Heightened terrorism fears aren’t slowing down casinos

By Liz Benston

Monday, July 26, 2004 | 11:05 a.m.

With terrorism concerns once again making headlines as the Democratic National Convention kicks off today in Boston, casino officials in Las Vegas say they are prepared on the security front. But they don't necessarily have marketing contingency plans at the ready should a terrorist attack occur.

They also don't appear to be fearing for business on the Las Vegas Strip, which is witnessing record increases in revenue, profit and tourist volume.

Las Vegas Convention and Visitors Authority Chief Executive Rossi Ralenkotter said the agency has helped casinos develop a variety of security and marketing contingency plans with the help of local law enforcement officials.

These plans weren't developed recently in response to terrorism warnings of recent months, he said, but were crafted over time since Sept. 11, which grounded tourism in Las Vegas and forced the city to pull advertising and drastically reduce prices to encourage travel. As a result of the terrorist attacks, the tourism authority regularly communicates with casino security departments and law enforcement on a range of topics from national terrorist warnings to local security concerns, Ralenkotter said.

The federal government in May released a terror alert saying officials were hunting for suspected terrorists in an attempt to head off what federal officials said could culminate in an attack of Sept. 11 proportions in the United States this summer. Officials said they had no knowledge of a specific time, date or place for an attack.

Security precautions also have dominated coverage of the upcoming political conventions. Federal officials say they don't have any specific information regarding either Boston or New York, where the Republican National Convention begins Aug. 30. But they have expressed concern that the events could be tempting targets for terrorists.

The government's response to the conventions and terror alerts has been sensible rather than alarming, MGM MIRAGE spokesman Alan Feldman.

"I take great comfort in the fact that they've shared the information," Feldman said. "It would have been far more suspicious if we hadn't heard the government coming out and saying something or if folks in homeland security were saying 'Everything's fine, we haven't heard a thing.' "

The warning doesn't appear to be hurting business, he said.

"People will have to make up their own minds," he said. "The best thing about this is that people will be more sensitive to what's going on around them and (event) organizers will put in place the kinds of protections that unfortunately in this day and age we need to do."

The security contingency plan at MGM MIRAGE "is in a constant state of evolution" since Sept. 11 and is updated with new security alerts as well as advances in technology, Feldman said.

"To have a contingency plan in place that tries to anticipate every outcome is a practical impossibility," he said. "What I think all of us have learned from the Sept. 11 experience is to communicate better among ourselves and to create working groups so you have some ability to have a united message and unified strategy."

Behind the scenes, Las Vegas casinos have been operating under stepped-up security measures for months, including having security staff attend counter-terrorism workshops and filing emergency response plans as required by law with the state.

The level of comfort that tourists have with Las Vegas has fluctuated significantly over the past several months, according to public surveys released by MRC Group in Las Vegas.

Visitors appeared to adjust their tolerance for terrorist alerts upward after an increase in the alert level, according to MRC Group, which primarily conducts proprietary research for casino companies and other corporate clients.

About 36 percent of tourists surveyed in September 2003 said a "red" or "severe" terror alert warning -- the highest alert indicator -- would cause them to stay at home rather than travel to Las Vegas. About 22 percent said a "high" or "orange" terror alert would keep them at home. Those numbers changed after the government raised the terror alert to orange from yellow on Dec. 21. Surveyed on New Year's Eve, 44 percent of tourists said a red warning would keep them at home but only 15 percent said an orange warning would do the same.

New Year's Eve was a time of the most heightened terrorist concerns since Sept. 11 and coincided with FBI surveillance of business activity in Las Vegas. The terror alert was lowered back to yellow from orange in January.

MRC Group Chief Executive Jim Medick said people are more cognizant of terrorism alerts because of press coverage that has included Las Vegas as a top terrorist target along with other major cities. But a shifting comfort level into the "red zone" indicates that demand for a Vegas vacation remains high.

"People will say one thing and do another," Medick said. "As threats of terror become more real, (tourists) go to see Las Vegas anyway."

While hotels are still requesting terrorism surveys, Medick said they don't seem alarmed about the terrorist threat.

"They're more concerned with the general economics and the competition from Indian gaming than they are about terrorism -- how to get more people to come here with the economy being so tight," he said. "Terrorism is a concern but it's not what's keeping them up at night."

Duane Krohn, chief financial officer of the Riviera hotel-casino, said the property is among those that doesn't have a specific marketing contingency plan in place.

Coming up with such a plan is difficult because so much is based on specifics and the seriousness of the situation, Krohn said. "At some point it doesn't do any good to advertise if people are afraid," he said.

Management isn't dwelling much on terrorism fears in any case, he said.

Casino bosses have known that a higher stage of alert could come this summer, though the Strip and the Riviera in particular hasn't seen any evidence of business slowing down in advance of any warning, Krohn said.

"Bookings are still strong -- that's where we'd start to see a decline," he said. "The convention business is strong and things are looking pretty good."

According to a report released this month by the Las Vegas Convention and Visitors Authority, visitor volume was up about 6.9 percent in May to 3.3 million and convention attendance rose about 27.7 percent to 509,298 people -- a strong showing even given last year's somewhat depressed results surrounding the Iraq war, tourism officials said. Passenger traffic through McCarran International Airport rose 17.7 percent to just over 3 million people in May and rose again in June, by 14.2 percent versus June 2004.

The effect of supposed terrorism concerns can be found in such numbers, Ralenkotter said.

Las Vegas is on pace to break an all-time record of 37 million visitors this year, while other indicators from convention attendance to drive-in traffic are up, he said.

"Our indicators tell us that we aren't seeing an impact" from terrorism alerts, he said. Concerns about the economy and gas prices -- two indicators that have lately been improving for consumers -- also aren't registering, he added.