Question of the Day - 21 April 2019

Yesterday, we answered a question posed by a long-term local who asked how the authorities are planning to bring tourism back to Las Vegas and, indirectly, locals to the Strip. We averred that Las Vegas is doing just fine in attracting out-of-town visitors and doesn't care -- and doesn't need to care -- about attracting locals to the Strip.

Today, we're reprinting a piece written by Howard Stutz for CDC Gaming Reports. Howard is a long-time Las Vegas journalist and communications professional who covered the gaming industry during two stints with the Las Vegas Review-Journal, from 1987 to 1991 and 2004 to 2016. Howard's reporting on a recent UNLV conference included the following story, reprinted with the gracious permission of CDC Consulting. 

Las Vegas has drawn more than 42 million visitors in each of the last two years after tallying just under the 43 million mark in 2016. To keep up the pace, however, means changing with the times.

That idea also requires adapting new ways to distribute the tourism destination’s messages to target audiences.

“There are more media channels than there were 10 years ago,” Steve Hill, CEO of the Las Vegas Convention and Visitors Authority said last week at the UNLV Gaming and Hospitality Education Series – 2020. “Twenty years ago, it was just newspaper, radio and television. We have to utilize other means.”

To drive home that point, Hill showed the audience a 60-second promotional spot for the Instagram social media platform that targeted a Millennial audience and featured many of Las Vegas’ tourism attributes. That age demographic (22-to-37), he said, utilize their smart phone devices more actively and longer during a 24-hour period than the older Baby Boomer generation.

Generation Z, a demographic younger than Millennials, spend even more time on their mobile devices. That group is expected to become the next wave of Las Vegas visitors. Hill told the audience the LVCVA’s reliance on non-traditional avenues for distributing promotional messaging will continue to evolve.

Las Vegas in the process of a new construction era.

New hotel-casinos – including the $4 billion Resorts World Las Vegas, Circa Resort & Casino in downtown Las Vegas – are underway. New entertainment venues are being constructed, including the $1.8 billion Las Vegas Stadium – future home of the soon-to-be Las Vegas Raiders – and the MSG Sphere behind the Venetian resort. New convention facilities are coming to fruition, including the LVCVA’s $935 million expansion of the Las Vegas Convention Center, and the $375 million Caesars Forum conference center.

Hill, in a brief interview following his participation in a panel discussion of the shifting Las Vegas visitor demographics, said the LVCVA targets room occupancy percentage as a mark of success. Hotel occupancy reached 90.4 percent in 2004 when the market had 132,947 room. The 2018 occupancy rate was 88.2 percent for the area’s 149,158 rooms.

He said Las Vegas tourism leaders want to increase visitation from foreign visitors, which would entail more direct international flights into McCarran Airport. The airport, the eighth busiest in the U.S. with nearly 50 million passengers in 2018, has room for growth in the facility’s international terminal.

“We also have to think about other ways to bring people to Las Vegas,” Hill said.

Gaming

Las Vegas’ visitation and spending habits are different for a younger Las Vegas visitor. Hill said 68 percent of all Millennial-aged visitors to Las Vegas spend time in the downtown area, where, in the last decade, casino-resorts have added new amenities, such as restaurants and entertainment attractions. The downtown location known as East Fremont has become a trendy spot for new bars and restaurants.

“Rather than an inexpensive place to go, they want a more authentic place to go,” Hill said. “Downtown has done a good job of reinventing itself.”

Much has been written about reliance on non-gaming spending. In the Nevada Gaming Control Board’s Gaming Abstract for fiscal 2018, Las Vegas visitors spent $18.3 billion on everything – gaming, hotel rooms, dining, entertainment and retail.

Gaming accounted for 34.3 percent of the total revenues on the Strip, a slight increase from 34 percent in 2017. In 1984, gaming accounted close to 59 percent of all Las Vegas Strip revenues, and the figure has slipped in the last 35 years.

Gaming was not primary focus in the Instagram advertisement that Hill showed the audience.

“Customers spend money in a lot of different areas,” Hill said. “It used to be there were only two states that had legalized gaming. Now there are just two states that don’t have any form of gaming.”

Deterrents to Visitation

Hill’s fellow panelist, Oliver Lovat, CEO of Denstone REA, told the audience resort fees, which are added onto hotel room rate charges and range from $25 to $45 a night, are not the biggest deterrent to Las Vegas visitation.

The growth of paid parking over the last few years is hurting the market’s reputation, Lovat said.

He suggested the tourism community needs to reexamine many of the fees the resort industry has been charging guests.

“The experience we give people in Las Vegas is the main reason they come here,” Lovat said. “They can’t get that experience anywhere else.”

Lovat believes younger Las Vegas visitors will become gamers as they get older and that international visitation is key to the market’s growth. The continuing development of new attractions will also fuel visitation.

“Las Vegas could become an Olympic city in my lifetime,” Lovat said. “There is a real opportunity here.”