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Tourism and Gaming
Studies highlight urgency of McCarran upgrades
By Richard Velotta / Staff Writer

Taxis and passengers queue up at McCarran International Airport in September.
STAFF FILE PHOTO

A couple of studies released last week reflect how critical airports and airlines are to Southern Nevada's tourism economy, and there's a blend of good and bad news that can be derived from them.

First, the Airports Council International-North America unveiled its Passengers First Commitment campaign, based on a survey of airports nationwide and their needs to expand airport infrastructure.

McCarran International Airport participated in the survey, which found that airports should invest $87.4 billion from 2007 through 2011 on airport infrastructure just to keep up with anticipated demand.

Las Vegas' airport is among the top four in the nation that need to expand soon, the ACI-NA report says, or it will be in danger of losing traffic.

The good news for Las Vegas is that this report isn't news to McCarran's managers. They've been anticipating growth and planning for it for years. The only problem locally is that, like virtually all of Southern Nevada's infrastructure, airport officials didn't see the volume of the growth and how fast it would come.

Throw in a 9/11 disaster that detoured some of the growth needs for security needs and it's easy to see how McCarran got behind.

When McCarran's D gates opened in 1998, only two wings were built. No one expected the other two, forming an X shape, would be needed for more than a decade. But they are, and the third wing opened last year and the fourth is under construction.

Last week, In Business gave readers a first look at Terminal 3, the 14-gate expansion that will be a half-mile long being built along Russell Road. It won't be ready until 2011, but work is well under way.

And, south of Las Vegas, between Jean and Primm, environmental studies are under way for a new airport. It won't replace McCarran, but it will relieve some of the traffic the airport gets.

The problem is the new Ivanpah Valley airport won't be ready until around 2017, but McCarran is forecast to hit capacity by about 2014. There's no room to add runways at McCarran - and even if adding a runway were an option, it would take seven years to complete all the studies necessary to make it happen.

So it appears there will be a rough three or four years when McCarran will have all the traffic it can handle while construction occurs at Ivanpah.

The bad news coming out of the ACI-NA study is that the organization hopes to use its capacity report to encourage Congress to increase the ceiling on passenger facility charges, those added taxes you see whenever you buy an airline ticket. McCarran currently is locked into the highest level of the PFC, which is $4.50 per flight segment.

The PFC applies to the first two stops each direction of any trip, so if you fly round-trip to Reno, you'll pay $8.50 in PFCs, $4 for the trip to Reno and $4.50 for the return.

Count on McCarran applying for the maximum PFC if Congress agrees to raise the ceiling when it considers the Federal Aviation Administration reauthorization later this year.

Airlines aren't happy that they have to charge their customers the PFC, even though they benefit from the imposition of the tax.

Another report that got some attention last week was the quarterly American Customer Satisfaction Index report issued by the University of Michigan's Ross School of Business.

This quarter's edition measured customer satisfaction with the quality of service offered by airlines and hotels, two industries that are key to the Las Vegas economy.

The ACSI index has served as a gauge for future consumer spending and a leading indicator for the financial performance of companies and industries, according to the center's director, Claes Fornell.

Both the hotel and the airline industries showed year-over-year declines in customer satisfaction, according to the study.

The hotel sector showed a 5.3 percent decline in customer service satisfaction from 2006 to 2007, while airlines were down 3.1 percent for the same period. The same 5.3 percent decline was noted since the survey began in 1995, while satisfaction with airlines is down 12.5 percent since that year.

But again, there's a silver lining for Las Vegas. Among the hotel industry companies in the survey, local players Marriott International was up 5.3 percent in the index, Global Hyatt Corp. was up 2.7 percent, Starwood Hotels & Resorts Worldwide was up 1.3 percent and InterContinental Hotels Group was flat.

Hilton Hotels was off 2.6 percent, Ramada was down 1.4 percent and the broad category of "all others" had the biggest hit, down 7.9 percent.

On the airline side, the overall airline satisfaction rating was down 3.1 percent, with only two carriers in positive territory, including Las Vegas market leader Southwest Airlines. Southwest was up 2.7 percent over last year, Continental Airlines was up 3 percent and "all others" checked in at 1.4 percent.

Northwest Airlines was flat compared to last year.

Decliners included US Airways Group (down 1.6 percent), American Airlines (down 3.2 percent), Delta Air Lines (down 7.8 percent) and United Airlines (off 11.1 percent). United, the No. 3 carrier at McCarran, was the lowest-ranked company measured in the Michigan survey, which studied food service, health care and social assistance, cable and satellite TV, movies, wireless telephone service and energy utilities in this quarter's report.

Sence mention: Tom Tait, a former director of the Nevada Commission on Tourism, and former Gov. Bob Miller, who had key roles in getting the first nonstop air service from Asia by a foreign carrier, have parlayed their international knowledge to another part of the world and have partnered in a business to import rose nectar from Bulgaria with a product called Sence.

The product is used as a mixer with champagne and other beverages.

Sence got a nice plug last week following three major conventions at Chicago's McCormick Place, courtesy of the Chicago Tribune. In its "Off the Shelf" feature, the Tribune said, "We loved its elegant, out-of-the-ordinary sweet-tart flavor and heady aroma."

The mention was one of five coming out of the Food Marketing Institute, Fancy Food Show and All Things Organic trade shows.

Going West: One of the irritants to getting to Grand Canyon West, home of the new Grand Canyon Skywalk attraction, is the 14 miles of Diamond Bar Road guaranteed to rattle your brain when you drive it.

The Skywalk is a horseshoe-shaped, glass-floored perch that extends over the edge of the rim, giving people views straight down 4,000 feet to the canyon floor.

Last week, the Mohave County Board of Supervisors approved widening the road, dumping four inches of gravel on it and treating it with one of two sealants being tested. It's an interim step toward eventually paving the road.

Because of a legal dispute between the Hualapai Indian Tribe and a ranch owner who lives there, the road has never been paved, so the steps being taken to make the trip easier represent a major breakthrough. Work was supposed to begin last week.

The project is important to Southern Nevada because many tourists hoping to see the Skywalk will come to the nearest big city, Las Vegas, before or after the trip and spend the night.

Now, if only the tribe would do something about the ridiculous price of admission ($75 to get on the Skywalk because it's an add-on to other tours) and the equally ridiculous no- camera policy (you can't take them on the Skywalk because operators fear you'll drop them and damage the glass floor).

Richard N. Velotta covers tourism for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at (702) 259-4061 or by e-mail at velotta@lasvegassun.com.

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