Feature Stories - April 2001

Putting Out the Welcome Mat:

Tourism Agencies Lure Visitors

by Patricia Martin

On the Road in the Rurals

Lt. Gov. Lorraine Hunt is taking her act on the road this year — literally. Hunt, who serves as chair for the Nevada Commission on Tourism (NCOT), is packing her bags and hopping aboard a Winnebago. The spunky lieutenant governor is going mobile in an effort to attract more RV drivers to the Silver State and boost travel and tourism in Nevada’s less-frequented rural areas.

Hunt’s efforts are all part of a massive three-year $1 million-plus NCOT promotional effort that involves giving away six Winnebago motor homes with price tags in excess of $100,000 each. NCOT isn’t dipping into tax coffers to pay for the recreational vehicles. "Nevada’s RV Adventure Sweepstakes" has a variety of partners, including Winnebago Industries and the Recreational Vehicle Industry Association, a national trade organization. NCOT will be heavily promoting the sweepstakes via advertisements on radio, television and in various publications including RV trade magazines. Ads will air in several major metropolitan markets outside of Nevada including Salt Lake City, Sacramento, Portland and Phoenix.

NCOT will be heavily promoting the program throughout Nevada as well. The commission is hoping to entice the state’s mushrooming newcomer population — more than 4,000 monthly — to explore Nevada’s smaller and less-renowned natural attributes, many of which sorely need tourist dollars. There will be in-state promotional efforts with clever tags like "The next time you want to get out of town, visit Nevada."

"You won’t hear much about Las Vegas or Reno in these promotions," Hunt remarked. "People who come to Nevada already know about these places. Our mission is to primarily market the state and its rural jewels." These include areas like Elko, one of several communities located near the majestic Ruby Mountains in northeastern Nevada. Hunt will also be stopping in Ely, a gateway to Great Basin National Park, in the central part of the state.

Tiny historical treasures such as Goldfield, a smidgen of a town that once was Nevada’s largest city, are also stops on Hunt’s RV excursion. Located about 200 miles north of Las Vegas on U.S. 95, the once-booming mining town is finally experiencing a small-time revival. Several of the town’s historic landmarks, including the Goldfield Hotel, where Mark Twain stayed, are getting much-needed facelifts.

Hunt, a native Nevadan who seems to be an expert on just about every rural nook and cranny in the state, will also be traveling to Caliente and the former mining town of Pioche, where worn wooden sidewalks lead visitors to the city’s Old Garter Saloon, a grand old courthouse and a small railroad museum. "Pioche really is a charming place. There are several restaurants in town that serve up the best biscuits and gravy anywhere in the West, and the area has a spectacular landscape," said Hunt, who is clearly at ease promoting the state’s rural attractions.

Last year, more than 47 million people visited Nevada. That was up from 45.5 million in 1999, and 42 million the prior year. Nearly half of the people who visit the state arrive by car or RV. According to a study by the University of Michigan Survey Research Center, one out of every 10 vehicle-owning households in the United States also owns an RV. Currently, there are about 8.6 million U.S. households with RVs and some 9.3 million RVs on America’s highways. NCOT is betting that its heavily-promoted adventure sweepstakes will lure more RV travelers to the Silver State, which boasts more than 100 recreational parks statewide.

With the spread of Indian gaming, a gyrating stock market, California’s energy crisis, the dot-com implosion and a slowing economy, Hunt says NCOT plans to be very aggressive in marketing Nevada’s non-gaming rural attributes to the RV crowd as well as Nevada residents. The agency hopes its intense promotional efforts will help keep the state’s robust tourism market healthy during slower economic times. "We are going to be very focused on promoting non-gaming, adventure-oriented experiences. Many government entities will be working together on these campaigns," Hunt said. NCOT’s budget for its fiscal year ending June 30 is about $11.2 million.

Looking for Olympic Gold

In addition to the RV and in-state travel promotions, the commission will also be spending some of its dollars mining for Olympic gold. Tourism officials are confident the 2002 Winter Olympic Games in Salt Lake City will bring millions of dollars of additional tourist revenue to Nevada before, during and after the February games. The Olympics have already prompted a number of land speculators, developers and travel agency representatives to visit the state and take a closer look at such areas as Elko County. The 17,000-square-mile region has about 55,000 residents and some of the state’s most pristine and stunning scenery. It is also home to the small communities of Carlin, Wells, Elko, as well as West Wendover, which just happens to sit on the Utah-Nevada border. Since Olympic attendees travel on average 150 miles to 200 miles daily to view events, a city like West Wendover — 130 miles west of Salt Lake City on Interstate 80 — should benefit as a result of the games. People have already begun booking rooms in the town and in other cities throughout Nevada that are within easy traveling distance to Salt Lake City. And don’t count Las Vegas or Reno out just because they’re situated a bit further from the action. Hunt says flight times from both markets are short and both cities have excellent air service to Salt Lake City. Olympic attendees are expected to book rooms in these markets as well.

Nevada’s Olympic warm-up already includes a tourist information office in Salt Lake City. The $7 million project is a joint effort between the six states that border Utah: Wyoming, Colorado, Idaho, Arizona, New Mexico and Nevada. The office, which opened last summer, serves as a clearinghouse of information for tourist attractions in each of the six states. Funding for the project, which is being done in conjunction with the Utah Travel Council and Salt Lake Organizing Committee for the 2002 Winter Games, is coming from a variety of sources including state tourism groups like NCOT and federal agencies that oversee the West’s vast public lands.

In addition to the storefront office, the state is courting second-tier Olympic sponsors — corporations that donate less than $45 million to Olympic organizations — and reminding them Nevada has roughly 170,000 hotel and motel rooms. While more than 200,000 people are expected to attend the Olympics, the Salt Lake Convention and

Visitors Bureau estimates only about 18,000 rooms will be available for attendees in the

Salt Lake City area. "We’re very excited about what this could mean for Nevada, especially in rural areas," Hunt said.

Strategies to Combat Economic Slowdown

The Olympic spillover could help offset any slowdown in tourism that might occur as a result of the slowing economy. Earlier this year, gaming officials pointed to rising gasoline prices for the slower growth rates reported at some of Nevada’s drive-in markets including Laughlin, Mesquite, Reno’s Washoe County and Elko County. However, NCOT officials don’t believe the higher prices or California’s energy woes will dampen the state’s bustling tourist market in the long run. "Realistically, you would expect these factors will take a bite out of people’s discretionary income," said Chris Chrystal, media relations manager at NCOT. "But things stabilize and people find a way to mitigate the damage or financial hurt. Everyone still needs a vacation and a chance to get away," she said.

Indeed, most tourism officials believe Nevada, particularly Las Vegas, the engine that drives the state’s tourist-based economy, will weather whatever economic storms come its way in the short term. "While the tourism industry is very fragile, Las Vegas has always proved to be quite resilient when [negative] external factors occur," said Rob Powers, vice president of communications for the Las Vegas Convention and Visitors Authority. "It really is remarkable."

The city fared well during the Gulf War some 10 years ago when many people decided to put off airline travel in light of possible terrorist reprisals. At the time, LVCVA cleverly and quickly developed a new marketing campaign targeting Southern California. The effort, which proved successful, encouraged people "to play in their own backyard." Even when California’s economy tanked in the early and mid-’90s, Las Vegas came out relatively unscathed, considering the fact that nearly 30 percent of the city’s tourists hail from the Golden State.

Las Vegas Outlook

Analysts credit Las Vegas’ resiliency to a number of factors including the metamorphosis that occurred along the Strip during the mid- to late-1990s. During this period, the city experienced an unprecedented casino-building boom. Numerous new properties opened along the Strip, including high-end resorts like the Venetian, Bellagio and Mandalay Bay, which ranks as one of the top-10 trendiest hotels in the world according to a recent poll by Conde’ Nast Traveler magazine. "We’re moving into a [hotel] product where rates range from $150 to $200 (or more) a night. It’s no longer a $30-a-night, slots-of-fun market," said George Connor, vice president of retail properties at Colliers International, a commercial real estate brokerage firm. "People who stay at the resorts have a lot of disposable income to spend on the city’s finer amenities like shopping and entertainment. This is not your father’s Las Vegas. We’ve really moved the bar up to where we can pamper even the most finicky patron."

Just a little more than a decade ago, people came to Las Vegas for one reason —to gamble. But the Strip’s continually-changing landscape now includes elaborate themed shopping centers that encompass millions of square feet and house some of the world’s most exclusive names in retailing. There is the Grand Canal Shoppes, a 500,000-square-foot retail center housed at the Venetian; Desert Passage, a 500,000-square-foot Arabian

Nights’ themed shopping center at the newly opened Aladdin; and the Forum Shops at

Caesars, which now boasts some 500,000 square feet of shopping space.

Even more retail venues are in store. The Rouse Co., which owns Fashion Show Mall, is spending several hundred million dollars to expand and upgrade the shopping center. The project is tentatively slated for completion in early 2003 and will include the addition of 1.2 million square feet of new retail space. Simon Property Group Inc., owner of the Forum Shops, will break ground this year on a more than $100 million addition to the center that will bring another 200,000 square feet of retail space to the mall. The city’s dazzling shopping centers also house a host of high-end restaurants that feature some of America’s most celebrated chefs, including Wolfgang Puck, Emeril Lagasse and Charlie Palmer.

The Strip’s burgeoning retail and dining markets have been a big draw for Las Vegas visitors. In 1999, for instance, tourists spent nearly $88 per shopping excursion, up from about $80 in 1998. Food and beverage expenditures also jumped from $140.80 in 1998 to $170.76 in 1999. Visitors are also spending more on the city’s ever-growing entertainment offerings. Average trip expenditures on shows increased from $28.02 in 1998 to $33.84 in 1999. And the city’s growing non-gaming amenities appear to be keeping visitors in Las Vegas longer. In 1999, the average tourist stay was 4.7 days, up from 3.7 days the prior year. "Las Vegas’ strength is that it is always changing and improving. The words stagnation and Las Vegas are never used in the same sentence. People are always going to want to come here because there is so much to do and see," Powers said.

At the same time gaming has been spreading throughout the United States, Las Vegas has been experiencing extraordinary growth. Last year, nearly 36 million people visited the city, a 6 percent increase from 1999, when about 34 million people came. And that number represents a whopping 10.5 percent gain from the prior year. LVCVA is projecting a much more modest gain of 2.3 percent increase in 2001. "We’re focusing on a stabilizing period, since there won’t be any new properties opening on the Strip," said Kevin Bagger, LVCVA’s senior research analyst.

Recent resort openings on the Strip have also helped to propel passenger traffic at McCarran International Airport. Last year, McCarran reported a 9.3 percent jump in passenger traffic to nearly 37 million people. That was up from about 34 million travelers in 1999.

Reno Redefines Itself

Unfortunately, air passenger traffic in Reno has not shown similar figures. In fact, traffic dropped nearly 8 percent in 2000 to 5.5 million people. Most of the decline is attributed to American Airlines’ purchase of Reno Air in 1999. American opted to reduce its service in Reno by 60 percent in July 2000. Adam Mayberry, public affairs manager for Reno/Tahoe International Airport, said the passenger fall-off isn’t quite as drastic as it first appears when you consider the airport served as Reno Air’s hub market. "A lot of the drop was due to the fact that we had a lot fewer passengers connecting to other flights," he said. "Still, traffic overall at the airport is down." Despite the passenger slowdown, the tourist count in the Reno/Tahoe area rose 2 percent last year to about 5.2 million people.

Nevertheless, tourism officials haven’t been satisfied with the overall visitor count for the past few years, which on average has grown just a percent or two. In an effort to beef up those numbers, the Reno-Sparks Convention & Visitors Authority (RSCVA) is putting a much stronger emphasis on luring more convention business to the area. The agency recently hired Jeff Beckelman as its new president and chief executive officer. Beckelman, who assumed his new position in March, formerly served as vice president of sales and marketing at the Venetian Resort Hotel Casino and Sands Convention Center in Las Vegas. RSCVA is hoping Beckelman’s 11 years of experience at the Venetian will be a big asset in drawing more conventions to the Northern Nevada market.

Last year, nearly 181,000 people attended conventions in the Reno/Tahoe area. They spent nearly $173 million and booked more than 314,000 rooms. RSCVA is projecting those figures will jump to $192 million and 320,000 respectively in 2001. To help keep those numbers growing, RSCVA recently broke ground on a $105-million project to expand and upgrade its convention facilities, which currently total about 370,000 square feet. When completed in October 2002, the new center will be large enough to accommodate the size requirements of 90 percent of the nation’s convention business. "With the spread of gaming, we’ve come to realize just how important the convention business is overall to this market," said Deanna Ashby, RSCVA’s marketing manager.

In addition to sprucing up its convention facilities, the agency also decided two years ago to scrap its "Biggest Little City" Reno campaign. Instead, RSCVA is heavily marketing the Renoe/Tahoe area as a four-season destination resort. "We decided to re-brand the market," said Ashby. "There are so many outdoor activities here that people can enjoy all year long, with the added value of gaming. So we’re concentrating on promoting all the adventure sports like water rafting, skiing and golf."

The Reno/Tahoe area has 40 golf courses and is home to the largest concentration of ski resorts in North America. Those resorts are nestled against some of the West’s most breathtaking mountain terrain. But despite its striking natural surroundings, Reno has long suffered from an image problem. Prior to taking over RSCVA’s advertising account two years ago, the Rose-Glenn Group decided to study people’s perceptions of the Reno/Tahoe area. The agency went to cities such as Dallas and Chicago where it showed color slides of the area to focus groups. Participants, who had never visited the Reno/Tahoe area, were often stunned by its beauty. "A lot of people just said, ‘Wow.’ People associated words like ‘dust’ and ‘old’ with the word Reno. We’ve put a lot of new marketing strategy in place to visually change people’s perceptions of the area," said Valerie Glenn, president and chief executive officer of Rose-Glenn.

RSCVA’s Ashby admits her agency has a lot of work to do to dispel old images and breathe new life into Reno’s tourisism industry. But she is confident that under Beckelman’s leadership, tourist numbers will continue to rise. "The entire community has come together, and realizes gaming isn’t the end-all answer it used to be. We all know we have to be much more focused in how we market this area," said Ashby. "Good things are already beginning to happen. The visitor count is up and we have extremely strong leads for more convention business."