The Las Vegas Convention and Visitors Authority board of directors today approved contracts for 10 international offices and an extension of its advertising agreement with R&R Partners as it said goodbye to five elected officials, including its chairman, Las Vegas Mayor Oscar Goodman.
The two-year deals for international representation run from July 1, 2012, to June 30, 2014, and will cost the authority $1.7 million in fiscal year 2013 and $1.8 million in 2014.
In addition to approving offices in Canada, Mexico, Japan, several western European nations, Australia, China, Brazil and Russia, the board authorized a request for proposals for representation in South Korea, India and France.
The authority is developing a strategy to increase the percentage of Las Vegas visitors from other countries from the current 18 percent to 30 percent within 10 years. Last year, 6.7 million international visitors came to Southern Nevada and spent an estimated $6.6 billion, which would support 58,000 jobs.
International visitors stay longer and spend more money than their domestic counterparts. The U.S. Commerce Department says international visitation to the United States is expected to grow by 49 percent through 2016 and LVCVA President and CEO Rossi Ralenkotter said Las Vegas needs to take the opportunity to get a good share of those visitors.
International offices produce advertising and marketing and conduct public relations, and each office has a different cost based on the scope of work performed and currency conversion rates. For Las Vegas’ three major markets, Canada will be handled by VoX International, Toronto, $257,500; Mexico and Central America by Ad Nova, Mexico City, $206,000; and the United Kingdom, Hills Balfour, London, $257,000.
In four primary markets, Japan will be overseen by Travel Link, Tokyo, $154,500; Germany, Spain, Italy, Scandinavia and the Benelux countries, Aviareps Tourism, Munich, $412,000; Australia, Gate 7, Sidney, $133,900; and Ireland, Aereps.ie, Dublin, $77,250.
In three emerging markets, China will be handled by BrandStory Inc., Shanghai, $144,200; Brazil and South America by Interamerican Travel, Sao Paulo, $61,800; and Russia and Eastern Europe, Aviareps AG, Moscow, on a per-project basis.
Cathy Tull, authority senior vice president of marketing, said requests for proposal will be made for representative offices in South Korea, India and France. Tull said South Korea has great potential because Korean Air has three nonstop round-trip flights a week between Seoul and Las Vegas. India is considered an emerging market and could be represented on a per-project basis, and XL Airways offers seasonal round-trip nonstop flights between Paris and Las Vegas, and France is Southern Nevada’s No. 6 international tourism market.
The board unanimously approved a three-year extension of its advertising and marketing communications agreement with R&R Partners that will be effective July 1, 2012, through June 30, 2015.
The three-year extension was part of a contract option on the authority’s existing deal with R&R. The board could have declined the option and issued a request for proposals to consider a competitive bid, but decided it didn’t want to disrupt continuity in its existing marketing strategy.
Under financial terms of the agreement that will remain the same, R&R receives a $400,000 monthly agency fee plus 12.5 percent of gross media commissions and 12.5 percent of gross outside services and production commissions. The LVCVA paid R&R $2 million, minus pass-through and overhead costs, last year.
Similar decisions have been controversial in the past because competing advertising and public relations companies say they should be given the opportunity to make presentations to show how they can better market the city.
Ralenkotter recommended keeping R&R because it “has produced extraordinary marketing results that have not only helped Las Vegas weather these difficult economic times, but actually surpass other tourism-based destinations.”
R&R created the successful “What happens here, stays here” campaign and the current “Life is short, summer is shorter” ads. The board got a look at three new summer television spots and a new “What happens here, stays here” ad.
The meeting apparently was the last for board members Goodman and Mesquite Mayor Susan Holecheck, Las Vegas Mayor Pro Tem Gary Reese, Henderson Mayor Pro Tem Steve Kirk and North Las Vegas Mayor Pro Tem William Robinson.
Holecheck was defeated in Mesquite’s primary election, and Goodman, Reese, Kirk and Robinson could not run for re-election because of term limits.
Because their successors have not been sworn in, it hasn’t been determined who will take their spots on the board. Las Vegas Mayor-elect Carolyn Goodman attended the meeting as a spectator.
Four private-sector board members also are up for reappointment in what Ralenkotter said was the largest turnover of board members he’s seen. The authority has been notified of two appointments by the Las Vegas Chamber of Commerce, its president and CEO Kristin McMillan and Caesars Entertainment executive Tom Jenkin.
It hasn’t been determined whether the Nevada Resort Association would reappoint MGM Resorts International executive Charles Bowling and Station Casinos’ Scott Nielson, but both are eligible.
The 14-member board also has representatives from the Boulder City Council and the Clark County Commission and two other private-sector appointees.
In other business, the board also voted to retain the Jones Vargas law firm as its lobbyist for the period between legislative sessions and for the 2013 legislative session. Under terms of the agreement, Jones Vargas would be paid $15,000 a month between sessions and $20,000 a month during the session.
The agreement includes an option to extend the deal through the 2013-14 interim period and the 2015 session at the same rate.