Venetian alliance aims for European visitors

David Strow

Thursday, Feb. 7, 2002 | 10:52 a.m.

The Venetian announced Tuesday it entered into a marketing alliance with one of the world's largest upscale hotel chains, in a move designed to shore up international visitation to the $1.5 billion Las Vegas Strip resort.

Under its new alliance with the Venetian, London-based Le Meridien will market and book reservations for the Venetian through its international reservations network. That network currently has about 1,000 sales agents, Le Meridien estimates.

Le Meridien currently operates 144 upscale hotels in 57 countries. Its holdings include properties in New York, Los Angeles, Chicago, Boston, Dallas and New Orleans.

International visitation took a severe dip following the Sept. 11 terrorist attacks. Venetian officials hope Le Meridien will be key in getting some of those visitors back.

"They're dealing right with the customers we're looking for, and they're in all the right cities," said Michael French, senior vice president of operations for the Venetian.

Juergen Bartels, chief executive of Le Meridien, vowed he will do as much as he can to encourage international visitors to come to Las Vegas.

"I will put my heart and soul into this, because I am proud of this hotel," Bartels said.

Bartels has ties to Las Vegas -- prior to joining Le Meridien, Bartels served as chief executive of Starwood Hotels & Resorts Worldwide's hotel group. At that time, Starwood owned Caesars Palace and the Desert Inn.

"We want to be the No. 1 upscale hotel company in the world," Bartels said. "How can you be No. 1 and not be represented in the No. 1 resort city in the world?"

Asia and Pacific Rim have always been a substantial international market for Las Vegas -- in 2000, about 700,000 people visited Las Vegas from the Pacific Rim markets of Japan, South Korea, Taiwan, Hong Kong and Singapore. Le Meridien does have a presence there, with hotels in Tokyo, Bangkok and Singapore.

But Le Meridien's presence is far more substantial in Europe, where it has 46 hotels in 17 countries. It is the largest hotel operator in Paris and London, Bartels said.

In terms of visitor volumes, Europe does rival Asia as a source of Las Vegas visitors. About 723,000 visited from the United Kingdom, Germany, France, Italy, Belgium, the Netherlands and Luxembourg.

But the difference between the European and Asian visitor profile is significant.

"You have this unusual high-end market (in Asia) that Las Vegas has catered to," said Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno. "(Europeans) tend to not be premium players ... not to the numbers or revenue volumes Asians bring."

One goal of the Le Meridien alliance is to try to draw high-end European customers to the Venetian, French said.

"(Europe) has been an O.K. market from a gaming profile, but it isn't demographically the same as Asia," French said. "That's why we like this affiliation. They're dealing with the people that really match our profile. It's hard to reach those kind of customers in a way that makes sense (financially)."

One issue with European travel to Las Vegas is that many European customers tend to stick to East Coast markets, Eadington said.

"Europeans tend to go to New York as a rule, and they tend to think New York is America," Eadington said.

There's also a sense among many Europeans that America in general -- and Las Vegas in particular -- isn't sophisticated enough by European standards, Bartels said.

"Some Europeans talk negatively about Las Vegas, but I don't agree with them," Bartels said. "I like Las Vegas. This (the Venetian) is sophisticated, a European-style hotel. Once they (Europeans) come here, they'll love it.

"I'm now on a crusade, and I'm going to teach my people about (Las Vegas) myself."

Eadington isn't convinced the Le Meridien-Venetian alliance will have a dramatic effect on European visitation to Las Vegas, though he does believe it could have a notable financial benefit for the Venetian. Still, he noted, Las Vegas' profile in Europe is rising, particularly after Virgin Atlantic began non-stop flights between London and Las Vegas.

"I would expect, in terms of (visitor) preferences, that Las Vegas has climbed up fairly high," Eadington said. "Las Vegas has picked up a lot of attention in Europe."

But the biggest benefit of all for the Venetian, Eadington said, is plugging into the reservation system of a large hotel operator.

"The value of reservation systems is fairly strong, and that's one of the reasons the Aladdin did so poorly compared to MGM (MIRAGE), Park Place (Entertainment Corp.) or even Harrah's (Entertainment Inc.)," Eadington said.

"If you link into a network, so you're not an orphan property, it makes a difference."

Rather than counter-referrals, Le Meridien's benefit from the alliance is a referral fee that will be paid by the Venetian for each customer booked into the hotel through Le Meridien.

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