Strip business weak despite heavy traffic

David Strow

Monday, Oct. 22, 2001 | 9:28 a.m.

Far fewer Americans may be taking to the air for Las Vegas these days. But more Southern Californians than ever before appear willing to take the trek along Interstate 15 to the Strip.

The Nevada Department of Transportation said traffic at I-15 at Primm spiked 15.6 percent between Sept. 10, 2000, and Sept. 11, 2001. By Sept. 13, it was up more than 19 percent, with 31,500 cars passing through Primm that day on I-15.

Kirk Anderson, vice president of the Highway Stations -- which compiled the NDOT numbers -- said he's never seen anything like it.

"Over the last 20 years we've done research on the highway, it's been evergreen ... up steadily 4 to 6 percent a year," Anderson. "Never have we seen the kind of instantaneous change that's taking place."

While growth slowed from the first week, it has not stopped. Every day but one from Sept. 11 to Oct. 1 showed some kind of growth in traffic.

Overall, I-15 traffic in September was up 3.9 percent to 1.08 million, but that number is misleading. From Sept. 1 to Sept. 10, the growth rate averaged 0.6 percent per day. From Sept. 11 to Sept. 30, it averaged just under 7 percent.

"It's a silver lining in what otherwise looks like a pretty dark cloud," said Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno.

The cause, most observers agree, is fairly obvious.

"It means people don't want to fly," said Alan Feldman, spokesman for MGM MIRAGE. "It's the reason our occupancy is anywhere close to normal. Otherwise we'd probably all be down close to 60 percent. As opposed to being at 60 percent (occupancy), it's great news."

Numbers provided by McCarran International Airport Friday reinforce that theory. In September, McCarran reported 2.12 million passengers went through the airport for the month -- down a whopping 28.3 percent from the year-ago period. McCarran was shut down from Sept. 11 to Sept. 13, and air traffic remains about 10 percent below pre-Sept. 11 levels.

To compensate, Las Vegas hotel-casino operators have cut room rates heavily since Sept. 11, and the Las Vegas Convention and Visitors Authority has launched a targeted marketing campaign on certain key markets -- particularly the major drive-in markets of Los Angeles, San Diego and Phoenix.

The result has been weekend occupancy of close to 100 percent on the weekends, but at far lower rates than normal.

That continued to be the case this weekend, Feldman said.

"Occupancy was closer to normal, but rates were still substantially down," Feldman said. "Revenues across the board remain down."

But Anderson doesn't believe all of the new drivers are necessarily bargain-hunters taking advantage of the low rates. Instead, Anderson said many are people who normally fly, who are turned off by long lines at the airports, are concerned about safety, and want the ability to leave immediately.

"These are not people that have historically driven, but have flown," Anderson said. "The prevailing feeling is, 'I still want to come to Vegas. Now I can drive there, it's an easy drive ... and I don't have to wait three hours in an airport and wonder who's sitting next to me (on the airplane)."'

Boredom from staying close to home since Sept. 11 may also be playing a role, Eadington said.

"You can only watch CNN for so long," Eadington said.

It is also possible, Eadington said, that some of the increase is coming from Southern Californians who are replacing trips to places like Hawaii and Mexico with driving trips to Las Vegas.

But Andrew Zarnett, gaming analyst with Deutsche Banc Alex. Brown, cautioned that not all of the increase is necessarily coming from tourists.

Zarnett said many of his friends make frequent trips from Boston to New York. Before Sept. 11, they took short-hop flights. After Sept. 11, they took trains.

The same dynamic is probably at work in Las Vegas, Zarnett said.

"I'm sure there's a significant amount of business that gets done between Las Vegas and Los Angeles, and I'm sure many of those people are driving their cars vs. flying," Zarnett said.