Hoping to take the pulse of the Las Vegas
leisure market, Travel Weekly gathered airline, tour operator,
gaming, resort and tourism board executives at a roundtable
luncheon with Editor in Chief Arnie Weissmann and Publisher Bob
Sullivan at the Golden Nugget in downtown Vegas last month, on the
occasion of the fourth annual Travel Weekly Las Vegas Leadership
Travel Weekly Destinations Editor Kenneth Kiesnoski, roundtable
participants addressed hot-button issues such as growing demand for
luxury products; booming condominium construction; airport and road
congestion; and competition between the Strip, downtown and
outlying resorts in the Las Vegas area.
note: The original transcript has been edited for length and
Travel Weekly: September marks five
years since the benchmark event of 9/11. What's the state of Las
Vegas half a decade after that seminal moment? Is Vegas back on
Jicinsky, senior vice president, marketing, Las Vegas Convention
and Visitors Authority: We're more than back on track.
Visitor counts have rebounded, hotel occupancy is ... about 90% ...
and we're seeing huge investments ... in terms of not only new
properties and projects ... but also continued re-invention, adding
new restaurants, shows and entertainment. We couldn't be better
positioned; 9/11 is behind us.
However, I'm not
sure the recovery was as quick on the international market as it
was on the domestic front. From a marketing and branding standpoint
... we probably put fewer resources in the international markets
over the last five years than we would have if 9/11 did not
TW: Has this year's fuel crisis been a
factor at all for inbound tourism to Las Vegas?
Stark, vice president, corporate marketing, Boyd Gaming:
Some locals properties have probably seen a little impact, but I
don't know if it's fuel as much as it's road construction between
here and Los Angeles. Interstate 15 has been in perpetual
disruption with construction projects on the California side of the
highway. That's going to have a serious effect on our ... drive-in
I would say,
though, that our fly-in business continues to be strong. Our
Hawaiian business remains fairly strong, and Allegiant Air has
created an opportunity in some of the second- and third-tier cities
they serve. They feed a lot into Las Vegas. They're a low-fare
airline, privately held, and they're actually making
Moo, vice president, hotel operations, Golden Nugget Las
Vegas: We've seen a change in booking patterns; the window
is a lot shorter. I'm not sure if it's gasoline prices. But it
seems people tend to postpone even further now because gas prices
are changing dramatically over the course of time. Normally, it's a
seven- to 10-day window. It's now three to five days.
Brunelle, senior vice president, hotel sales, marketing and
distribution, MGM Mirage: It hasn't necessarily had an
impact on long-term travel. Seasonally, I agree things have
shortened up somewhat in the summer, but it's not unlike any other
It's not as it
was with 9/11; booking windows were ridiculous at that point
because you were trying to get anything you could last-minute. From
our perspective, there's nothing unusual this season.
TW: Does the booking window for Vegas
differ from other destinations for tour operators?
Christ, vice president for sales and marketing, US
Airways: Yes, we find that Vegas is a bit shorter, but
it's not what it was right after 9/11. But it's a bit closer than
we find for the Caribbean or Hawaii. On
the fuel side, yes, fuel has something of an impact on an airline.
On one hand, it's surprisingly not as big a problem as we expected,
and that's because fares have gone up. Demand is quite robust
nationwide right now, and Las Vegas is no exception.
In Vegas, we now
have as many flights as we've ever had; we've recovered
unquestionably from 9/11. We have cities where we'd like to add
nonstop service to Vegas, and we can't because we don't have any
more [airport] real estate and we have reached the point of being
gate-constrained. The airport is working really hard on it. But
it's a high-class problem to have.
TW: When you talk about running out of
gates, are you including slots you inherited in the merger with
Christ: US Airways was obviously quite
small in Las Vegas. As this combined entity, we are tapped out on
TW: What, if anything, can the LVCVA
do about airport capacity in Vegas?
Jicinsky: The airport is aware of the
issue and is in the process of responding. They just opened the
third set of D gates in Terminal 1, and they're working on the
fourth. They've also started Terminal 3, which will add another
nine to 13 gates. It's a combination of not only gate space but a
timing issue of when it all comes on line.
In the long term,
they also are moving very quickly on the second airport, which is
to be located [at Ivanpah] about 25 miles south of Las Vegas on
Christ: From US Airways' perspective,
McCarran is arguably the best-run airport in the country, and they
are absolutely aware of the issues. They've been very creative. We
could have tapped out a long time ago if it wasn't for their
Dimond, vice president, hotel operations, the Venetian: A
few months ago, the Venetian launched "speed check-in" for guests.
McCarran Airport approached us to assist them in handling how to
process the guests passing through. I think we have all been at the
D gates, where there are long lines for security when, for example,
big shows are breaking up and it's a major departure
The airport is
reaching out to the hotel community. We're working on processing
[outbound] luggage at the hotel; therefore, guests can enjoy our
facilities longer and go the airport just an hour before a flight.
Right now, we only have one airline on board, but I believe there
will be one more hotel participating soon.
TW: Does airport congestion impact
your development plans? Can you provide a quality vacation
experience if you add a lot more rooms into your
Stark: Boyd Gaming and MGM Mirage have
made huge commitments to the future with Echelon Place and Project
CityCenter. We're going to add 5,300 rooms in four hotels. We
wouldn't be doing that if we didn't think the rest of the
infrastructure could keep up.
However, I will
say that we're getting to a point where, with the price of fuel and
road disruptions, we need to start thinking about rail service and
alternative modes of transportation.
TW: A Sun Belt city, Las Vegas is
car-dependent and often choked with traffic. However, you do have a
new monorail. Is public transit the way to address
Jicinsky: It's a combination. It's working
with the Taxicab Authority to make sure there's enough taxi
medallions out there. It's working with the monorail to make sure
it is running efficiently and effectively ... and whether there's
an expansion program. And it's working with limo companies as an
alternative form of transport.
Brunelle: In terms of MGM Mirage's vision,
we're going to have monorail transportation between the Mirage,
Project CityCenter and the Monte Carlo, and we're looking at
extending that to New York-New York. So it's also individual
companies looking at how they can connect their resorts, even if
it's not the public sector with the monorail.
TW: Do visitors complain about the
impact of congestion on the Vegas experience?
Stark: The old attitude was that if
[guests] leave casinos for more than a half-hour it better be just
to get a hot dog. They didn't want them moving around. Traffic
congestion is an issue, but I think people understand that when you
go to a place where everybody wants to be, it's crowded.
TW: So it's not at a point where
people would avoid Vegas because of the crowds?
Pomerantz, president and chief marketing officer, MLT
Vacations: We do hear from our customers that the hassle
factor is increasing. Taxi lines, trying to get into restaurants
and getting up and down to the Strip can be quite timely -- or
I don't know that
everybody is expecting that to be part of their experience. The
lines! It can take you 10 minutes to get to your room from the
lobby. So we hear complaints from some of our customers.
Moo: It's the cumulative effect of the entire stay and
experience. By the time visitors get to their hotel and stand in
yet another line, that's the breaking point. We need to expedite
the experience and distract them from the fact they are waiting,
giving them something to do in that period that enhances the guest
Pomerantz: I think the expectations of
customers have changed as product has improved and prices have
increased. If you're paying a couple of hundred dollars for an air
seat and a couple of nights at a hotel, you may be willing to put
up with a little bit more hassle. But if you're paying several
hundred dollars more, you're less willing to put up with what you
consider substandard service.
Dimond: At the Venetian obviously we have
a different market segment with the conventions at the Sands Expo.
If taxi lines or transportation times are a challenge to the
leisure traveler, it also is an issue for show organizers. We hear
a lot of complaints about that. But we're working on different
alternatives. We now have shuttle buses from the Expo to two or
three different hotels. It is an issue, and it's more organizers of
conventions than individual attendees that are raising
Stark: When you look at how Vegas stacks
up to other convention cities like New York, we're very
competitive. Because this is a tourism-dependent economy, the LVCVA
has been careful about watching the infrastructure.
TW: Las Vegas looks like a forest of
construction cranes. Given constraints on resources due to a desert
setting, is there an overarching master plan for
Jicinsky: There certainly are challenges
with our growth, but there is a countywide master plan. We do have
what we call a "gaming red light district," which states a plan for
where new casinos can be built and how big those casinos can be.
That said, we are a community of five different municipalities, and
each has nuances related to its master plan.
TW: Do the Strip, downtown and
outlying resorts such as Lake Las Vegas comprise one destination or
are they starting to compete?
Jicinsky: More than our becoming
competitors with each other, we'll become more successful at
tapping into market segments we were never able to before. So, as
Lake Las Vegas and Summerland Resorts continue to grow, we'll
become more competitive with Phoenix and Palm Springs [Calif.]. I
don't think we're going to cannibalize ourselves. We're reinventing
and providing product to market segments we didn't reach
Brunelle: You have competition between
properties within the same company because they were built to
compete with each other. What competition does is make sure we
continue to reinvent and reinvest. It's not necessarily about a
master plan, it's taking a look and it's asking what customers
Pomerantz: From the operator perspective,
there is an opportunity to do some things that are different with
downtown and outlying areas. As we go and sell Lake Las Vegas in
the Midwest, it competes against Palm Springs and Scottsdale
[Ariz.], better than the Strip does. So we're excited to see
efforts promoting those destinations because it will generate more
demand from people who wouldn't be attracted to the
Stark: At one time, the old nine-story
east tower of the Stardust was the tallest building in Las Vegas.
We are now talking about doing 40- and 50-story condos. The next
shoe to drop will be the condos and how they affect us.
Moo: We're dependent on the condo boom here in downtown
because a lot of the proposed buildings will be going up around us.
We've taken the ball and run with it by spending $250 million here
over the next two years, renovating the property and bringing it
back up to status. The Golden Nugget itself is an institution, but
we're hoping to lead a [wider] revitalization downtown. We're
trying to develop a destination property to bring people downtown,
to allow it to compete with the Strip.
TW: When people hear condo, they think
luxury. Is that where the growth is? Will Vegas still offer
affordable, midmarket vacations?
Brunelle: In terms of the affordable Las
Vegas, there will always be that component. You're looking at a
$500,000 investment, minimum, for someone to purchase a condominium
on the MGM Grand campus. Many want to buy a condo as an investment
so that they can enter it into a rental pool. So basically it
becomes an extension of the MGM Grand.
You're able to
come into a non-gaming, residential environment, but it's connected
by walkway directly to the MGM Grand so you can experience all
[resort] components. We see a great opportunity to expand Vegas'
reach at that luxury end. We're also going to have a residential
program at Project CityCenter. The last numbers I saw were for a
2,000-unit property to sit between the casino at Project CityCenter
and the Bellagio.
Jicinsky: While I agree that luxury is one
of the fastest-growing segments, it still is a segment. We have
10,000 rooms downtown in a specific market category. We have 15,000
rooms in the motel category. As a piece of the pie, they may become
smaller, but it's still is a percentage. About 70% of all hotel
rooms are on the Strip, but the flip side of that is that 30% are
in other areas. We're confident we'll continue to have something
TW: Are operators finding the emphasis
on luxury is having an impact on business?
Pomerantz: In our business we love the
luxury segment. But I do have some concerns that we're not going to
have an affordable product for first-time or more budget-conscious
There may be a
lot of motels in town, but I don't know that if you're sitting in
Peoria you're going to find a 30-room motel off the Strip to be an
acceptable option vs. other destinations.
Brunelle: Let's keep in mind that
Excalibur and Circus Circus are still here.
Pomerantz: But the Riviera and the
Stardust might not be. A lot of things are happening that are
specifically taking that category of rooms out of the
Brunelle: If the consumer is someplace
else, we'll adjust our marketing as we have in the past. It depends
upon where consumers want to go. And they vote with their
TW: Are visitors now coming to Las
Vegas more for the shows, dining and attractions -- or business --
than for resort gaming?
Brunelle: For the first time in history,
more than 50% of revenue is from nongaming [activities]. If you
look at resorts like a Bellagio or a Wynn, 60% to 65% is nongaming
revenue. Some properties can be more dependent upon gaming and some
less. Depending on your market, you either need it or you don't --
Dimond: In 1996, Las Vegas was 15th in the
U.S. for trade shows. We are, since last year, No. 1. We have 38 of
the top trade shows in the U.S. Other cities cannot provide what we
Stark: It's repositioning everybody's
attitude, whereas before it was primarily driven by gaming.
Businesspeople understand that Las Vegas is an entertainment
experience that encompasses not only gaming but also shows and
other recreational opportunities such as golf or going out to Lake
Powell and Valley of Fire State Park.
TW: Are families still coming? Or is
Las Vegas once again all about adult escapism?
Pomerantz: The beauty of Vegas is it
appeals to almost every market segment. There are resorts with
pools and beaches that do attract families. And the corporate
meetings and trade show markets are here as well as bachelor
parties and destination weddings. Las Vegas benefits hugely from
geography: You can travel here and be in your hotel within
four-and-a-half hours from anywhere in the U.S. You can't do that
in San Francisco or Atlantic City.
TW: There's a trend toward direct
sales, particularly via the Internet, instead of using industry
intermediaries. Do you still see travel agents as part of your
Brunelle: Operators such as US Airways
Vacations and MLT Vacations help us extend our marketing reach. The
travel agent is still an important part of the business. We
continue to educate agents about our resorts; they are an important
distribution channel. We've tried to "right-size," based on the way
the consumer wants to purchase. If consumers decide they want to
purchase a particular way, we're going to make sure we have enough
inventory in that channel.
TW: The average age of the Vegas
visitor has dropped. Is there a connection to the move toward
Jicinsky: Over the last five years, the
average demographic age has gone down a little bit. The Generation
X group now has Las Vegas on their radar screens, and we're seeing
significant growth in that 30-something age range. At the same
time, baby boomers are reaching retirement, so we see a huge growth
in that segment, as well. The two are working in tandem.
Pomerantz: To tie those issues together,
we're focused around the travel agent, and we're doing training for
agents about Vegas for the 30-and-under crowd: what to do and how
to sell it to their customers.
TW: Have Vegas hotel properties had to
tailor product to fit boomer or Gen X tastes?
Brunelle: There are things that have been
added that cater specifically to those crowds. Depending on the
property, you make the conscious decision to go after the
particular segment. All of our resorts have something for a
particular generation, but it's not necessarily that we're
targeting [one group].
TW: But wasn't rebranding Treasure
Island as TI an attempt to completely reposition that property
towards the younger set?
Brunelle: It was. It was also to
communicate that the family element had been removed completely.
The name Treasure Island was something that conjured the movie, the
book. We want to make sure that we have a better blend of folks --
and folks that aren't bringing children -- because it's not a place
to go and have a family vacation, per se.
Moo: We identified our customers being baby boomers. We'd
like to be all things to all people, but our gaming profile lines
us up with being slightly older. So we have looked at, through
renovations, what would attract those customers yet have universal
appeal. There needs to be an alternative to the Strip in terms of
the experience customers have. We are positioning ourselves, as an
alternative for people who want to come in and throw money into the
Stark: With the upgrade of the Fremont
Street Experience, it's now an incredible show downtown. We're
hopeful the monorail will get extended downtown. In the interim,
the Deuce [bus] is helping. In the summer, I am surprised to see
people packed in those buses like sardines, going up and down the
For more details on this article, see "TW Leadership Forum takes the pulse of Las