Tourism officials to focus on Calif. visitors

Monday, Sept. 17, 2001 | 10:08 a.m.

Tourism officials, bracing for an unprecedented falloff in business, expect to go "back to the basics" when marketing Las Vegas to a nation that is nervous about flying after the terrorist attacks in New York City and Washington, D.C.

For Manny Cortez, president of the Las Vegas Convention and Visitors Authority, the basics means promoting the city in California and other surrounding states where residents can drive here in a short period of time.

"If people won't fly, we're going to have to focus on the regional aspect of our marketing over the next two or three months," Cortez said. "We'll have to come up with incentives to get people to drive here."

Historically luring Southern Californians to Las Vegas has been the most important aspect of the tourism industry's marketing plan.

"We can count on Southern California," said R&R Partners President Billy Vassiliadis, who has the task of spearheading the LVCVA's latest marketing effort. "It's sort of the basics that got us here -- people who want to take a reality break and escape for a couple of days from the negative and bad that's going on."

Like most Americans, tourism and casino industry executives still are in shock over the terrorist hijackings and attacks that brought down the World Trade Center in New York City and damaged the Pentagon in Washington, D.C., killing thousands.

They aren't thinking clearly about marketing strategies.

"The major focus is on the families and the victims of the horrific things that have happened to the people of our country," said Terry Lanni, chairman and CEO of MGM MIRAGE, one of the state's largest gaming companies.

But Lanni -- whose company donated $1 million last week to the American Red Cross for victims of the attacks -- acknowledged that there will be a drop in business in Las Vegas until Americans rebound from the tragedy.

"How long it will be is pure speculation," he said.

But one well-placed tourism source said the slowdown could be a protracted one.

"This could be potentially bad for five or six months," the source said. "We're in for a long haul here."

A casino industry insider agreed.

"This can't help but be bad times for a while," the insider said. "It could be pretty severe in the first weeks and months. If people are going to cut back on flying, they'll cut back on recreational trips first, and we're the biggest recreational destination around."

Added still another leading casino executive: "I think this is going to be more severe than people think. There are going to be a lot of ramifications."

Many within the tourism industry believe an overall strategy must be put in place soon to address the anticipated slowdown. But most have no idea how to formulate that strategy.

"It's going to be a moving work of art," said Bill Bible, president of the Nevada Resort Association, the gaming industry's political arm. "It's going to be flexible depending upon the circumstances that arrive.

"I don't think anyone needs to panic. You really don't know what to plan for until events unfold."

Still, the uncertainly over the Las Vegas tourism market has caught the attention of Gov. Kenny Guinn, who's worried about how it will affect state government, which is funded primarily from gaming and sales taxes.

"It doesn't look good for us at this time," Guinn said. "Our income is down. We did not have a good July and August in terms of our revenue projections."

Guinn met last week in Carson City after the terrorist attacks with his top budget people to prepare for the expected downturn in the economy.

"If this has any kind of sustaining effect on us, then we may very well have to take some actions to prevent us from getting into budget trouble," he said.

That means budget cuts.

Bible, a former state budget director and Gaming Control Board chairman, said the predicament facing Guinn is a result of a state that relies too heavily on one industry as a source of revenue.

"It certainly demonstrates that there's an advantage to having a broader tax base," he said.

The news, meanwhile, on the tourism front this weekend couldn't have been worse.

Because of the grounding of all commercial airlines, occupancy rates at several major Strip resorts were projected to be only 65 percent. Most weekends those rates are 90-95 percent.

"This may be one of the lowest weekends in our history," Cortez said. "This is obviously a very serious thing."

Even the LVCVA's initial strategy to return to the basics is not without peril.

It's no secret that Southern Californians, facing rising energy costs at home, have had less money to travel to Las Vegas in recent months. And there seems to be no relief in sight on the energy front.

At the same time there has been talk that the terrorist attacks and America's ultimate military response could trigger another oil crunch, which once more could lead to soaring gasoline prices.

By now no one on the Strip has to be told what that means to tourism here.

For the most part, however, tourism and casino executives remain upbeat about the chances of Las Vegas eventually overcoming the forecasts of economic doom.

They believe that once Americans shed their fear of flying and get used to tougher safety measures at airports, they'll get back to their normal routines. And that means coming to the city of Glitz for rest and relaxation.

Indeed Las Vegas has survived economic adversity in the past, such as the Gulf War in 1991 when Americans were last glued to their television sets. Eventually, the country returned to its normal travel patterns.

"Las Vegas is pretty resilient and so are the American people," Cortez said. "I'm not sure that they they're going to allow something like this to affect their vacation plans."

"In the longterm I think we'll be able to survive this."

Mayor Oscar Goodman, a member of the LVCVA board, has even higher expectations.

"I think business may be even better than it has been," he said. "People will be looking for a bit of a release because of their bent-up frustration and emotional sadness over this tragedy, and they will feel that they have to come here."

Most, though, aren't as optimistic as the mayor.

"Anything that scares people or impedes the use of air travel will have a detrimental effect on the economy of Las Vegas and the state of Nevada," American Gaming Association President Frank Fahrenkopf said. "It's going to take a while before all of this sinks in."

And Vassiliadis sounded as if he was preparing for the long haul.

"These are challenging times for us," he said. "We're going to have to be thinking a lot harder than we have in the last five or six years."

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