In recent times, the Las Vegas Convention and Visitors Authority (LVCVA) fielded several national ad campaigns. Tourism

In recent times, the Las Vegas Convention and Visitors Authority (LVCVA) fielded several national ad campaigns. Tourism is Vegas’s biggest industry, and the LVCVA is charged with maintaining the city’s brand image and keeping visitors coming to one of the world’s most famous cities. Although the positioning of the Vegas brand has changed from time to time, the town will probably never entirely lose the “Sin City” label. That title was born when Las Vegas was young and anything-goes gambling town full of smoke-filled casinos, all-you-can-eat buffets, and no wait weddings on the Vegas Strip. But as the 1990s rolled around, many Las Vegas officials felt that the town needed to broaden its target audience. So they set out to appeal for families. Some of the biggest casinos on the Las Vegas Strip built roller coasters and other thrill rides, world class water parks, and family-friendly shows visible to everyone passing by on the street. Although this strategy seemed effective for a short-term, marketers came to realize that the family image just didn’t blend well with the classic vibes that were still alive and well in Vegas. As the LVCVA started to consider its options due to the terrorist attacks of September 11, 2001, dealt Las Vegas tourism one of its worst blows ever. Declining tourism led to 15,000 lost jobs. The LVCVA decided that it was time to unabashedly proclaim that Las Vegas was a destination for adults. That didn’t just mean a return to the classic vibes. The LVCVA plotted an image of Vegas as a luxury destination exuding with excess and indulgence. The theme parks were replaced by five-star resorts, high-rise condos, expansive shopping malls filled with the world’s top luxury brands, and restaurants bearing the names of world-renowned chefs. A new breed of expensive stage shows for adult audiences replaced family friendly entertainment. This change of strategy worked. Even as Las Vegas struggled through economic recovery in the post 9-11 world, visitors returned in record numbers. However, to Rossi Ralenkotter, CEO of the LVCVA, it soon became apparent that the town was much more than just an assortment of facilities and amenities. “We talked to old customers and new customers to determine the essence of the brand of Las Vegas,” he said. The LVCVA found that to the nearly 40 million who flocked to the city each year, Vegas is an emotional connection for them and why they come here is because of a total brand experience. Research showed that when people come to Las Vegas, they’re a little naughtier, a little less inhibited. They stay out longer, eat more, do some gambling, and spend more on shopping and dining. “We found that “the Las Vegas experience” centered on adult freedom,” says Ralenkotter. “People could stay up all night and do things they wouldn’t normally do in their own towns.” Based on these customer insights, the LVCVA created the new familiar catchphrase which “Only In Vegas: What happens here, stays here.” The phrase captured the essence of the Las Vegas experience which said that it’s okay to be a little naughty in Vegas. That simple phrase became the centerpiece of what is now deemed one of the most successful tourism campaigns in history. The campaign transformed Las Vegas’s image from the down-and-dirty “Sin City” to the enticing and luxurious “Only Vegas.” The $75 million ad campaign showed the naughty nature of people once they arrive in Las Vegas. In one ad, an outgoing young woman is shown introducing herself to various men, each time giving a different name. In a third ad, a handsome man hops into a limo, flirts with some beautiful girls, and emerges from the car at the airport for his trip home as a conservative business man. At the end of each ad was the simple reminder, “What happens here, stays here.” The LVCVA continued investing heavily in the bold and provocative campaign. All the while, Las Vegas experienced its biggest growth boom in history. Hotel occupancy rates hovered at an incredible 90%, visitors came in ever-increasing numbers, and there was seemingly no end to the construction of lavish new luxury properties. To top it off, Las Vegas was dubbed the number two hottest brand right behind Google by respected brand consultancy Landor Associates. It seemed that the LVCVA had found the magic formula and that Vegas had found its true identity. Then in 2008, Las Vegas suffered another one-two punch. First, the worst recession since the Great Depression had consumers scaling back on unnecessary expenses. Second, in the wake of government bailouts and a collapsing financial industry, company CEOs and executives everywhere came under inspection for lavish expenses. As a result of the new economic realities, both leisure travel and the convention industry are in hardship. As a result, 2008 and 2009 were some of the worst years ever for Las Vegas. For 2009, the total number of visitors dropped to 36.4 million, 7% less than the 2007 peak of 39.1 million. This translated into a 24% decrease in convention attendance, 22% drop in room occupancy, and a 10% decline in gambling revenues. Nevada’s unemployment rate climbed to one of the highest in the United States. The Las Vegas hospitality industry responded by chopping prices. Rooms on the Las Vegas Strip could be had as cheaply as $25 a night. Gourmet meals were touted for half price. The town was practically begging for visitors. After years of successfully pedaling Vegas naughtiness as the primary selling point, the LVCVA realized it had to make a shift. So in the midst of the economic destruction, with so much to offer and great deals to be had, it focused on the value and affordability of a Vegas vacation. A new ad campaign, “Vegas Bound,” urged hard-working adult to take a well-deserved break in Las Vegas to recharge their batteries before returning return home to brave the tough economy. “We had to think how we should address our customers during this financial crisis when they’re hesitant to make big financial commitments,” said Ralenkotter at the start of the campaign. “We’re appealing to Americans saying, ‘You’re working hard. It’s OK to take a break.’” The campaign didn’t eliminate glamour and luxury. Rather, it repackaged these traits in an “affordable” and “well-deserved” wrapper. But after so many years of hearing about Las Vegas as a guilt free adult playground, no matter what the ad campaign said, consumers had a hard time seeing Vegas as prudent. It took the LVCVA only five months to pull the plug on “Vegas Bound” concept. As 2010 unfolded, the number of visitors was up. The LVCVA projected a 3% growth in visitors for the year to 37.5 million. Cathy Tull, senior vice president of marketing department said “People want to travel, they want to escape, and Vegas works very well for that.” Just as the needle started to budge. In fact, its $8.5 billion City Center was said to be the largest privately funded construction project in U.S. history. A City Center was designed as a small city in and of itself with four luxury hotels, two residential condo towers, and a 500,000 square foot high end shopping and dining center. Adding 6,000 rooms and 12,000 jobs to the Las Vegas Strip has met with mixed reactions. Some risk that this game-changing property will put an exclamation point on Las Vegas’ image and provide additional vigor in a time of crisis. And although tourist visits are on the rise, even if Las Vegas makes its projections for 2010, it will still be down from its 2007 peak. Las Vegas has certainly had its share of ups and downs. Times may be brightening now. But the city will face many challenges in the months and years to come.
Question:What is Las Vegas selling? What are visitors really buying? Discuss these questions in terms of the core benefit, actual product, andaugmented product levels?


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