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Gaming Guru

Chris Jones
 

Las Vegas Tourism: Worldwide Welcome

25 August 2003

LAS VEGAS -- Its journey from London's Gatwick International Airport to Las Vegas should take no more than 12 hours from takeoff to landing. But the processes leading up to Virgin Atlantic Airways Flight 43's planned arrival at McCarran International Airport early next month actually took several years to complete.

Virgin's crews will welcome passengers aboard one of the airline's white-and-red Boeing 747-400 aircraft on Sept. 2 to begin service of a third scheduled weekly flight between the two cities. But long before then, behind-the-scenes efforts by the airline, airports and governments on both sides of the Atlantic were required to help make this city's latest international arrival possible.

Few locals are more familiar with the airline grind than Harry Kassap, who's helped develop new markets for McCarran since 1996. Kassap has gone thousands of extra miles, literally and figuratively, to boost Las Vegas tourist counts.

"Getting (initial) service from Virgin took me five trips to London and many, many years," said Kassap, who helped persuade the London-based carrier to begin its current twice-weekly Las Vegas service in June 2000.

"Getting Singapore Airlines here took somewhere in the neighborhood of 16 trips to Singapore and six years of negotiations," Kassap added, commenting on another overseas route that came online last August and was pulled earlier this year. "I'm on the road between 110 to 150 nights per year, depending upon the year."

Filling the Rooms

Though the efforts of Kassap and his colleagues go largely unnoticed by the traveling public, the creation of new air routes, including connections to both international and domestic markets, remains vital to the future of Southern Nevada's tourism industry, sources said.

"To go from 60,000 hotel rooms to 130,000 hotel rooms in a decade clearly warrants evolving new market segments above and beyond just the regional markets of the Southwest," said Terry Jicinsky, senior vice president of marketing for the Las Vegas Convention and Visitors Authority. "To rely solely on your traditional feeder markets clearly would not have sustained the visitor numbers that we needed."

Las Vegas' hotel room inventory jumped from 73,730 in 1990 to more than 127,000 last year. During that span, local visitor volume soared from 20.9 million to more than 35 million people per year.

Looking ahead, new or proposed additions at The Venetian and Mandalay Bay and the opening of Steve Wynn's new resort are expected to push the city's hotel room inventory to more than 135,000 by 2005, further increasing the need for Las Vegas to expand its reach.

Jicinsky said the convention authority places nearly equal emphasis on adding new overseas routes as it does bringing in flights from second- and third-tier U.S. cities that previously offered little or no direct service to McCarran. Kassap, however, said luring more international flights can be far more challenging and time consuming.

Getting off the ground

The first step in securing new overseas service, Kassap said, is to identify areas with masses of potential visitors. Ideally, he looks for markets that can provide at least 200,000 visitors per year.

Using information taken from airline passenger surveys conducted by the U.S. Department of Transportation, Kassap examines how many local visitors have come from a specific market, or could easily connect through a targeted destination. He also accounts for travelers who may reach Las Vegas after entering the country using other gateways such as Los Angeles, New York or San Francisco.

Once a market is identified, Kassap next seeks carriers capable of serving a Las Vegas route. Though Las Vegas is globally well-known, he said such conversations are often difficult and therefore patience and persistence are key.

"After we were successful in bringing them here, top executives from both Virgin and Singapore said it would be easier to run service to Las Vegas than listen to Harry one more time," Kassap joked. "Everybody knows Las Vegas, but I've got to show them how Las Vegas fits into their picture."

Citing a carrier's existing connections, available equipment, competitors' routes and alliances with domestic carriers, Kassap also tries to play up any side benefits of Las Vegas service. For example, he said the use of Hong Kong as a hub allowed Singapore Airlines to grab incoming McCarran traffic that originated in Jakarta, Indonesia, Bangkok, Thailand, and other Asian destinations.

"If you add together the Hong Kong visitor numbers, Singapore's numbers and all of those `behind markets,' it becomes a strong flight," Kassap said. "That helps, because if (a carrier has) got to pull equipment off another route to service you, you'd better be able to tell them why you're a whole helluva lot better than that other route."

Within the United States, Kassap said his efforts are usually centered on what he calls "diagnostics," or following how an existing carrier might add to its current network.

"When JetBlue first came here they flew only to Long Beach (Calif.)," Kassap said. "We knew (New York's Kennedy International Airport) was their first hub and that presented an opportunity. So we continually pitched it, then we had it."

In the case of U.S. carriers that remain tied to a "hub and spoke" model, McCarran looks to carriers to add more daily flights or larger planes. Such moves are usually dictated by supply and demand more than lobbying from McCarran, he added.

Domestically, Las Vegas is often an easy sell because it's well-known and popular. Nevertheless, Kassap said he experiences challenges when trying to convince carriers there is a market for more lucrative business travel beyond the cheap-fare bargain hunters.

Overseas flights can be far more complicated, though. About 60 nations now have "open sky" agreements that allow unlimited travel to and from the United States, but Kassap said the industry's "most significant markets" -- including the United Kingdom, Australia, China, Japan and Hong Kong -- continue to limit air travel by requiring certain carriers to fly solely on specified routes subject to government negotiations.

Although many city aviation officials may be reluctant to negotiate freer flying to the United States, Kassap is not. When necessary, Kassap said he'll join meetings with the State Department, Department of Transportation and foreign government agencies to negotiate a carrier's ability to fly more within the United States.

"We've been extraordinarily successful. That's because we participate in the process," Kassap said.

Bill King, Virgin's senior vice president over North America, said Las Vegas' efforts in such negotiations often surpass those of other destinations. Jicinsky said the convention authority has also allocated $1 million this year for a cooperative marketing program that allows it to match dollar-for-dollar any advertising expenses made by new carriers coming into the market.

Such programs have been previously conducted with Virgin and the convention authority is now negotiating to provide similar help in relation to Virgin's planned third weekly flight.

Wish list

Though Las Vegas' international visitor total dipped from more than 4 million in 2000 to 2.8 million last year, Kassap said overseas markets still offer "unlimited potential" for the local travel industry.

Kassap said McCarran already enjoys service from what he called "top-tier" international carriers including AeroMexico, Air Canada, Japan Airlines, Mexicana and Virgin. Still, local aviation officials are always looking to add more.

The region with the most near-term potential is Asia, Kassap said.

Financial problems related to the severe acute respiratory syndrome scare and the recent war in Iraq led Singapore Airlines to halt its thrice-weekly service from Hong Kong this past spring, which left Japan Airlines as the lone carrier operating direct flights between Las Vegas and Asia.

Looking ahead, Kassap wants to reinstate Hong Kong service and add direct flights from mainland China, Taiwan and southern Japan, among other Asian destinations.

Local officials have continuing dialogues with representatives from several major Asian carriers such as China Airlines; EVA Airways of Taiwan; Korean Air; Philippine Airlines; and Thai Airways. Kassap said he's also kept in touch with Singapore Air in hopes it might soon restore its local service.

"The JAL flight tends to fill up with ethnic Japanese. I'd like to get somebody to (also) bring me the Chinese, the Singaporeans, the Bangkok traffic," Kassap said of his desire to add more Asian flights. "A network carrier from central or southeast Asia would be great."

However, those expansion plans are complicated by the lack of open-skies agreements between the United States and many Asian nations, as well as increased challenges many foreigners face when trying to obtain U.S. travel visas.

"It's going to take a lot of negotiations but (Asia) will play a very big part in our future," Kassap said.

Direct scheduled service from continental Europe is also on Kassap's wish list.

"Virgin is all Brits," Kassap said. "I'd like to get somebody that can bring me the Italians, French, Dutch and Spaniards all in one fell swoop."

Targeted Euro-carriers include: Air France, which offers connections throughout the region via Paris; KLM Royal Dutch Airlines, which connects to both the United States and Europe by way of Amsterdam, the Netherlands; and Lufthansa German Airlines, which has hubs in Frankfurt and Munich, Germany.

South America also offers plenty of potential travelers, though Kassap said direct air service from carriers such as Brazil's Varig and Santiago, Chile-based LanChile remains a long-term goal due to widespread economic instability south of the equator.