Watching how Vegas copes with higher gas prices

Las Vegas has long been a leader in attracting liesure  tourists as well as convention-goers, so its latest efforts in the wake of higher gas prices will be watched and widely emulated by others, travel analysts say.

Moody Investors Service said in a report that Vegas’s tourist economy is on the road to recovery but cautioned that higher gas prices could reduce visitors spending there, particularly from its major drive-in market: California.

"With crude oil currently trading at its highest level since 2008 and high gasoline prices, consumers could pull back on discretionary spending and travel to Las Vegas," the report said.

But prices that have shot up 90 cents a gallon since mid-December in California haven’t affected travel habits, said Kevin Bagger, senior director of marketing for the Las Vegas Convention and Visitors Authority.

The gas situation has been noted by the US Travel Association, citing their recent study that found more than half of those traveling vacationing by car this summer say gas prices would impact their summer leisure travel plans.

The same study found that almost half (44 percent) of vacationers traveling by car said that an increase in gas prices would cause them to take fewer trips this summer. Almost one-fifth (19 percent) of business travelers using a car would take fewer trips.

 "It seems that consumers may be somewhat desensitized to the higher prices because they’ve seen them before, and changing their behavior may not be specific to a vacation," Bagger said.

Local resorts haven’t seen a pullback in travel, but marketing experts are gearing for that possibility.

Some properties are planning special events to continue to bring in tourists. The Silverton, for example, is planning a "Fuel Frenzy" promotion in July.  Aimed at local residents, it lets customers win free slot play and gasoline cards. Peterson added that Bagger said in 2008, some properties offered gas cards to guests.

Caesars Entertainment in the past offered customers the chance to trade points from their Total Rewards loyalty club for gas purchases and may be implemented again, according to a spokesman.

Like many of their resort counterparts, Caesars is seeing higher occupancy rates and average daily room rates thanks to increased international travel and improvements in convention and business bookings, according to Vegas.Inc.

The area’s convention arm, LVCVA expects to continue to deliver a message emphasizing the overall appeal of Las Vegas and its value proposition rather than focusing on gas prices.

Some marketers have noted that even with a 50-cent spike in pump prices, the cost of a round trip by car from Southern California is only going to be about $15 more — probably not enough to deter a traveler from making the trip.

But gas promotions can’t be improved for visitors arriving by airplanes.

Southwest Airlines, the busiest commercial air carrier at McCarran International, says it does not expect to be profitable in the first quarter of the year because of higher fuel costs. The airline announced a fare sale to drum up business.

By David Wilkening