Sunday, September 10, 2006

Tens of millions of dollars are spent each year encouraging John and Jane
Traveler to make Las Vegas the site of their next getaway. But what happens
here won't stay here if people can't get here in the first place. And later
this month, a different Las Vegas message -- as in "Don't come here, at
least not driving the way you'd normally drive" -- will resonate in some of
this city's largest feeder markets. That curious reversal stems from a
series of weekend road closures needed to improve Interstate 15, the primary
roadway between Las Vegas and the Southern California metropolises of Los
Angeles, San Diego and all burgs between. Upcoming construction near Devore,
Calif., is expected to cause delays so lengthy that the California
Department of Transportation has asked travelers to find alternate routes,
even if those detours add hours and miles to the journey. CalTrans
encourages weekend travelers:
- To fly.

- To leave home earlier than normal and stay away longer.

- To remain at home altogether to avoid congestion.

The latter option is unacceptable to Southern Nevada, whose travel industry
relies on dollars from the Golden State. And to keep that cash flow flowing,
businesses here already are taking steps to pacify their Southern California
customers.

Harrah's Entertainment and Boyd Gaming Corp. will mail their customers
letters to alert them of the impending work. MGM Mirage might do the same,
while the Las Vegas Convention and Visitors Authority is readying an
advertising blitz of its own.

"The decision on how aggressive we'll be with an advertising campaign will
be made as the weekends progress," Terry Jicinsky, the convention
authority's senior vice president of marketing, said Thursday.

Newspaper, radio and Internet ad concepts are in development so they'll be
ready to go if needed, Jicinsky added.

CalTrans on Aug. 31 unveiled its long-awaited list of dates when it plans to
shut down portions of I-15 south of Cajon Pass. The closures are needed to
replace damaged pavement, add a northbound truck-climbing lane and improve
the roadway's shoulders and guardrails.

The first closures will affect some southbound lanes from Sept. 29 through
Oct. 1. A larger shutdown is scheduled the following weekend affecting
traffic in both directions of I-15 and I-215.

Similar shutdowns are scheduled each weekend next month. After a winter
hiatus, more will occur in 2007 as CalTrans wraps up its $26 million
improvement project.

Casino operators stressed that the road work is a short-term inconvenience
that will bring long-term benefits to the local economy. Last year, 29
percent, or about 11.2 million, of Las Vegas' nearly 38.6 million visitors
hailed from Southern California, according to visitor surveys conducted for
the convention authority.

Those surveys also indicated that 53 percent of all visitors last year
traveled by automobile or bus; that percentage of drivers probably was
higher among Southern Californians, given their proximity to the Silver
State.

The Palms has become a haven for younger, well-heeled Southern Californians
looking to blow off a little weekend steam in the desert. Still, owner
George Maloof shrugged off the expected negatives associated with the I-15
work, adding he has no plans to offer special incentives to customers
affected by the delays.

"I don't know if anyone has a choice, really. You just live through it,"
Maloof said. "It's like expanding a casino. For a time it's inconvenient,
but at the end of the day it benefits everyone.

"Looking long-term, if (the I-15 improvements) are going to help, you've got
to get them done."

The closures will affect different properties in different ways.

Resorts such as Bellagio, Wynn Las Vegas, Caesars Palace and The Venetian,
for example, rely more on fly-in customers than Excalibur or Imperial
Palace, for example. But every local property will be affected in some
manner, industry sources said.

Strong advance bookings at MGM Mirage's 10 Strip properties have that
company expecting only a "marginal" impact" from the construction, said
spokesman Gordon Absher. Its resorts' marketing departments are studying ads
and mailers that would alert guests of the road work, but no firm plans to
deploy them are set.

Instead, MGM Mirage might step up its sales efforts in areas unaffected by
the highway closures by placing more ads to increase visitor counts from
Phoenix, the Bay Area, Denver or Southern California's High Desert
communities north of the road work.

"Las Vegas is a compelling destination. People are going to come," Absher
said.

Harrah's Entertainment, which operates eight hotel-casinos in Las Vegas and
Laughlin, has its investment relations director monitoring the impending
closures because of their potential financial effect.

Still, the company's western division president said this week he does not
believe the closures will deter many people from driving.

"It will be an inconvenience, but one most people will understand and allow
an extra half-hour for," Tom Jenkin said. "I think that most people are
tolerant (of delays), as evidenced by (heavy I-15 traffic encountered) each
holiday weekend."

Beyond the mailings, Harrah's won't do anything unusual for customers
affected by the congestion.

"We'll monitor customers' reactions when they're here, but hopefully people
will simply time their departures better" to avoid congestion, Jenkin said.

Unlike its Las Vegas competitors that have no Southern California
properties, Harrah's could steer traffic toward Rincon, an Indian casino it
operates just north of San Diego.

The Pechanga Resort & Casino, which sits just off of I-15 in Temecula,
Calif., has for months placed radio and TV ads enticing Southern
Californians with promises of easier accessibility vs. Las Vegas and other
nearby Indian casinos. Spokeswoman Ciara Coyle said the property's tag line
"The Shortcut to Vegas" should ring particularly true next month.

"It's hard to say if we'll see any measurable drive-in traffic from the
closures, but we'd certainly welcome the added business," said Coyle. She
would not rule out the use of ads specifically targeting the I-15 closures,
though Pechanga has none currently planned.

Boyd Gaming spokesman Rob Stillwell said his company also will advise
Southern Californians with October reservations of the roadwork in advance
of their departure. Nonetheless, Boyd's October bookings have not shown any
weakness so far.

Boyd Gaming won't offer incentives to entice customers to drive through the
construction, Stillwell said, but it might provide some sort of "goodwill
gesture" after the roadwork ends to win back visitors who were put off by
October's inconveniences.

Absher and Jicinsky praised CalTrans for its efforts to plan the closures
for periods that minimize their negative effect on Las Vegas.

"The consumer will come to understand that there's an end to this, and we
think that will work to our advantage," Jicinsky said.