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Gaming Guru

Richard N. Velotta

Dollar's Slide May Be Boon for Tourism

6 December 2004

Although the slide in value of the American dollar abroad is looked upon as a sign of economic weakness, it's also a sign that it's time to roll out the global welcome mat.

And that's what the city's top marketing minds look to do after seeing the U.S. Department of Commerce's most recent international visitation figures released this week.

The International Trade Administration's Office of Travel & Tourism Industries reported that year-to-date visitation to the United States for the first eight months of 2004 is up 13 percent from the same period a year ago.

Overseas arrivals, not including Canada and Mexico, increased 18 percent for the first eight months of the year. Asian visitation has increased by 26 percent, with arrivals from Japan going up by 31 percent.

The Commerce Department said 25.9 million international travelers have visited the United States in the first eight months of the year.

Las Vegas officials have no way of tracking just how many of those 25.9 million people made their way to Las Vegas, since only a percentage of the city's visitors come here on non-stop flights from abroad.

But even the non-stop numbers are impressive for Las Vegas. According to statistics posted by McCarran International Airport this week, passenger volume on Virgin Atlantic Airways is up 54.9 percent to 125,513 people for the first 10 months of 2004 and passenger counts for Japan Airlines is up 31.3 percent to 70,775 passengers.

Virgin Atlantic offers non-stop flights to Las Vegas from London's Gatwick International Airport, while JAL offers non-stop flights to McCarran from Tokyo. Tourism from Great Britain should climb even more in the months ahead as a new carrier, BMI, began non-stop flights to Las Vegas from Manchester, England, on Oct. 31.

Marketing experts know the sudden leap in international tourism isn't just happenstance.

"It's a combination of factors," said Kevin Bagger, director of research for the Las Vegas Convention and Visitors Authority.

Bagger said currency exchange rates, the general economic climate of a nation and the availability of air service to the United States play a role in overseas travel decisions.

"And the important thing is that it bodes well for Las Vegas, since we position ourselves as an international destination and we market the international visitor," he said.

Foreign visitors are among the most desirable tourists, according to LVCVA research, since they tend to stay longer when they come and spend more when they're here. And that's where the currency exchange has a big impact, since foreign visitors view many goods and services as a bargain and spend freely.

"It's certainly part of the calculus," said Stephen Miller, chairman of the Department of Economics in UNLV's College of Business. "I don't know if that's the No. 1 reason for people to travel abroad, but what they're going to see when they get here is that the price of things here are going to appear to be more attractive in own currency."

Miller said the American dollar is treated with great respect overseas and that more U.S. dollars are held abroad than on American soil.

"In many countries, it's viewed as more valuable than their own currency," he said.

Terry Jicinsky, senior vice president of marketing for the LVCVA, said the slide in value of the American dollar against the Euro, the British pound and the Japanese yen has been ongoing for several months, but it has become more dramatic in the last two months.

The exchange rate of those currencies specifically is of note to Las Vegas, since visitation from Great Britain and Japan is gaining strength. The LVCVA has tourism offices and representation in Japan, Great Britain, Germany, France, Australia, South Korea and Mexico.

When the currency rate pendulum swings in favor of foreign visitors, representatives in those offices step up the marketing.

"It's one of the advantages we have by having long-term relationships in those countries," said Rossi Ralenkotter, president of the LVCVA and one of the architects of the agency's international marketing program.

"You'll see our representatives stepping up their contacts with the local travel agencies," Ralenkotter said. "Here at home, we work with the (air) carriers and with McCarran to improve the service and develop packages with the resorts, which is really helpful to international visitors because they aren't completely familiar with things here."