Analysis: How to market Las Vegas

Analysis: How to market Las Vegas in the Oct. 1 aftermath

LAS VEGAS — In the weeks after the Oct. 1 Route 91 Harvest Festival tragedy, can the travel industry expect visitor volume to decrease, hold steady or continue a steady increase? Whether your firm is a travel agency, a tour operator or an airline, thoughts must be given to how marketing resources are allocated for this destination.

It was just over six weeks ago that Las Vegas experienced the greatest tragedy in its 112-year history. Travellers from around the world saw the news reports of the shooting tragedy at the Route 91 Harvest Festival: 58 people killed and 489 injured, the worse mass shooting in American history.

While our hearts go out to all those affected by this terrible event, as an industry we need to know what this means for Las Vegas as a destination going forward. Close to 43 million people a year visit Las Vegas, according to the Las Vegas Convention and Visitors Authority.

In an interview with Las Vegas Review-Journal, University of Central Florida economic professor Sean Snaith compared the mass killing with one that occurred in Orlando: the Pulse nightclub shooting attack in 2016.

“At that time, tourism experts voiced concerns about the Orlando area facing a decline in tourism. Orlando has the second-most hotel rooms of any U.S. city behind only Las Vegas. But in the year following Pulse, the Disney and family-oriented area didn’t see any change to its overall visitation numbers.”

While the long-term effect of the Pulse shooting on Orlando may have been muted, statistics from STR, a US based data analytics firm specializing in hotels, showed a slight decline of 1.3% in hotel occupancy in Orlando, a city with about 124,000 hotel rooms, for the first 11 months compared to the same period in 2015.

Looking at Las Vegas, we are just over six weeks past the tragic day and resort companies in Las Vegas are beginning to discuss initial findings regarding bookings.

Last month Caesars Entertainment CEO Mark Frissora told a group of investors in New York that business levels were returning to normal. “It’s fair to say we are cautiously optimistic about the rebound,” he said. “We think that occupancy rates across the Strip took a little bit of a hit the first day, the first week into the second week, but then every week it seems to change and improve.” He went on to further describe the MICE segment: “The meeting business itself is solid. There hasn’t been any cancellation of meetings that we’ve seen really for the rest of the year.”

Caesars Entertainment operates nine Las Vegas Strip area properties including the iconic Caesars Palace and the Flamingo.

During an earnings conference call Penn National Gaming weighed in on the situation. Penn National owns the Tropicana Las Vegas, which was the closest resort property to the Route 91 Harvest Festival. Jay Snowden, Penn National President, said; “Of the 35% increase in cancellations year-over-year (at the Tropicana), 80% of those were isolated to October and November.”

He went on: “If you add in December, it goes to 90%. At this point, it appears there will be very little impact going into 2018, but it’s still the first month post-event. It’s hard to say exactly how it’s going to play out.”

He also pointed out that group and MICE business remained strong, saying it was leisure visitors that made the most cancellations.

“The cancellations were largely in the leisure-online travel agency segment,” said Snowden. “In our group business, we didn’t have any cancellations and our casino block has held out very well. It’s really that leisure business that decided to cancel in the fourth quarter. We’ll see how it plays out in Q1.”

Boyd Gaming, operators of 11 Las Vegas valley hotel/casinos spoke to Wall Street analysts during a conference call as well. CEO Keith Smith told analysts that Boyd properties near the Strip experienced a slight uptick in cancellations in the days after the shooting, however, business quickly returned to normal.

Another indication of the possible strength of tourism to Las Vegas are plans announced since the shooting regarding either new construction or activity in long stalled projects.

The long-delayed Resort World project, being built on the site of the old Stardust resort, announced last month that they finally hired a construction management firm, W.A. Richardson for the project. Previously, Richardson was the general contractor for Mandalay Bay, Monte Carlo, the LINQ and the Cromwell. The project has received the initial construction permits from Clark County and construction cranes should be up and running by mid-December. When completed this should add 3,000 room to the Las Vegas Strip.

MGM Resort International has announced that they had purchased the WNBA’s San Antonio Stars and will be moving the team to Las Vegas. They will become Las Vegas’ second major league sports team as the NHL’s Golden Knights just started their first season at the T-Mobile Arena. The Stars will play in the 12,000-seat Mandalay Bay Events Center. Construction is also underway just west of the Strip on the NFL’s Las Vegas Raiders new stadium, which should be ready for the Raiders’ move to Las Vegas in 2020.

During Caesars Entertainment’s investor meeting the company announced they are starting work on a new convention center behind the Flamingo and the LINQ resorts. The 300,000-square-foot facility will be built on 39 acres that is currently a parking lot and will cost in the range of US$300 to $350 million dollars. This project should be completed in two years, depending on permitting and coordination with Caesars’ new board of directors.

Additionally, Wynn Resorts announced that its famed Golf Club will close Dec. 22 to make way for construction of its new Paradise Park, the lagoon development will include a new hotel planned for behind the Wynn and Encore. The carnival-themed new development will have a 103-foot diameter carousel rotating over the man-made lagoon, electric bumper cars that light up when bumped and a nighttime parade with 10-12 floats that guests can pay to join in on the fun. The development will also have a new 47-storey, 1,500-room hotel with its own convention space, casino and restaurants. It will sit roughly between the Encore and the Wynn Las Vegas.

In preparation for this article, I contacted the Nevada Commission on Tourism for their input. They said that traffic to their website, regarding Las Vegas, dipped right after the shooting, which they attributed to the cessation of all promotions, advertising and paid search terms immediately following the shooting. They said that when normal marketing resumed, website traffic returned and they did not see any lingering downturn in visits to their website.

Considering the anecdotal evidence presented by the major Las Vegas resort companies it would seem that the best way forward would be to follow their lead and promote Las Vegas with the idea that while business may slip a bit in this first calendar quarter after the tragedy, the long term view suggests that business will, after a short period, return to its historical booking patterns.

Michael Schoenberger is a freelance travel writer who lives and works in Las Vegas.






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