Updated 

Harsh winter helps push Las Vegas toward record tourist numbers


Southern Nevadans can thank the polar vortex for contributing to the local tourism economy.

In January and February when Las Vegans were pulling out the shorts and flip-flops, parts of the Midwest and East Coast cowered in one of the coldest winters on record.

Locals lounged by the pool as temperatures crept into the 80s, chuckling at Facebook posts by friends buried under several feet of snow.

The abnormal winter bred pent-up demand — demand partially stoked by Las Vegas Convention and Visitors Authority, which tied some of its TV campaign to the thermometer. A record low temperature automatically triggered ad buys in that region. This resulted in more ad purchases than normal, but it also stirred desire in that audience to get away to warmer climate.

Some have suggested that early-summer tourism may be off slightly because kids will have to be in school well into June to make up snow days, but there’s little worry of that in Las Vegas.

DELAYED VACATIONS

“That may affect Orlando because they’re more family oriented,” said Cathy Tull, senior vice president of marketing for the authority. “But if it’s true, it shouldn’t affect us.”

Local tourism experts say the weather, the recent opening of new attractions, a favorable convention calendar and continued emphasis on attracting international visitors will fuel a record year.

And while the average daily room rate is still shy of record highs and tourists still aren’t spending as much as they once did, those figures are also trending up.

“There are several things that are going well for us now,” said Tull, whose job is to promote the Las Vegas market to the world. “On the convention side, we’ve had CES (Consumer Electronics Show, ConExpo-Con/Agg and MAGIC (Men’s Apparel Guild in California). ConExpo is the largest show by exhibit space, but for us, it was also the largest by attendance.”

That show only comes once in three years, so having it in 2014 was a springboard for a first quarter that had the resort corridor smiling.

In the first three months of 2014, visitation is up 5.3 percent to 10.2 million people. Seventeen percent of that was attributable to trade shows and conventions.

In March, passenger counts at McCarran International Airport were the highest monthly total in 5½ years at 3.8 million.

In addition to well-attended trade shows, the city had its share of special events centered around sports.

College basketball fans from across the West were in the city for basketball tournaments from the Mountain West, West Coast Athletic, Western Athletic and PAC-12 conferences. The NCAA’s March Madness basketball tournament has grown to become one of the biggest sports wagering events on the calendar.

NASCAR made its annual appearance at the Las Vegas Motor Speedway in March.

NEW ATTRACTIONS

Another reason 2014 is showing great promise: New toys.

Tull said history has proved that the opening of a new attraction generates a buzz that drives higher visitation. She said a new attraction usually makes loyal customers want to come back again.

Caesars Entertainment’s Linq retail district and the High Roller, the observation wheel that dominates the skyline of the center Strip, have taken their place as prime traffic generators.

Jon Gray, vice president and general manager of the Linq, hasn’t said how many tickets have been sold to ride the Guinness World Records-certified tallest observation wheel in the world.

But he has said the popularity of the wheel has exceeded expectations and there are frequently long lines during peak periods, even though 40 people can climb aboard each minute.

The High Roller also has been the source of plenty of free advertising. Tull said visitors with smartphones upload an average of a picture per minute — images that most likely show someone enjoying Linq.

TWO NEW HOTELS

Las Vegas’ summer season is being bracketed by the openings of two hotels over holiday weekends — Caesars’ Cromwell at Las Vegas Boulevard and Flamingo Road on Memorial Day, and SLS at Las Vegas Boulevard and Sahara Avenue on Labor Day.

Victor Drai’s rooftop nightclub will have a fireworks menu for those willing to spend $5,000 to $100,000 to impress their friends. It’s another something-new, only-in-Las-Vegas element designed to draw attention to the Cromwell.

Las Vegas has seen its largest bumps in tourism in 1994, the year after Luxor, Treasure Island (now TI) and the MGM Grand opened within 64 days of each other to add 10,431 rooms to Southern Nevada’s room inventory. The Rio added 437 rooms in an expansion at about the same time.

The year after the openings, visitation exploded from 23.5 million in 1993 to 28.2 million in 1994.

A smaller, similar boom occurred in 2003-2004 when the Venetian expanded by more than 1,000 rooms and THE Hotel opened in the Mandalay Bay complex. Several other smaller hotels opened within six months. Corresponding visitation ballooned from 35.5 million in 2003 to 37.4 million in 2004.

The Cromwell and SLS are nowhere close to the size of the mega-resorts of the boom years, but Tull believes they may provide just enough magic to propel Las Vegas past the elusive benchmark of 40 million visitors.

The Cromwell, formerly Bill’s Gamblin’ Hall and Saloon (and the Barbary Coast before that) has only 188 rooms while SLS, once the Sahara, will open with 1,720.

Three times since 2007, visitation has come tantalizingly close to 40 million, including 2007, widely regarded as Southern Nevada’s best year with record highs in the number of conventions hosted (23,847), hotel occupancy (94 percent), total occupancy (94 percent), room tax collections ($219.7 million) McCarran passenger counts (47.7 million) and gaming revenue ($10.9 billion).

Since then, visitation hit the current record of 39.73 million in 2012 and last year’s near miss of 39.67 million.

How is Las Vegas faring against other tourism destinations?

STR, a leading national travel research firm based in Hendersonville, Tenn., formerly known as Smith Travel Research, doesn’t list Las Vegas among its top 25 hotel markets because Southern Nevada’s casino-hotel companies don’t provide financial data to the company.

However, STR monitors occupancy rates and average daily room rates of 25 markets just as the Convention and Visitors Authority gathers information on local properties.

HIGHEST OCCUPANCY

Las Vegas has been the hands-down leader by occupancy rate. For the first quarter of 2014, Southern Nevada reported a rate of 87 percent 3.6 percentage points more than in the first quarter of 2013.

The closest national contender was Oahu (Honolulu) with 85.6 percent occupancy for the quarter, down 0.8 points from the first three months of 2013.

Other top markets: Miami (84.6 percent, down 1.6 points), Orlando (79.3 percent, up 3.4 points) and Los Angeles-Long Beach, Calif. (77.2 percent, up 4.7 points.)

The largest percentage increase was reported by Denver, up 12.4 percentage points to 68.8 percent, according to STR.

Las Vegas, which has struggled to recover its average daily room rate since the Great Recession hit, would have the 12th highest rate among the top 25 with an average of $122.34 per night for the quarter.

Top rates for the quarter were posted by Miami ($234.34, up 5 percent from the first quarter of 2013), Oahu ($220.96, up 5.9 percent from 2013) and New York ($212.92, up 1.2 percent).

The average percentage increase in room rate among the top 25 was 3.4 percent, to $134.74.

Jan Freitag, senior vice president of global development for STR, said it’s difficult to compare the first quarter of 2013 with this year because Easter was in March last year but in April this year, shifting some spring break travel into the second quarter.

Several markets nationwide are looking to turn up the competitive heat with infrastructure improvements that include new hotel rooms and convention center additions.

ARMS RACE

“There’s an arms race going on in convention facilities,” Freitag said.

Among the players: San Francisco’s Moscone Center, which completed a two-year renovation in 2012; the Austin (Texas) Convention Center, a LEED Gold-certified facility; New Orleans and its Ernest N. Morial Convention Center, improved after damage inflicted by Hurricane Katrina; and the Miami Worldcenter, now under construction in downtown Miami.

Chicago recently added a LEED Gold-certified hotel at McCormick Place, the largest convention facility in the United States.

In an effort to keep up with competition, the Convention and Visitors Authority last year unveiled plans for its $2.5 billion Las Vegas Global Business District, a phased expansion and refurbishment of the Convention Center over several years. The city’s third-largest convention facility, the Mandalay Bay Convention Center, last month announced plans for a $66 million, 350,000-square-foot expansion.

INTERNATIONAL ARRIVALS

Freitag said markets nationwide are benefiting from efforts to open doors to international tourists through the Brand USA marketing initiatives jump-started by the Travel Promotion Act of 2009. Las Vegas appears to be making the most of efforts to attract foreign travelers, with McCarran International Airport having the highest percentage of international arrivals in the country in 2012. The airport this month welcomed its 14th international airline, Switzerland’s Edelweiss Air, which began twice-weekly Zurich flights on Monday.

Canada’s discount WestJet, McCarran’s strongest foreign air carrier, brought in more than 1 million passengers in 2013, the first international airline to hit that plateau.

The Convention and Visitors Authority’s goal is to increase international visitors from the current 18 percent of total visitation to 30 percent by 2020.

To Tull, it’s all part of a balanced approach: Go after conventioneers, court loyal Southern Californians who make frequent trips to Las Vegas to see new attractions; and lure more international arrivals.

And, of course, take advantage of the weather.

Contact reporter Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow him on Twitter @RickVelotta.

 

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