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Best of Benjamin Spillman

Gaming Guru

Benjamin Spillman
 

Boosters retool overseas effort

11 June 2008

LAS VEGAS, Nevada -- With gasoline prices approaching $5 per gallon in parts of Southern California and domestic airlines cutting routes, Las Vegas boosters are overhauling efforts to attract tourists from overseas.

On Tuesday the Las Vegas Convention and Visitors Authority approved a $2 million plan to reorganize its overseas offices to make better use of a $16 million international marketing and advertising budget.

The agency is under pressure to help fill as many as 32,000 new hotel rooms under development in Las Vegas at a time when domestic tourism is in a slump and an increasing number of Americans are unwilling or unable to travel.

The authority hopes by 2010 to increase the number of foreign visitors to Las Vegas to 6.5 million annually, or about 15 percent of the 43 million expected visitors.

The overhaul of international outreach efforts started three years ago, but recent U.S. economic woes have some of the authority's board members asking whether they should be even more aggressive.

"I think this is long overdue," said Tom Jenkin, western region president for Harrah's Entertainment, which owns eight resorts in Las Vegas. "I just wonder if we have underestimated what kind of effort we are going to need."

Las Vegas Mayor Oscar Goodman said he witnessed evidence of the domestic tourism slump first-hand during a trip last weekend to Southern California.

Goodman said as he drove south on Interstate 15 the northbound lanes heading toward Las Vegas were eerily calm Thursday evening, typically a time when many Southern Californians are en route to Nevada.

"The traffic coming to Las Vegas ... was as slow as I have seen it in the years since I have been here," Goodman said. "I think we are going to have to adjust."

Under the plan outlined by John Bischoff, the authority's vice president of international brand strategy, the marketing efforts will shift from a country-by-country to a regional approach.

The regions are divided into major, primary and emerging markets.

Major markets include Canada, Mexico and Central America and the United Kingdom, which are the source of 70 percent of foreign visitors to Las Vegas.

Primary markets include Japan, the European Union, South Korea, Australia, New Zealand, Southeast Asia and Ireland.

Emerging markets are China, Brazil, South America, Russia, Eastern Europe and India.

Regionalizing the outreach program gives the authority more flexibility to respond to cultural and political changes and competition from other destinations, Bischoff said.

"We can, with flexibility, move the money around countries and regions," he said.

The prospects are mixed for attracting more foreign tourists to Las Vegas.

A memorandum of agreement between the United States and China is expected to increase the number of Chinese visitors to America to about 579,000 annually by 2010. That agreement is valuable because Chinese tourists are among the freest spenders, dropping about $6,000 each during a typical trip to America.

The United States is also poised to finalize South Korea's spot on a list of countries in the Visa Waiver Program, a system that streamlines the documentation requirements to visit. That change, which could be in place by the end of the year, could eventually double the number of Koreans who visit America annually.

Korea is the only top-five source market for Las Vegas that isn't in the program. If the projected increases come to pass, it could be worth $120 million annually for Las Vegas, based on the $3,500 a typical Korean traveler spends in America.

Terry Jicinsky, the authority's senior vice president of marketing, said the agency is already working with McCarran International Airport and Korean Air to make sure airline capacity can match pent-up demand for Las Vegas in the Korean market.

"We need to facilitate a way for them to actually travel to Las Vegas," Jicinsky said.

In addition to the need to attract more foreign airline service, Las Vegas faces other challenges in the quest for more international tourists.

The United States is viewed in many countries as a difficult place to visit due to security restrictions at ports of entry.

Acquiring a visa is also a challenge, depending on the origin of the visitor.

For example, visitors from places such as China who have attended the International Consumer Electronics Show in Las Vegas have reported that when they want to make a repeat visit, they are required to redo time-consuming and frustrating paperwork.

In Brazil there are only a few places residents can conduct interviews with American officials to acquire a travel visa. That means residents who live far from cities with an official American presence need to travel hundreds of miles just to begin the bureaucratic process.

Also, there is a feeling among many in countries with diverse populations such as Brazil that the United States makes it harder on certain travelers than others.

Alice Mor, 26, a Brazilian travel writer, said people with Arab-sounding names have more problems than others trying to visit America.

Mor, who recently visited Las Vegas for a tourism conference, said she had friends who had difficulty getting approval to come to the United States because of anti-Arab discrimination even though they were citizens of Brazil.

"They weren't even Arab, they were Brazilian, but they still couldn't get a visa," Mor said.

The headaches associated with visiting the United States are gaining attention, especially since the sour domestic economy has put a dent in the earnings of hospitality companies.

In May an index of 10 publicly traded gambling companies dropped nearly 13 points, its third consecutive month of decline.

Jicinsky said the number of Las Vegas resort representatives who join authority-sponsored marketing trips around the world is evidence of a greater push to find new customers to support the industry.

"Five years ago we might have gotten one or two going with us," said Jicinsky about a current trip to China. "Today we have eight or nine going with us."