-service
resort. Gambling is not the only reason they come here. They come
for shows, spa, golf.
STEENMAN: We are wholesaling Las Vegas and it's
become our largest destination, growing at 30% every year. It's
really a product everyone wants. The consumer is finding it can
meet every price point. There aren't many destinations that can do
that all in one.
WESTBROOK: As Rossi described it, we've seen
Vegas evolve from what was a relatively single-purpose destination
to a very broad-based host of activities and attractions. One of
the satisfying things to us is that Las Vegas typically appeals to
the kind of customer who comes to American Airlines Vacations.
Given the demographics of our customers, we try to offer a broad
range of product and Vegas is particularly good at that. It has a
full range of accommodations and activities.
With the agents actively participating in directing what is
appropriate for their customers, it works very well. I think the
agencies also have been active in getting that message out.
FREDERICKS: Have the changes in Las Vegas
changed the way you market the product?
WESTBROOK: Absolutely. We market the shopping,
the dining, the entertainment -- unlike the old days when it was a
BOMMARITO: As the primary fulfillment agency
for information requests, we can see how the growing diversity of
Las Vegas has increased not only the number of requests but the
nature of the requests. So we see many more requests for
information about things like shopping and dining options.
FREDERICKS: It seems to me that Las Vegas has
become a kind of year-round World's Fair city. It's almost as if
you were in something like Epcot Center but with the addition of
the casinos and entertainment.
MARZ: One difference is that our customers
don't stay here as long as they do at Epcot. If you look at the
length of stay of the typical Las Vegas visitor, it's 2.7 or -- if
you stretched it -- three days. If you look at the length of stay
at any other resort destination, it may be five to seven days.
So when someone loosely says we are now a resort destination, we
are in many aspects but, in the research we have done, we
Our customers have told us that they don't have enough energy to
spend more than two or three days at any one of our places. It's
too much for them. We have a lot of eye candy here, we have a lot
of wonderful resorts and a lot of amenities, but people can't stay
GASTA: Thanks to the growth of the city over
the past few years, we've seen it move from gaming to include
entertainment and shopping and, today, the city really is promoting
It couldn't be more timely for our properties because people who
come here do have an emotional experience.
FREDERICKS: Robert, tell us a bit about Lake
PURDY: We're located 16 miles from the Strip.
They've made a lake out there that is three miles long and a mile
You've got the best of both worlds. You can come to Vegas and
take advantage of the Strip and enjoy our golf, the spa and our
restau-rants. There's a Ritz-Carlton being built for December
We appeal to an audience that might not have considered Vegas in
the past. Our emphasis is not gaming. We do have a casino but it's
only 10,000 square feet.
FREDERICKS: Rossi, is the development of Lake
Las Vegas a sign of what we understand to be that Las Vegas is
expanding its geography?
RALENKOTTER: It's really more the diversity of
the product and looking for new market segments. For future growth,
we're going after the convention and incentives market, corporate
meetings, special events, along with the inter-national market.
Other hotel companies have looked at Las Vegas and want to have
their product here. Some of those products are very diverse.
What's happening is that some of the product that was in Palm
Springs, Scottsdale and so forth is now coming to Las Vegas. By the
end of this year, we'll have about 128,000 rooms. By the end of
next year, it will be about 132,000.
FREDERICKS: You mentioned meetings and
conventions. Can you put that segment in perspective?
RALENKOTTER: If you look at the year 2000, it
was about 11% of our market share, close to 4 million delegates and
close to 4 billion dollars in revenue for the community. It's like
the Cadillac of our product line. It allows us to position business
midweek, and first-time visitors are a part of that mix, so it's a
very important part of what we're doing.
With the new developments, three of the seven largest convention
centers in the U.S. will be in Las Vegas. We have the ability to
host groups of 20 and groups of 250,000.
MARZ: We're adding about 1.8 million square
feet of convention space. The revenue from rooms is so important to
us as a company that we needed to figure out a way to maximize that
As a city, not just Mandalay Resort Group, we have something for
the convention customer that nobody else in the world can match,
and that is that we are very affordable.
FREDERICKS: Jack, can you describe the
RICHARDS: We move about 500,000 people a year
to Las Vegas on tour packages and use about 1 million room nights a
year. We're actually selling almost as many midweek as weekend
rooms. Our business is up substantially year over year.
Our average length of stay is 3.7 nights, considerably higher
than the average stay in Las Vegas. We move a significant number of
people from the East Coast, who stay almost four nights.
In good years, it's very difficult to get hotel rooms, so we
applaud the building of new resorts. In slow years, we have
adequate access to hotel rooms. As a rule, over the past two years,
we've requested and received additional rooms from these
WESTBROOK: We don't generally have difficulty
with room inventory. We understand the trade-offs a hotel has to
make on a daily basis between the return they get on a room in
different distribution channels.
As a whole, Las Vegas hotels manage those trade-offs better than
some other destinations. They make sure that everybody has enough
to stay in business and to retain strong relationships with the
destination, and, at the same time, take care of the interests that
they have and the financial success of their properties.
FREDERICKS: Can you give a status report on
electronic vis-a-vis telephone bookings coming in from the
WESTBROOK: We're at the point now where 99
percent of our bookings for Las Vegas are through the CRS, which is
exactly what we think it ought to be, both for our purposes and for
the agency's purposes.
RICHARDS: We're different because of the
different markets we serve. We have a much lower percentage of
electronic bookings. We're not in all the systems, only three of
them, so our percentage is much lower. Our overall mix of
electronic business is 50%.
WESTBROOK: We're available now through all the
systems and through an agency Internet site. Over the course of the
last 10 years, we've done everything we could to empower the
agencies to use those channels because we believe it is in their
best interest, as well as our own, to book not only Las Vegas but
other packages, as well.
One continuing challenge we have is the terminology. When you
talk in terms of "packages," it conjures up a host of limiting and
FREDERICKS: Is the term "packages" a
WESTBROOK: I think it is. We talk in terms of
"individual vacations." Our responsibility is to give the agency
community the ability to absolutely customize any vacation package.
Everything we sell is sold on a component basis, partly because we
believe that the unique role of the agent -- that nobody else will
ever be able to automate -- is in matching the travel experience to
In the old days, you had to leave on a Thursday and come back on
a Sunday, or you had restricted days of travel. Now you travel when
you choose in terms of the day of the week and the time of the
flight. You travel the class of service you want, you pick the
hotel you want, the type of room, the number of nights --
everything about the package can be tailored to the customer.
STEENMAN: We work directly with consumers plus
we do have packages that agents can sell, and I concur about the
flexibility. In our case, as an Internet company, we find that the
customer can learn about the various options on the Internet and
then book there with us.
FREDERICKS: Let's turn to the position of the
retail travel agencies in your marketing effort.
BOMMARITO: We market a lot to the retail travel
agent on a statewide basis. We feel that they are a strong
component and always will be a strong component.
MARZ: The travel agent is important to us.
There were a lot of people who said a year or two ago that travel
agents wouldn't be around in five or 10 years. I don't believe it.
I think travel agents play a very valuable role for their clients
and they have access now to in-formation because of the Internet
that they never had before. So they book products differently
We think agents will still be important five years from now.
It's a matter of how they get their information and how they choose
to do business with wholesalers and with us. That dynamic is
changing and we're changing with it.
PURDY: Travel agents are a critical component.
Their awareness of our resort, because we're new, is very
Hyatt puts a big emphasis on the retail travel agent with a
national sales force that calls on them in every feeder market
possible. We do blitzes in every major city and every Hyatt resort
gets involved in those. We distribute collateral not only on Las
Vegas but other Hyatts as well.
FREDERICKS: Hotel people tell us that agency
business is important because it comes in at a higher rate than
business from other channels.
BRUNELLE: We looked at that recently. The
highest rate, the rack rate, is most likely to come from people
calling us directly but the business that comes through the CRS
mimics that very closely.
From our perspective, we look at the travel agent sector as a
two-pronged approach, selling directly to the agents and through
the tour operators. We see agents as a good conduit to talk to the
We find that retail agents are more productive with closer-in
markets and we need the tour operators for markets that are further
FREDERICKS: How have the origin markets changed
for Las Vegas?
RALENKOTTER: The biggest shift has been the
southern California marketplace. Even though the numbers of people
coming from southern California have increased, the market share
has dropped from 50% 20 years ago to 30%.
East Coast and international market share have increased. The
ease of getting here from cities domestically and internationally
has brought about this shift.
To continue the growth, you need to go out and cultivate new
customers. Each year, about 25% of our visitor base are first-time
visitors. That has been part of our success story.
Part of that is because of the new product that the hotels have
presented. That's part of the reason we run 90% occupancy.
Coming back to travel agents and wholesalers, 31% of our
business comes from them. That's 10 million visitors a year, so the
agents and wholesalers are very important.
GASTA: Agents play a large role for our
product, especially in giving a comfort level to people who have
never been here and may be intimidated by the size of the city, the
amount of hotels, where they should stay, what they should do and
I think FIT buyers are using the Internet to study what they
should be doing but then go and confirm that with their travel
agent, and get a vote of confidence from them.
FREDERICKS: Let's talk about how the Internet
fits into the picture.
BOMMARITO: It provides a lot of information and
makes the consumer, both those who use agents and those who don't,
much more educated and knowledgeable.
On a statewide basis, the hotel asso-ciation sees Internet
reservations growing significantly.
STEENMAN: I think travel agents have a
tremendous opportunity here to become Internet-savvy. But some of
them are reticent to allow their agents to use the Internet.
I see it as an opportunity for them because the people who use
the Web will get a lot of information there but will want to use
the luxury of a travel agent to do the work for them.
MARZ: We're doing so much business over the
Internet and haven't even scratched the surface of its potential.
Our customers over the Internet are not so much Californians, they
are people from the Midwest, the Southeast and the Northeast. Maybe
they never got to us before, but they are coming to us on a direct
basis where we used to rely more on the wholesale segment.
There are so many different distribution channels within the
Internet. There are our wholesale partners; our retail partners,
such as Travelocity; there are the LasVegas.coms, and all of the
other portals that bring people to us.
You have to look at all the distribution channels and figure out
how they work for your own business. In our minds, whatever is
happening today will be different tomorrow.
PURDY: One of the things the Internet does is
that it allows for rapid implementation. You don't need to be in a
consumer publication three months in advance. You have inventory
you need to sell and you can do it.
Hyatt is launching E-meetings and we're going to have live
inventory for all of our hotels to book five to 100 rooms on
RICHARDS: We have a bookable Web site, and 97%
of what we book there is for Las Vegas. The amounts are in the
millions of dollars. The booking engine is very important. People
want to get on the Internet, book and get off.
We have a separate commissionable Web site for agents at
Awvtravelagents.com. We register our agencies -- we do business
with about 13,000 -and we have the ability to pay different levels
of commissions there. When we launched a few months ago, 1,100
travel agents registered in the first 30 days.
WESTBROOK: We launched our agent-only Internet
site before we launched the consumer site. They can be reached at
AAvacations.com. There's an area within the home page for
We've recreated the booking system essentially with the CRS in
mind because that's what the agents are used to, and they can go
through it a lot more quickly. It's fully commissionable and open
to any ARC-accredited agency.
A lot of agents will use the site to gather information but
they'll go back to the CRS to book it. I think people basically are
comfortable with the CRS. We've invested a lot of money in CRS
training that has created a comfort level.
BRUNELLE: We have consumer-direct booking on
our own Web sites. The MGM Grand also has a travel agent area where
agents can put in their IATA number, book and get full commission.
We're evaluating how we can expand that to the rest of the
The Internet also is important in terms of capturing information
about consumers so, for example, we may use e-mail for our casino
customers and send them information in that vehicle.
GASTA: There are an awful lot of vendors out
there offering a wide range of products on the Internet.
In the meetings and conventions and travel agent markets, even
in casino marketing, the opportunities are great on the Internet.
We have five properties in Las Vegas. By the time we finish
rebuilding the Web site for the last one, we go back and start all
over again. We started with a small room-block segment and we have
to build on that weekly.
RALENKOTTER: Our site is Vegasfreedom.com and
we look at it as an information source and an advertising vehicle
both to our customers and to agents and wholesalers. Twenty-two
percent of our customers are using it to get information, and 8%
are booking Las Vegas on the Internet. We're even looking at it as
the way to certify travel agents so that they can become certified
Las Vegas sales people.
We want to give agents as well as consumers information on line
about shows, special events and convention information. We're even
looking at providing daily room availability in town.