Vegas baggage-handling firm on fast track for growth

Wednesday, Nov. 22, 2000 | 10:57 a.m.

A recent customer of Certified Airline Passenger Services (CAPS) delivered the kind of testimonial company executives dream about.

"I'm going back to the casino now," said Dick Buswell, Santa Rosa, Calif., after dropping off his luggage at CAPS' counter at the Bally's hotel-casino. "I now have time to play for another hour."

That's music to the ears of Jerome Snyder, chairman of the board of CAPS, a Las Vegas company that is on a fast track for expansion.

"You couldn't ask for a better endorsement," Snyder said with a grin. "Where did that guy go? We need for him to talk to some of the other resorts."

To Snyder, customers like Buswell are part of the success equation for CAPS, whose business plan is as simple as they come.

At present, CAPS doesn't offer baggage delivery from McCarran International Airport to hotels, a service provided by some competitors.

The MGM Grand hotel-casino and one of its sister properties, New York-New York, as well as Park Place Entertainment's five Las Vegas resorts -- Caesars Palace, the Flamingo, Bally's, Paris Las Vegas and the Las Vegas Hilton (which is being sold) -- have airport counters.

They are the only airport counter hotel desks in the nation, said Debbie Millett, a spokeswoman for McCarran.

Millett explained that those airport counters have all the services a hotel desk have, including check-in, keys, concierge and dinner and show reservation capability. They also can arrange to transport baggage to the hotel.

But on the return trip, CAPS offers baggage transportation and flight check-in, doing it for even more hotels and airlines.

Passengers flying on CAPS-contracted airlines staying in contracted hotels deliver their bags to a counter near the front desk two to 12 hours before their flight time. They check in for their flights as they would at the airport, get their seat assignments and boarding passes and leave their suitcases behind.

When the customers go the airport, they can go directly to the gate. CAPS delivers the bags from the hotel to the plane. The price: $6 per person.

"I know of a lot of people who would pay $6 just to stay out of some of those long lines at McCarran," Snyder said. "Many of our customers are locals who check in early with us, then aren't so rushed when it's getting close to flight time."

While CAPS handles the commerce with the airlines and hotels, its sister operation, American Baggage Co., moves the luggage. The entire operation employs 150 people. The companies have 24 40-foot trucks and six 1-ton cargo vans.

CAPS, which began operations in January 1999, started at one hotel -- the Imperial Palace -- working with one airline -- Reno Air.

Las Vegas-based National Airlines is credited with developing the concept of direct delivery of tourists' bags to a hotel and used the service to differentiate itself from competitors. But National only delivered to hotels belonging to its investor partners, the Rio and Harrah's.

CAPS now has counters in nine hotels -- the Aladdin, Bally's, the Flamingo, the Imperial Palace, the Las Vegas Hilton, Luxor, Mandalay Bay, Paris Las Vegas and the Sahara. It is expanding Friday to the Riviera and, by the end of the month, will have a counter at Alamo Rent A Car. The company also is in negotiations with other properties, including the Bellagio.

The company has contracts with America West, Canada 3000, Delta, Southwest, Sun Country and Virgin Atlantic airlines and is in negotiations with American, United, Continental, TWA and a charter carrier, WestJet.

Airlines look at the service as a means of adding value to their product.

"With our new check-in program, we hope to enhance our passengers' experience by providing them a quick and easy alternative to the airport," said Todd Pawlowski, vice president of customer service for Virgin Atlantic Airlines, which began service between London and Las Vegas in June.

"Travelers can now make the most of their Las Vegas vacation by extending time at their hotel," he said.

"It's a win-win situation for the hotels and our customers," said Mike Barfield, Las Vegas station manager for Delta Air Lines. "Because they are required to check out of their hotel room by 11 o'clock, our passengers can check their bags with CAPS and don't have to worry about them. They can spend a good portion of the day at the hotel instead of at the airport."

Privately held CAPS would not disclose details of its financial performance, but Snyder said he expects the company to be profitable by the first quarter of 2001. Marty Moore, vice president of business development, added that the company has experienced double-digit revenue growth, month over month, since the first day of operations.

But adding hotels and airlines only scratches the surface of the company's growth plans, Moore said.

CAPS is investigating establishing counters in neighborhoods so that traveling Las Vegans can check in well before flight time and avoid lines. Company executives are considering strategies for also providing service on the arrival side, possibly by delivering luggage directly to hotels for visiting tourists.

But probably the biggest potential expansion is putting CAPS service in other airports. Snyder said the company is considering the nation's 20 largest airports; meetings are planned later this year at Los Angeles International.

The company expects to add two cities per quarter over the next two years.

"We know this is something that will work," Moore said, "because we're getting inquiries from other airports asking when we're going to be there."

CAPS may get some indirect public assistance on that front -- a move that has a group of critics screaming at Sen. Harry Reid, D-Nev.

Reid engineered a $2 million transportation appropriation through the Federal Aviation Administration to study remote check-in to alleviate congestion at the nation's airports, one of several issues related to the aviation industry that Reid has watched closely.

Although the grant would be funded as an FAA security appropriation, critics characterize it as pork-barrel politics since the grant ultimately would help CAPS, the only luggage transport company certified by the FAA.

The grant would finance a consortium comprised of representatives of CAPS, Unisys Corp., UNLV, UCLA, Los Angeles International Airport and either Delta or Southwest Airlines. The goal: to duplicate CAPS' system in other cities.

Critics led by Sen. John McCain, R-Ariz., and the Washington-based Citizens Against Government Waste, characterize the grant as a government-backed scheme to encourage Las Vegas tourists to spend more time in casinos. Snyder says it's an unfair characterization.

"Because we already have FAA approval, we would be a perfect beta site to test whatever ideas come out of this consortium," Snyder said.

The group will consider the issues of remote tracking of baggage and exploiting existing technologies for the advancement of remote check-in, which ultimately would disperse congestion at airports. Snyder said the biggest problem with existing technology is that individual tracking systems are not compatible with each other.

He said a decision hasn't been reached on whether Delta Air Lines, Atlanta, or Dallas-based Southwest would be represented on the consortium. Snyder said the airline that shows the most interest probably would be selected.

The CAPS plan to establish neighborhood offices from where baggage could be shuttled to the airport, Snyder said, could certainly cut congestion at the airport. One aspect that requires study is determining what times such an office would need to be open.

The counters at the hotels, for example, operate daily from 7 a.m. to 3 p.m., which fits nicely with room checkout times, Snyder said. But he agreed that a counter at Alamo Rent A Car should have different hours to accommodate a different market.

Snyder said the biggest challenge facing the company is marketing it to passengers. He figures that relationships developed by the company with airlines in Las Vegas will cross over to other cities and some hotels are affiliated with chains that operate elsewhere.

But to reach passengers, CAPS plans to work with travel agencies and the airlines with which it contracts. Those airlines have their own frequent-flier and tour packaging programs with their own lists of regular customers that could use the service.

Diane Patten, station manager for Southwest Airlines in Las Vegas, said the airline is placing information about CAPS in ticket jackets of passengers bound for Las Vegas. The airline also includes information in packets sent to tour package holders.

"We're still in the growing stage with them," Patten said. "But it's a great customer service we can offer."

She said some hotels forward more bags to the airline than others, leading her to think that more advertising is needed in some of the hotels to make the company fly.

Virgin Atlantic makes announcements about CAPS on the plane just before it arrives at McCarran, said Robert Waldron, operations manager for the airline in Las Vegas.

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