Following NAJ’s Eighth Annual Active America China summit in Las Vegas, INBOUND sat down with Rafael Villanueva, senior director of international sales for the Las Vegas Convention and Visitors Authority (LVCVA) and talked about the destination’s growing international profile, as well as its ambitious goals for bringing more than 13 million international visitors a year to Las Vegas by the 2020-21 Fiscal Year. Following are excerpts from our discussion.
INBOUND: You’ve told us before that the CVA’s goal is to increase its percentage of international visitors to 30 percent of total visitors by Fiscal Year 2020-21. That’s up from 12 percent in 2008—about 4.5 million visitors—and the nearly 20 percent it is now. That’s a pretty ambitious goal. What prompted this, and what steps are you taking in order to reach that goal?
VILLANUEVA: Before the recession hit, we had developed an “International Vision” plan. China, as well as the other BRIC countries, played a vital role in our international development. Once we got to late 2008, things changed slightly, and we realized that this focus international was even more important.
We revised our strategy to immediately deal with this situation, while still being able to develop key markets for the future growth to Las Vegas. Our research told us that international travelers—while they’re not immune to changes in the economy—are going to travel, and travel to the US and Vegas recession or not. They stay longer, they spend more money, and this makes them an ideal visitor.
Rossi Ralenkotter (LVCVA’s president and CEO) communicated to the executive team, that the new international visitation goal was 30 percent. When my boss, Michael Goldsmith (Vice President of International Marketing) shared this news, it set me back in my seat. He said “The destination is doing its part by transforming itself into an international destination. We need to tell the world about it—show them and invite them to see for themselves.”
We are doing exactly that. We’re showing visitors that we don’t just have entertainment … we have the world’s best entertainment. We don’t just have shopping … we have world class shopping. We are truly a world class, international destination.
How does this happen? Our resorts, for instance, look at everything they do as part of their entertainment factor and how their guests perceive them. For them, a restaurant is more than just a meal … it’s an experience (He pointed to the Picasso restaurant in the Bellagio hotel, which has a collection of Picasso works on permanent display). They also do this with their entertainment. Cirque du Soleil has expanded its product, and you don’t have to speak or understand English to enjoy any of their eight shows. There is a 20,000-seat arena currently being built, and we have the new entertainment, dining, and shopping complex that recently opened between the Flamingo and the Linq Hotel and a new complex between the Monte Carlo and New York New York.
INBOUND: You’ve definitely got the room inventory to host the visitors—it’s more than 150,000 now, isn’t it?
VILLANUEVA: Right now, it’s between 150 and 152 thousand. It fluctuates. They’re always taking some out of inventory to refurbish and refresh them, but no one else is close to our total…and we’ve got more coming online in 2017, 2018 and 2019. Last year, we experienced an annual average of 86.6 percent occupancy—that’s over 127,000 rooms full every day last year.
INBOUND: Wow! Back to what it is you’re doing to go after the international visitor. How important is the Chinese market in reaching your goal of 30 percent?
VILLANUEVA: Extremely important—for two reasons. Number one, it has had amazing growth over the past two years and it is projected to grow even more over the next five years. Two, the potential represented by the customers, their spending habits and what they want to do is enormous.
INBOUND: When did you first decide to go after the Chinese market? As I recall, you were the first U.S. destination to have in-country representation in China—in Shanghai. Is this right?
VILLANUEVA: We’ve been going after China aggressively since 2008 when we hired our PR and communications firm, Brand Story (based in Shanghai), which is operated by Peter and Reene Ho-Phang. They have good marketing sense and they work well with the Chinese trade. But before we had this presence in China, it was former Lieutenant Governor Lorraine Hunt and Bruce Bommarito (former executive director of the Nevada Commission on Tourism), who began their own outreach and made Nevada the first state in the U.S. to have an office in Beijing authorized to promote tourism in China.
So, we were exposed to the customers before a lot of the other destinations. However, much of our success is due to the non-gaming element of what we have to offer. If you ever travel with us while promoting Las Vegas, you will never hear gaming mentioned during our presentations. There’s no need to. We now emphasize the variety of attractions, aside from gaming, that appeal to Chinese visitors, such as Las Vegas being the gateway to the Grand Canyon and the scenic Southwest.
I have to stress, though, that the market is still at the infancy stage for us. We still don’t have a non-stop direct flight from China, we’re very fortunate that we have great connections—and yes, we’re dependent on that.
INBOUND: How did hosting Active America China help you?
VILLANUEVA: It helped us several years ago, in 2011, when we hosted it for the first time. We did it for two purposes: First, for the delegates that Active America China brings us. It gives us the opportunity to showcase Las Vegas to the tour operators who come here. And second, it puts the market in front of our community … it places these Chinese operators in front of the people who want the Chinese business. And that is as valuable as conducting a sales mission to China.
INBOUND: Rossi Ralenkotter once said, “Everything we do is research-driven.”† Does this apply to the pursuit of the Chinese market as well? If so, in what ways?
VILLANUEVA: Indeed, we have a research department that looks at everything and we are proud to say we are a research-driven marketing organization. Unfortunately, as we start growing and developing new markets, including international, we are dependent on many other factors and outside sources. So when we have an opportunity to attend an event, such as the Asia Pacific Business Outlook, which we attended last week in Los Angeles, we take it. This helps us with learn more about countries that are important for Las Vegas. For me, it was one of those occasions when I felt like the least educated person in the room. In order to understand the travel picture, you need to understand all parts of the country and the total business outlook for the country—not just who the operators are—and our research department knows how to do that. They are able to put the travel outlook in context.
INBOUND: Speaking of operators—to what extent is the receptive tour operator community in the USA important to your international visitor growth? And what do receptives have to do to be a part of the strategy for LVCVA’s growth targets?
VILLANUEVA: U.S. receptive tour operators and tour operators are extremely important to us. In the past several years, the OTAs have been successful in bringing more traffic to Las Vegas. But, the further out the business is, the more that clients and customers need help. And receptives are not just selling the room, they’re selling the attractions, the guides, the services. They add value to what the client buys.
Also, it’s slightly complicated for an international operator to get a large portfolio of Las Vegas product on its own. Whether it is deposits, LOCs or contracted room block quantities, many times it is easier for the international operator and for the hotel in that case, to have a receptive operator handle the business. Plus, the receptive is selling, not buying the Las Vegas experience. And the success of Las Vegas is the experience. To put it another way, you can make more money selling attractions like the Grand Canyon as part of your Las Vegas package rather than just the hotel.
For us, it’s finding the right receptive operators for whom Las Vegas fits with their business model… and making it a success. And, when it comes to new or emerging markets, it means knowing which receptive out there are finding new operators that drive incremental visitation and not just taking away customers from their competitors.
INBOUND: Anything I’ve missed that you want to point out?
VILLANUEVA: Only that we’re still in our infancy in the world marketplace. We’re still new at this stuff. European nations have been working international markets, for decades. Can you imagine how this is going to be years from now?