August 16, 2017
The Nevada Commission on Tourism held a Commission meeting at 1:00 p.m., August 16, 2017 at 401 North Carson Street, Carson City, NV 89701 and by video to the Governor’s Conference Room at 555 E. Washington Avenue, Las Vegas, NV 89101.
Call to Order
Lt. Governor Hutchison, Chair, called the meeting to order at 1:03 p.m.
Lieutenant Governor Mark A. Hutchison, Chair
Cindy Carano, Vice Chair
Herb Santos, Jr.
Commissioners who are absent/excused:
Claudia Vecchio, Director
Sarah Bradley, DAG
Stephen Ascuaga, RASC
Marily Mora, RASC
John Packer, TNS
Roll Call and Determination of Quorum HUTCHISON: All right, great. We got everybody ready to go in Carson City?
VECCHIO: We're ready to go.
HUTCHISON: Great. Welcome, everyone. We're ready to go here in Las Vegas as well. I'll call the meeting of the Nevada Commission of Tourism to order. This is the time and place noticed for this meeting. I want to welcome everyone and ask Claudia Vecchio, our Executive Director, if she would call the roll and establish the determination of a quorum, please.
VECCHIO: This is Claudia Vecchio for the record. Lieutenant Governor Hutchison?
HUTCHISON: Yes, here.
VECCHIO: Morse is not able to attend today. Bob, you're not on the phone, are you? Okay, Commissioner Phil DeLone?
VECCHIO: Thank you. Cindy Carano?
CARANO: On the phone.
VECCHIO: Super, thank you. Commissioner Denice Miller?
MILLER: I am here in Las Vegas.
VECCHIO: Terrific. Don Newman? Is Don on the phone? No Don. Okay, we will mark him absent, excused. Commissioner Rossi Ralenkotter?
RALENKOTTER: I'm here and present.
VECCHIO: Thanks, Rossi. Herb Santos, Jr.?
VECCHIO: Thank you. Bob Cashell?
VECCHIO: Thank you. Mike Vaswani?
VASWANI: On the phone.
VECCHIO: Excellent, thank you, and Brian Krolicki?
VECCHIO: With a smile. Julia Arger?
VECCHIO: Thank you. Richard Arnold is not available today, and Bob Stoldal?
VECCHIO: Super, thank you. Lieutenant Governor, we have taken roll, and we have a quorum.
Public Comment HUTCHISON: Great. Thank you very much. We will move on, then, to Agenda Item B, which is Public Comment. Are any members of the public who wish to make comment before the Commission in Carson City? Please step forward.
VECCHIO: There is no one here.
HUTCHISON: Thank you. Any members of the public here in Las Vegas who wish to make public comment? None here, either. Thank you.
Introduction of New Commission Members
HUTCHISON: Let's move on, then, to Agenda Item C, Introduction of new Commission Members. I am very pleased to have two of my all-time favorite people on the planet join us on the Commission. We've got reinforcements being called in by the Governor to make sure that the Lieutenant Governor knows what the heck he's doing, because he brought in two former Lieutenant Governors, friends of mine and wonderful previous members of this Commission. Mayor Bob Cashell. We all know the former mayor of Reno and former Lieutenant Governor, one of the great assets and treasures of the state of Nevada and somebody who knows tourism very well. Bob, I want to welcome you and thank you for taking the time to return back to your roots, The Commission on Tourism and help us out here with your wisdom, insight, and experience. You got to push your button, Bob, to thank me for being so kind and gracious.
CASHELL: Thank you, sir.
HUTCHISON: Thank you, Mayor. And then my friend—
CASHELL: So, you had to go to Vegas to hide from the two of us. Is that what it was?
HUTCHISON: We're a statewide Commission! We want to make sure we've got everything covered throughout the state here. But we are a better Commission, Mayor, because you're on our Commission now, and thanks for taking the time and the effort to be here with us. So, welcome, my friend.
CASHELL: Thank you.
HUTCHISON: Next is my predecessor and the man from whom I learned so much, our former Lieutenant Governor Brian Krolicki, who for eight years was a wonderful public servant and Lieutenant Governor. Brian is somebody who I have said repeatedly, publicly is I think the essence of public service, and we're just proud to have him back. I remember the very first meeting that I learned anything about the Commission on Tourism was a meeting that you were chairing and I was attending. The rural grants were on the agenda, and I had no idea what you were doing. After this meeting, you'll probably think to yourself, he still has no idea what he's doing, but I'm wonderfully blessed to have you back on the Commission. Brian, thank you for taking the time and making the sacrifice to serve our Commission again.
KROLICKI: Mr. Chairman and my friend, thank you so much. It felt good walking into the building this morning. Cashell has got my ear over here if I misbehave or forget who has a gavel. It's so nice to see the folks in this building, the fellow Commissioners, and to serve with you, Mr. Chairman. Again, this is a great privilege and honor and a great way to exercise that DNA in me that never, you know, really wanted to retire. But it's a great pleasure and honor. Thank you, Mark.
HUTCHISON: Well, we don't want you to retire, Brian. We're so happy that we're putting your talents to good use here again. Thank you. Let me just again welcome both of the new Commissioners and commend them to our fellow Commissioners. I know you know many of our fellow Commissioners, and those you don't know, you'll get to know well, and you know the quality of the people serving on this Commission. Again, it's just an honor to serve with both of you gentlemen on this Commission.
Reno Air Service Corporation (RASC) HUTCHISON: Having said that, let's move, then, on to Item No. D on our Agenda, presentation by the Reno Air Service Corporation, an overview of the organization and the partnership's recent successes and then the future plans. Please come on up, introduce yourself, state your name for the record, and we're anxious to hear from you.
NEWMAN: Mr. Chairman, while we're waiting, this is Don Newman. I'm on the phone and very excited to welcome Bob Cashell and Brian Krolicki to our Commission.
HUTCHISON: Don, thank you. I know you served with both of these public servants before, and like all of us, are thrilled to have them back working on the Commission. Thank you for making that comment in joining with all of us in welcoming them.
VECCHIO: This is Claudia Vecchio for the record. I just wanted to preface the RASC presentation. At the last Commission Meeting, you all approved the $50,000 in sponsorship dollars. In keeping with wanting to ensure that you had a high level of comfort with where these dollars were going, we asked our partners at RASC to come in and showcase some of the programming they do and where they're going with the organization. It's been an exciting evolution, and I'm sure they'll talk about that a little bit. It is important for you to know that as we're looking at where we put our funding, that it's always done with a good strategic direction and working with tremendous partners like the ones at RASC. We feel very confident that these dollars are going to the best use for the State of Nevada. That's why they're here. I'll turn the time over to Stephen Ascuaga and Marily Mora now and appreciate them for being here today.
ASCUAGA: Thank you, Claudia, and thank you, Lieutenant Governor Hutchison. I know we're going all around the state here, and thank you to all the members of the Commission for your time. My name is Stephen Ascuaga. I'm with Peppermill Casinos and also Vice Chair of Regional Air Service Corporation. We appreciate your time on this matter and the support that you've given us through the years. I'm also joined here with Marily Mora, who is also a fellow Board Member on RASC and President and CEO of the Reno-Tahoe Airport Authority, and also Connie Liu with the Abbi Agency, who keeps us on track and handles our administrative efforts for the organization known as RASC.
To echo Claudia's comments, really, we're here to thank you, first off, for the support, the continued support from really year one and through the years. Not just financially, but also partnering on different cooperative efforts. We’ll also share with you some of the successes we've had under the RASC umbrella, and then give you just an idea of where we're going moving forward as this has evolved through the years. There won't be a quiz at the end, and I'll be very brief on the history of RASC. We started back in 2001, formed under an entity called the Regional Marketing Committee. There were 11 members that came together from the tourism and hospitality industry, and through the 16 years we've been together, we have spent just over $14 million in helping ensure quality air service by looking at different co-op programs to bring air service to the Reno-Tahoe region in Northern Nevada. The mission, even though the format has changed through the years, the mission really has stayed the same, and that's to grow and sustain business and leisure air service for the Reno-Tahoe region.
The mission stayed the same. It's the position the Reno, Sparks, Tahoe, and Northern Nevada area is one destination. It's the focus on identifying national and international target markets. It's to increase quality air service to and from the Reno-Tahoe International Airport, and it's also to target common tourism and business industry concerns for cooperative action.
Back in 2001 and over time, it's one of the first organizations of its kind. What the organization does is it brings together a large and engaged membership that contributes not only financial support, but in-kind marketing support. The group brings together the private and public sectors toward a common mission, and the diverse membership includes both leisure and business-focused members. It represents the entire catchment area. We had a very defining moment in 2015 when we became incorporated which allowed the RMC to basically evolve into a corporation so we could deal with the airlines one-on-one. The incorporation allows the organization to sign contracts directly with the airlines for cooperative marketing programs. What was really the impetus behind that was the opportunity with JetBlue entering into the New York market. That was a huge success and a launching point for the next chapter of RASC.
The original RASC membership back in 2001 was made up of 11 leisure-based businesses. Since 2001, the membership has grown to include two airports, six destination marketing organizations, eight hotel casinos, a ski resort, and three business-focused organizations. To be able to bring both the business community with leisure together at the table provided a very unique opportunity and advantage for this group.
The leadership also is diverse in its representation. I’m serving as Vice Chair. Andy Chapman from the Incline Village Convention and Visitors Authority is our Treasurer. Our Marketing Committee is co-chaired by Rebecca Venus at the airport as well as Carol Chaplin with the Lake Tahoe Visitors Authority.
During the past year, RASC has been focused really on two key missions, maintenance of the current air routes and marketing support of new. As I get into the new markets discussed in terms of supporting newly launched routes, we really look at three ways that we'd support them. The three factors that we look at, how large the market is and how much marketing it will take to make an impact, how many other partners are currently spending money in the market and how engaged is the airline with promotions of the market. Support could range anywhere from $100,000 to $250,000. The markets that we touched this past year were Orange County with Alaska Service, Oakland on Southwest, Long Beach with JetBlue adding that leg, Atlanta in Delta, and Dallas Love Field with Southwest.
I touched on the catchment area, but this slide puts a visual for all of us to see our primary catchment area, the darker shaded region, which is about 750,000 people. But when you expand out to our secondary, we more than double that, which I think really goes hand-in-hand with a lot of what TravelNevada is pushing into the rurals and getting out and really exploring our state. We're very thrilled with what RASC has been able to achieve in bringing all the partners together from varying interests to promote quality air service for the region. I'm going to take this time now to pass the mic over to Marily Mora, President and CEO of the Reno-Tahoe Airport Authority, and let her talk about some of the success at the Reno-Tahoe International Airport. Thank you.
MORA: I want to start with a thank you for your support of the Regional Air Service Corporation. The Nevada Commission on Tourism has been a member of this organization since its inception in 2001, but also, I think we've had a great partnership with TravelNevada, particularly, under the leadership of Claudia Vecchio. When we brought in Guadalajara service two-and-a-half years ago, it was the support we got from Claudia and her team that really helped us with that. A sales mission down in Mexico really helped us to promote that service. And fast forward to the other new airline that we got two years ago, JetBlue with service to JFK, Claudia and her team were very much at our side to help support that flight and that launch. Again, that's been really, I think, beneficial not only through the partnership of TravelNevada and the Regional Air Service Corporation, but everything that the organization does to support air service, not only for Northern Nevada, but the whole state. I want to mention for our members of the Commission in Las Vegas, all of the efforts of McCarran to bring in international service to McCarran really supports other airports within the state. I think the growth of international flights at McCarran is going to mean people are going to stay longer in the state. They're going to be visiting, flying over to Reno-Tahoe International. It's really, really great to see McCarran also grow its international business.
I'm just going to take a moment very quickly to talk about what the Regional Air Service Corporation has done to support our air service growth at Reno-Tahoe International. In the past two-and-a-half years, we've gotten three new airlines. We've gotten JetBlue. We've gotten Volaris, and most recently we got Frontier to come back to the airport. We've gotten 14 new flights, but at the end of the day, what we look at is the number of seats out of the airport, that is 1,800 new seats. And without our partner, the Regional Air Service Corporation being at our side, it would be difficult. It's one thing to get those flights, but what the Regional Air Service Corporation does is help us fill those seats going forward by marketing at the destinations that we want to bring visitors to our state from. They've put a tremendous amount of money and effort into helping us support new air service. Just to tell you, the 1,800 seats that we've got that come now into the airport, that's worth $1.2 million a year in economic benefit.
If we go back in time to 2014, this is what our route map looked like, 15 destinations and seven airlines. I'm going to fast forward to where we are today, this is the growth of 23 destinations, nine airlines. We have eight of the largest domestic carriers serving our region, and also, we've brought in service to Guadalajara, which was an effort we worked on for about 15 years along with trying to get JetBlue going to New York. We've gotten service to Atlanta. So, those are all key things that were really long-range efforts, but particularly, that flight to Guadalajara with a large Hispanic population, that's been very, very important to have those three flights a week.
Again, the route additions that we've had, Guadalajara, New York City, Boise, Orange County, Oakland, Long Beach, Atlanta, Dallas Love Field. All of those that I show the asterisk, airplane there, those are routes that the Regional Air Service Corporation has supported us. The new flights that we have for San Jose on Southwest, Chicago and United, and certainly Frontier coming back into the market this November, those will be most likely supported by the Regional Air Service Corporation going forward. There will be discussion of supporting those flights at their next meeting in September.
I think it's no secret that we lost a third of our traffic at Reno-Tahoe International. It tells you how important it has been to have the Regional Air Service Corporation help us regrow, bring back those flights and passengers into our market. We lost 36% of our seat capacity from 2008 to 2014. Since then, the airport has been able to grow that seat capacity in and out of our region. If you look at the forecast here, the numbers going forward are going in the right direction. It bodes well for bringing tourism into our state and into Northern Nevada.
Passenger growth is up this year alone, it's up 9.7%. It's on the right trajectory going forward, and the increase in capacity has resulted certainly in an increase in the passengers. We've had 30 months of year-over-year growth in terms of passenger traffic because of these additional seats, and again, all with the help of the Regional Air Service Corporation.
Again, when we look at the economic impact of the airport, that's $1.2 billion a year. Every time a Southwest Airlines 737 lands, it makes up half of our traffic. That's $100,000 into the local community. As I mentioned earlier, when you use that metric, the additional seats that have been brought into Reno-Tahoe International equate to a $1.2 million per day impact. So, huge impact of bringing additional seats in airline service.
I'm going to wrap this up fairly quickly. US Customs and Border Protection, when we brought in Volaris, we've had issues in terms of staffing to clear that flight. Most recently, I think our congressional delegation did a phenomenal job with the Cross-Border Trade Enhancement Act of 2016. It gave us a mechanism to pay for additional customs staffing going forward, and this is particularly oriented to small airports that don't deplane more than 100,000 passengers. We will be hiring an additional officer at Reno-Tahoe International to improve the processing time for the Guadalajara flight from 90 minutes to get it down to 60 minutes. Because of all of the changes and the additional jobs in our community, we have begun a Master Plan process. We have not done a Master Plan in 20 years. We are looking at what our facility needs are going forward. I think along with the air service, what we found is having a need for additional amenities at the airport. This winter we are going to be opening a common use passenger lounge branded as The Escape. This will be something that you pay extra for. McCarran has three of these lounges. This particularly will be another amenity that we can offer at the airport.
I just want to really quickly say how the Regional Air Service Corporation supports our mission at the airport. There is marketing support for new routes, and when we go to an airline and we can talk about the fact that we have an organization that is community-based, it really distinguishes us from the 400 other communities that are at their doors talking about the need for more air service. You always at the end of the day have to have the numbers to support the air service, but they want to know that the community is vested in that air service, and the Regional Air Service Corporation is able to provide that commitment. It is, again, the competitive advantage that we have over other airports. It helps to know that the airline knows going forward that you've put the air service in, that the community is going to be there by their side to make sure that that flight is successful. An example of this, when JetBlue put in their flight to Long Beach a year ago, there were only two passengers a day that traveled to Long Beach. They did a financial analysis of 20 routes, and we were at the bottom of the list to get that service. But what they found out is that not only can we support one flight, that market to Long Beach has grown in the year that they've had that flight. Now going forward, next year, they will be adding frequency to have a second flight a day. Again, it's the support of an organization that can provide the marketing support like the Regional Air Service Corporation that allows us to make sure that the service, once it comes in, is successful. I'm going to turn it back to Stephen to talk about the future initiatives.
ASCUAGA: Thank you, Marily. Kudos to Marily and her staff and what we've built in the region of bringing people into Reno-Tahoe International and being able to distribute them out to the area. As much as it's been great celebrating the different wins, we're also looking forward to this next year in RASC. Again, it's continually evolving and we’re looking for more opportunities. I'll be brief, and we'll wrap this up. We're looking at four main points, and that is to maintain and strengthen current service. We're continually working with our airline partners and seeing where we can be of assistance. Expansion and growth in current markets, so it's not always going to be the home run of a JetBlue to New York. It may be working with an Alaska out of the northwest and adding more seats and bringing more people into the market. The new target market. The new market discussion is always there, very similar to our JetBlue efforts with New York. It may be a DC or a Boston, and we're continually working on seeing what that next opportunity is. And then lastly is the international. As Marily brought up, Guadalajara really has been the tip of the iceberg for one of our international flights in looking forward and seeing how we expand down to South and Central America. We're looking forward to those opportunities. Secondly, this next year is focusing on increasing our membership, not just through tourism, but through the different business partners that we have in the region. Lastly we want to thank, again, Nevada Commission on Tourism for continued support. As Marily brought up, it was year one back in 2001 when we put this group together, and the Nevada Commission on Tourism was at the table then. And to be 16 years down the road, I think we've really evolved and become very savvy at stretching out our dollars that we've been provided, but we appreciate all the assistance you've given us through the years and look forward to 16 more. I'll close, but if there's any questions for either Marily or myself, I'd be glad to field them.
DELONE: Mr. Ascuaga, Ms. Mora, thanks so much for doing such a great job at RASC. It's obviously vital to the vibrancy of tourism in Northern Nevada. Is there anything you would like the Commission to consider? What is the current funding level that the NCOT provides?
ASCUAGA: Currently, it's $50,000 annually. Total, we're fluctuating. We've been as high as upwards of $1 million and as low as about $700,000, and as I said, we take pride in stretching that as much as we can. Not so much speaking dollar-wise, but in seeing what the Commission is doing on international travel, we're looking at opportunities of where we're going to piggyback in, and I think while I'm not looking for a specific ask, we're very appreciative of the $50,000 that we're given. Moving forward, RCVA has recently, as you know, come on board with additional funding, and I think as the opportunities are created and explored, we'll be having that dialogue as well with all our partners. Thank you, though. Next year, I'll practice my PowerPoint presentation skills a bit more, but otherwise, thank you for your time on this, appreciate it.
HUTCHISON: Mr. Ascuaga, thank you very much for coming in and briefing the Commission, and Ms. Mora, thank you very much as well. Are there any other Commissioners in Carson City who have questions at this point? Commissioner Santos, if I can have you direct traffic down there, since I can't see it very well, why don't we just stay in Carson City, and you can call on the Commissioners as they indicate that they'd like to have questions answered, and then we'll come back to Las Vegas.
SANTOS: We're good here, Governor.
HUTCHISON: Great. Let me just ask a couple quick questions. And I don't know, Ms. Mora, it's going to be for you or Mr. Ascuaga. Where are we with US Customs and Border Protection? You said it's gotten a lot better. I know that was almost at a crisis situation at one point where we had flights that wanted to come in. We just couldn't process the passengers. Are we at a point where that's all been resolved now and we're in a good place or we still have some challenges?
MORA: Well, Lieutenant Governor, and thank you, I should have acknowledged all your efforts on air service in the state as well. Right now, we're in a good place, because we got this new mechanism to fund a complete position for US Customs and Officer. That was through a federal change, the Border Protection Act of 2016. We put in an application. We are able to pay for one officer position, which brings up our complement to three officers and one port director. Previously, the mechanism only available to pay overtime, which is a reimbursable services agreement which I believe McCarran International has to pay overtime. This mechanism did not exist for smaller airports like Reno-Tahoe International to pay for a full officer position, which is about $175,000 a year. For right now, this really does help us to process our Guadalajara passengers in 60 minutes rather than 90 minutes. We're just going through the paperwork process, right now with US Customs and Border Protection, but we expect, hopefully, early next year to have an additional officer on board at Reno-Tahoe International.
HUTCHISON: Well, that's great news, because you know better than anybody that was a major, major problem that was addressed well, as you said by our congressional delegation who was extremely helpful there and your leadership in solving big challenges. We were hearing an awful lot from local business owners there. So, thank you for doing that. The other thing I was going to note. I remember when Governor Krolicki was still Lieutenant Governor and I was running for Lieutenant Governor. Everybody I spoke to in Reno, all the tourism-based business there in particular, were just so concerned about these new routes and about getting more people in. If you look at the two maps that you provided to us today, the map in November 2014 and the map today, it's just the difference between night and day. That took a tremendous amount of energy and leadership, and I know that was almost a crisis level at some point. And now we've seen the success with these new routes. So, congratulations on addressing what I know was a very, very big issue in Northern Nevada for the tourism-based economy and the businesses there. Thank you.
MORA: Well, it was the community and certainly the Regional Air Service Corporation that's gotten us back on track. So, thank you for that acknowledgement.
HUTCHISON: All right, any other questions?
STOLDAL: Yes, Mr. Chairman. Bob Stoldal, Las Vegas.
STOLDAL: That's wonderful news about Reno-Tahoe International Airport. My question is I thought I heard the word all of Nevada for the Regional Air Service Corporation. Is that strictly the northwest? My question, is there any work or any movement, anybody doing anything as far as Ely, Nevada, providing air service? Is there any effort in that area?
MORA: No. The corporation right now is focused on really the catchment area for Reno-Tahoe International Airport. I would say the only initiative outside of that would be certainly commercial service between Reno-Tahoe International and Elko, which has not come before the Regional Air Service Corporation. But I think, you know, we're always interested—I can't maybe speak on behalf of the organization, but I think we're open to really supporting more development of air service within the state.
STOLDAL: Great, thank you.
CARANO: Lieutenant Governor, this is Cindy Carano.
HUTCHISON: Yes, please proceed. This Ms. Vice Chair.
CARANO: Thank you. Thank you, Marily and Stephen, for your presentation from Northern Nevada Tourism. Obviously, we are thrilled at the headlines. It seems like every month that we get a new airline service come out. So, thank you so much, and I know that some of my coworkers have been very instrumental in bugging you all the time and maybe helping you along the way. But my question, maybe because of my ignorance of your organization, you said 1,800 new seats. Is that 1,800 new seats a day, week, month, year?
MORA: That's over the last two-and-a-half years.
CARANO: So, 1,800 seats—
MORA: It's 1,800 seats per day.
CARANO: Per day, wow, that's great.
CARANO: Now, okay, because I was thinking a week, but a day is amazing. That means more people into our region for not only tourism, but for business, and as you know, we are [inaudible] greatly. And I know that we worked to the bone for your Guadalajara border control. Tell me, do you have more international flights in the pipeline?
MORA: Well, I think what we're looking at, if we can improve the processing time for Volaris Airlines, which has the three flights a week to Guadalajara, we would see additional expansion by Volaris to other destinations in Mexico, but our most immediate work is really restoring service to Vancouver, and we're working with either WestJet or Air Canada on that. Those flights from Vancouver would be precleared in Canada. If you recall a couple years ago, we had Thomas Cook that was going to provide service to London Gatwick seasonally during the ski season, being the gateway to Lake Tahoe that was an important effort. The US Customs and Border Protection denied the landing rights for that flight based on the fact that there wasn't staffing. I think that going in the future, we can look at those opportunities again knowing that we have control to hire up to five officers under our new agreement with the US Customs and Border Protection. I think it gives us really a future in looking at other destinations, other seasonal service. It's really a great mechanism that from the get-go a couple of years ago, we just said we're willing to pay for the service. Just give us the mechanism to do it.
CARANO: That was the right answer. That's awesome. Thank you so much.
HUTCHISON: Thank you. Any other questions from any of the Commissioners?
SANTOS: Herb Santos for the record. For those of us that have bad ears, if you're on the phone, maybe talk a little bit slower, because I'm having a hard time understanding. It sounds like you guys answered the questions perfectly and understood what they were saying, but maybe if we speak up a little bit louder and talk a little bit slower for the people with bad ears like myself, just an ask.
HUTCHISON: All right, any other questions? Okay, Ms. Mora, thank you very much again.
MORA: Thank you for the opportunity today.
HUTCHISON: Mr. Ascuaga, thank you very much as well. That was very informative.