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Gaming Guru

Chris Jones
 

Casino Companies Heed to Road Work

8 September 2006

LAS VEGAS -- Tens of millions of dollars are spent each year encouraging John and Jane Traveler to make Las Vegas the site of their next getaway.

But what happens here won't stay here if people can't get here in the first place.

And later this month, a different Las Vegas message -- as in "Don't come here, at least not driving the way you'd normally drive" -- will resonate in some of this city's largest feeder markets.

That curious reversal stems from a series of weekend road closures needed to improve Interstate 15, the primary roadway between Las Vegas and the Southern California metropolises of Los Angeles, San Diego and all burgs between.

Upcoming construction near Devore, Calif., is expected to cause delays so lengthy that the California Department of Transportation has asked travelers to find alternate routes, even if those detours add hours and miles to the journey.

CalTrans encourages weekend travelers:

- To fly.

- To leave home earlier than normal and stay away longer.

- To remain at home altogether to avoid congestion.

The latter option is unacceptable to Southern Nevada, whose travel industry relies on dollars from the Golden State. And to keep that cash flow flowing, businesses here already are taking steps to pacify their Southern California customers.

Harrah's Entertainment and Boyd Gaming Corp. will mail their customers letters to alert them of the impending work. MGM Mirage might do the same, while the Las Vegas Convention and Visitors Authority is readying an advertising blitz of its own.

"The decision on how aggressive we'll be with an advertising campaign will be made as the weekends progress," Terry Jicinsky, the convention authority's senior vice president of marketing, said Thursday.

Newspaper, radio and Internet ad concepts are in development so they'll be ready to go if needed, Jicinsky added.

CalTrans on Aug. 31 unveiled its long-awaited list of dates when it plans to shut down portions of I-15 south of Cajon Pass. The closures are needed to replace damaged pavement, add a northbound truck-climbing lane and improve the roadway's shoulders and guardrails.

The first closures will affect some southbound lanes from Sept. 29 through Oct. 1. A larger shutdown is scheduled the following weekend affecting traffic in both directions of I-15 and I-215.

Similar shutdowns are scheduled each weekend next month. After a winter hiatus, more will occur in 2007 as CalTrans wraps up its $26 million improvement project.

Casino operators stressed that the road work is a short-term inconvenience that will bring long-term benefits to the local economy. Last year, 29 percent, or about 11.2 million, of Las Vegas' nearly 38.6 million visitors hailed from Southern California, according to visitor surveys conducted for the convention authority.

Those surveys also indicated that 53 percent of all visitors last year traveled by automobile or bus; that percentage of drivers probably was higher among Southern Californians, given their proximity to the Silver State.

The Palms has become a haven for younger, well-heeled Southern Californians looking to blow off a little weekend steam in the desert. Still, owner George Maloof shrugged off the expected negatives associated with the I-15 work, adding he has no plans to offer special incentives to customers affected by the delays.

"I don't know if anyone has a choice, really. You just live through it," Maloof said. "It's like expanding a casino. For a time it's inconvenient, but at the end of the day it benefits everyone.

"Looking long-term, if (the I-15 improvements) are going to help, you've got to get them done."

The closures will affect different properties in different ways.

Resorts such as Bellagio, Wynn Las Vegas, Caesars Palace and The Venetian, for example, rely more on fly-in customers than Excalibur or Imperial Palace, for example. But every local property will be affected in some manner, industry sources said.

Strong advance bookings at MGM Mirage's 10 Strip properties have that company expecting only a "marginal" impact" from the construction, said spokesman Gordon Absher. Its resorts' marketing departments are studying ads and mailers that would alert guests of the road work, but no firm plans to deploy them are set.

Instead, MGM Mirage might step up its sales efforts in areas unaffected by the highway closures by placing more ads to increase visitor counts from Phoenix, the Bay Area, Denver or Southern California's High Desert communities north of the road work.

"Las Vegas is a compelling destination. People are going to come," Absher said.

Harrah's Entertainment, which operates eight hotel-casinos in Las Vegas and Laughlin, has its investment relations director monitoring the impending closures because of their potential financial effect.

Still, the company's western division president said this week he does not believe the closures will deter many people from driving.

"It will be an inconvenience, but one most people will understand and allow an extra half-hour for," Tom Jenkin said. "I think that most people are tolerant (of delays), as evidenced by (heavy I-15 traffic encountered) each holiday weekend."

Beyond the mailings, Harrah's won't do anything unusual for customers affected by the congestion.

"We'll monitor customers' reactions when they're here, but hopefully people will simply time their departures better" to avoid congestion, Jenkin said.

Unlike its Las Vegas competitors that have no Southern California properties, Harrah's could steer traffic toward Rincon, an Indian casino it operates just north of San Diego.

The Pechanga Resort & Casino, which sits just off of I-15 in Temecula, Calif., has for months placed radio and TV ads enticing Southern Californians with promises of easier accessibility vs. Las Vegas and other nearby Indian casinos. Spokeswoman Ciara Coyle said the property's tag line "The Shortcut to Vegas" should ring particularly true next month.

"It's hard to say if we'll see any measurable drive-in traffic from the closures, but we'd certainly welcome the added business," said Coyle. She would not rule out the use of ads specifically targeting the I-15 closures, though Pechanga has none currently planned.

Boyd Gaming spokesman Rob Stillwell said his company also will advise Southern Californians with October reservations of the roadwork in advance of their departure. Nonetheless, Boyd's October bookings have not shown any weakness so far.

Boyd Gaming won't offer incentives to entice customers to drive through the construction, Stillwell said, but it might provide some sort of "goodwill gesture" after the roadwork ends to win back visitors who were put off by October's inconveniences.

Absher and Jicinsky praised CalTrans for its efforts to plan the closures for periods that minimize their negative effect on Las Vegas.

"The consumer will come to understand that there's an end to this, and we think that will work to our advantage," Jicinsky said.