Wings Magazine

Would New Las Vegas terminal be a gate to Asia?

Nov. 25, 2011, Las Vegas, Nv. -  Never mind "What happens in Vegas stays in Vegas,'' Las Vegas's enigmatic tourism slogan. Perhaps the new slogan for America's gambling capital should be "Stop over for a quickie in Sin City.''

November 25, 2011  By Carey Fredericks

A quick visit, that is. Las Vegas tourism officials are betting that a new air terminal will lure some travellers to use Las Vegas as a regular stopover en route to Asia or other foreign places.

Some might never leave McCarran International Airport, while others might decide to make casinos happy by hopping in a cab and spending a few hours gambling.

Either way is fine with the airport. It just needs enough people travelling here to justify a $2.4 billion expansion conceived when Las Vegas was much busier. The new terminal opens in June.

The city still expects most visitors to vacation for longer periods, but the new pitch marks a big change from past years when Vegas could count on filling planes solely as a destination. Since
the Great Recession crushed tourism, airlines have cancelled Vegas-bound routes and left casinos scrambling for customers.


The new terminal also would let travellers heading to Asia or elsewhere avoid longer lines at customs in Los Angeles or San Francisco and take advantage of cheap fares to Vegas.

At the same time, airport and tourism officials are pitching the new terminal to airlines based outside the United States as a destination for direct service, pointing to regular service from England, South Korea and Mexico as successes that justify more international flights here without stops elsewhere first.

The new terminal, conceived before the meltdown, will boost the airport's total capacity to up to 53 million passengers a year. The airport's existing international terminal with four gates will close
once the new terminal opens, and more than 20 airlines already plan to use it, offloading some traffic from existing gates.

Korean Air flies directly from Las Vegas to Seoul three times per week, and is looking to increase to daily flights.

"We see Las Vegas not just as an origin and destination point, but also as another hub for us,'' said John Jackson III, vice-president of passenger marketing and sales for Korean Air's Americas region.

"We aim to connect passengers from Salt Lake, from Denver, from Phoenix, from Albuquerque via Las Vegas when they are going to Seoul,'' Jackson said. "And on the other end of the Pacific, connecting Seoul to one of those 80-something destinations that are served nonstop from Seoul.''

The new terminal will not offer direct service to China. Tourism and airport officials cite visa requirements for U.S.-bound Chinese travellers as a big obstacle in developing that market, but they say they're working on it and are in talks with Chinese carriers.

"Air development is a marathon, not a sprint,'' said Cathy Tull, senior vice-president of marketing for the Las Vegas Convention and Visitors Authority, which is one of the few U.S. tourism agencies to
maintain an office in China.

But at least one airline industry expert says it will not be easy for Las Vegas to become the international gateway it aspires to be.

"I wouldn't call the new terminal a white elephant, but it's going to be quite empty for a long time if they're looking for flights to Asia,'' said Mo Garfinkle, chief executive of GCW Consulting, an aviation firm with expertise in business development in China and other Asian markets.

Beyond visa issues, Garfinkle noted that Vegas is not a hub for any major domestic airline. He said international carriers will not bypass cities where they already have partnerships with other U.S. airlines.

"I think it's too little, too late,'' he said. "It doesn't mean that they won't get something … but they need to realign their marketing focus to today's reality.''

Garfinkle also rejected the notion that the popularity of gambling as a recreational activity in Asian culture will draw large numbers of visitors. "The Asians don't need to come to Las Vegas to get Las Vegas-style gambling,'' he said.

Macau, in China, is the world's top gambling market, while Singapore also has emerged as a highly profitable gambling destination.

Air traffic to Vegas has declined from its peak of more than 47 million passengers in 2007 to fewer than 40 million in 2010. But while domestic air traffic has been relatively flat over the past year and a half, international passengers have increased 18 per cent. During the fourth quarter this year, capacity on foreign flights is scheduled to be 28 per cent higher than the corresponding quarter in 2010.

Increased customs capacity could keep those numbers trending even higher. The new terminal, scheduled to open June 27, will be able to process 2,200 passengers through customs per hour from flights arriving at six international gates. That is a big increase over current customs capacity of just 800 international passengers and three flight arrivals per hour.

The new terminal, roughly one kilometre long, will have 14 gates, plus connections via underground tram within security to other gates at the airport. Electronic signs will make it easy to change ticketing and drop-off areas depending on who is flying in.

"We could double (international flight capacity) before we start stressing out,'' said Randall Walker, director of aviation for Clark County.

Las Vegas loves international travellers because they stay longer than Americans and spend more, an average of US$400 more per person per trip, Tull said.

Walker said he does not expect the airport to crack the top 10 markets in terms of international travellers in the U.S. But he said that marketing the city as a stopover as well as a destination is
"an important component of our growth.''

In 2013, Las Vegas will host top air service executives at the World Route Development Forum — the first time the forum will be held in the United States. Tull said that will provide a chance to give influential decision-makers a first look at Las Vegas, and perhaps persuade them to send more flights Sin City's way.


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