Monthly Archives: October 2016

Nevada’s Energy Future

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Debbie Donaldson (L) moderates a panel discussion on the future of green energy with Dr. Patricia “Pat” Spearman, Nat Hodgen, and Jessie Murray.

By Craig A. Ruark

Just before the opening of early voting, energy experts and elected officials told a pair of forums that ballot Question 3 presents a rare opportunity for both consumers and the industry to stake out winning positions for the future.

Question 3 would authorize the Nevada Legislature to “minimize regulations on the Energy Market and eliminate legal energy monopolies.” If approved by voters, it would have to be voted on again in 2018 before it could be implemented in 2023.

On October 19th, the Nevada Energy Star Partners Green Alliance held a panel discussion titled “Nevada’s Energy Future.” Debbie Donaldson, publisher of the Las Vegas Business Press, asked panelists Dr. Patricia “Pat” Spearman, Nevada Senator District 1; Nat Hodgen, executive director of the Southern Nevada Home Builders; and Jessie Murray, director of renewable energy projects for NV Energy, to describe the current energy environment and what we need to do to prepare for the future.

The three speakers, though diverse in their backgrounds, were part of the “New Energy Industry Task Force” that was initiated by Gov. Brian Sandoval and worked toward solutions to grid modernization, carbon emissions, distributed generation and storage, and clean energy sources.

Based on the Task Force’s research and discussions, several recommendations have been sent to the governor for the 2017 legislative session. In addition, a plan for grandfathering residential rooftop solar customers (those who were on-line or had applied to be part of the solar program as of Dec. 31, 2015), was approved by Governor Sandoval. It will take effect in December 2016 and expire November 30, 2036.

Senator Spearman said she is planning several bills for presentation during the 2017 legislative session.

“The technologies that we have right now and those that which are on the horizon are changing, literally, in a nanosecond,” she said. “We don’t have legislative policies in place to address the question about [energy] storage adequately. Because we don’t have policies in place that address an integrated energy system that customers want to go to.”  Spearman supports modifying the electrical grid to include distributive generation including geothermal and wind energy, and advocated for ‘out of the box’ thinking to prepare us for energy possibilities that are unthought of at this time.

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Rose McKinney-James, (L) moderates a panel discussion on ballot initiative Question 3 with Adam Kramer, John Hanger, Gary Aksamit, and Quentin Abramo, president of Faciliteq, representing small business.

On Oct. 20, Clean Energy Project, a non-profit organization, drew more than 100 people to the Switch Innevation Center in Las Vegas for a lunchtime session. The panel discussion was moderated by Rose McKinney-James, lobbyist and managing principal of Energy Works LLC, and included panel experts on distributive energy generation.

The topic title: “How will ballot initiative Question 3 ensure that clean energy development has a place in a well-regulated open market; and how will a restructured market ensure that all customers have the opportunity to access clean energy to power their homes and businesses?”

Adam Kramer, executive vice president of strategy for Switch, worked with environmental and consumer advocacy groups to develop the “Yes on Question 3” stance, answered: “The genesis of Question 3 is to deliver low-cost renewable energy to all Nevadans. As we begin talking about the restructuring and creation of a well-regulated open market, it is important that we do this in a way that is cognizant of the importance of renewables as well as the protection of all ratepayers here in Nevada.”

Switch along with MGM and Wynn Resorts have received approval from the Public Utilities Commission and to leave NV Energy’s grid. The Las Vegas Sands Corp. also filed an exit application that was approved by the PUC, but the company opted not to go forward.

John Hanger, an energy consultant and former secretary of the Pennsylvania Department of Environmental Protection, described this initiative from his perspective is “A huge opportunity for clean energy, but it is also an opportunity for customers.”

Hanger cautioned that there are two important pieces that must be in place both for clean energy and for consumers to make “the power of choice” option work:

  1. You need to have a real-time market monitor — ‘the cop on the beat’ of the retail and wholesale energy market to protect consumers. “The recent changes at FERC [Federal Energy Regulatory Commission] are important, but you also need a local cop,” said Hanger
  2. On the demand side of the market, the cleanest energy source is energy efficiency so if you empower consumers with smart meters and thermostats to control their demand, it will help their pocketbook and will also help the air quality and the environment.

Gary Aksamit, founder of Americans for Electricity Choice, offered a glimpse at what the market could look like after restructuring.

Using Texas as an example, Aksamit suggested that consumers check out www.TexasPowerToChoose.org, a clearinghouse database of all of the retail power providers in the state of Texas and competing for consumers. (Readers can put in the zip code 75094 to see how the site works.)

“Once into the website,” said Aksamit. “You are going to find between 150 and 250 offers for your business.”

The consumers in Texas have the opportunity to choose everything from 100 percent renewable energy to energy based on the lowest cost per kilowatt hour. Consumers are also able to lock in rates for whatever period they choose, with, of course, a penalty for early cancellation.

This type of open market program, according to Aksamit, allows the consumer to choose the type of power and the price point that fits their budget and lifestyle. The drawback to this program is with all the choices afforded to the consumers, not everyone is going to have the knowledge or want to take the time to wade through all of the options. In that case, many consumers may just accept what the local utility is offering and call it good.

The idea behind Question 3 is to offer choice to those consumers that want choice and to begin to prepare Nevada for a progressive energy future. That’s a planning process that Senator Spearman stated “must start now.”


LVCAC reports a positive outlook for Las Vegas

During a breakfast presentation to the Las Vegas chapter of the Hospitality Sales and Marketing Association International, Chris Meyer, vice president of global business sales for the Las Vegas Convention and Visitors Authority, had some encouraging words about the Las Vegas market.

Between 2000 and 2009, the number of rooms in Las Vegas increased from 125,000 to nearly 150,000. In 2016, Las Vegas lost about 1,300 rooms with the implosion of the Riviera, but saw construction activity at the Lucky Dragon, Resorts World and Alon.

“One of the things that we in Las Vegas do so well is maintain occupancy. Even during the dark days of the recession, the occupancy level never dropped below 80 percent,” Meyer said. Currently, the average occupancy hovers around 89 percent while the rest of the country is in the 60 to 70 percent range.

Contrary to the report on international activity by Roger Dow, president and CEO of the U.S. Travel Association during this meeting, “Our (Las Vegas) destination is exceeding all expectations,” Meyer said.

The latest figures for 2016 as of the end of July show that all numbers have increased over prior years:

■ Leisure visitation up 1.7 percent at 25.2 million

■ Convention attendance up 14.4 percent at 3.9 million

■ Occupancy up 1.7 percentage points at 89.8 percent

■ Revenue per available room (RevPAR) up 6.8 percent at $113

■ Gaming up 1.3 percent at $5.7 billion

■ Air traffic up 5.2 percent at 27.4 million

The two dominant numbers are the convention attendance, showing a double-digit increase year-over-year, and the RevPAR number, which is twice the national average.

One of the growth trends that will effect Las Vegas is not the number of hotel rooms but the increase in meeting space. Not including the expansion and renovation of the Las Vegas Convention Center, between now and 2019 resorts in Las Vegas have announced plans to build an additional 555,000 square feet of meeting and convention space.

In addition to promoting Las Vegas as a business and vacation destination, the research and statistics department at the LVCVA has more than 25 years of experience monitoring leisure and business trends according to age, gender, and ethnicity. Research shows that consumers are trading things for experiences. For instance, they are giving up ownership of an automobile in order to be able to afford to travel more.

The LVCVA is also engaging booking agents and travelers through social media. So far in 2016, the fans/followers have increased by 48 percent to 3 million; and videos about Las Vegas have increased by 175 percent to 79 million downloads. Part of the social media program involves reaching out internationally with 10 international social accounts reaching 310,000 users. The LVCVA has had 13.5 million engagements with international Facebook content and launched a WeChat account linking to the largest stand-alone messaging app in the world, serving 680 million active users, most of whom are in China.

The LVCVA has developed what it calls a “content forward trade show experience” that allows Las Vegas-based companies to access a web-based application that is constantly updated with the latest information about events, shows and sightseeing tours in and around Las Vegas. This application can be accessed through a computer or tablet to show customers at trade shows. It will debut Oct. 20.

Access to Las Vegas via air travel has significantly increased during the last 12 months with the addition of more and more direct flights both domestically and internationally.


U.S. travel industry stagnate but going in the right direction

About 80 marketing executives, many from the major Las Vegas casinos, met Sept. 29 to consider potential growth for and obstacles to the city’s ability to draw international tourism.

“The U.S. travel industry generates $2.1 trillion in economic output and supports 15 million jobs. Tourism is Southern Nevada’s No. 1 industry, supporting 368,900 jobs (41.4 percent of the workforce) and generating $51.8 billion in aggregate economic output.”

That was the opening statement of Roger Dow during a breakfast presentation to the Las Vegas chapter of the Hospitality Sales and Marketing Association International. Dow is the president and CEO of the U.S. Travel Association, an organization that represents all segments of travel in America.

“I keep saying that hospitality, lodging and the travel industry is the front door to economic development. No one ever decided to buy a second home or condo here (Las Vegas) until they first came here for a meeting, event or a vacation. Then they realize wow, pretty cool, lots to do, great restaurants, all these things,” Dow said.

In his talk, Dow outlined how international travel has improved for the hospitality industry and listed some hurdles to be overcome.

On the positive side was the improvement of visa wait times. In the past, the waiting period for a three-minute visa interview was 120 days. That has been shrunk to fewer than five days, and, as a result, the number of international visitors went from 53 million in 2009 to 77 million in 2015. That number is expected to climb to 100 million by 2021.

In addition to improving the visa wait times, the U.S. also expanded the number of countries enrolled in the Visa Waiver Program from 27 to 38. This program enables most citizens or nationals of participating countries to travel to the United States for tourism or business for stays of up to 90 days without first obtaining a visa when they meet all requirements.

One of the best examples is South Korea. When it was added to the Visa Waiver Program, visitation went up 46 percent in 18 months. An additional 400,000 South Koreans visited the U.S., making an average of 850,000 to 900,000 visitors each year.

One of the most important business and tourist countries in the world is China. In 2009, there were 500,000 Chinese visitors to the U.S. By 2015. that number was 2.2 million, and it is expected to grow to 5 or 6 million visitors each year. China is not one of the countries in the Visa Waiver Program, but the five-day visa processing program has helped to bring more tourists. In addition, a Memorandum of Understanding was signed with China to allow for 10-year business visas. This means that a Chinese businessman that comes to Las Vegas each year for the CES only needs to apply for a visa every 10 years, making it easier for China to do business in the U.S.

Recently, the Las Vegas Convention and Visitors Authority recognized how important the Chinese visitors will be to the lcoal economy and launched a campaign asking local businesses if they are “China ready.” The program talks about the need for improved signage, menus and guest relations personnel that speak Chinese languages.

Challenges that the travel industry faces include:

■ Infrastructure: This must grow to be able to move people throughout destinations. “The problem is the government keeps ‘kicking the can down the road,’ which stifles cities’ ability to grow and properly accommodate incoming travelers,” Dow said.

■ Ability to process people through airports: More travelers should utilize TSA precheck programs.

■ Customs and border protection: The U.S. needs to continue advancing technology including automated passport control and facial recognition.

■ Airplane capacity: In 2006, 11 airlines controlled 85 percent of air traffic in America. Now, there are four legacy carriers: Delta, American, United, and Southwest. “I want them to grow, but we can’t have four airlines controlling our destiny,” Dow said.

■ Improve load factors: Legacy carriers are projecting only 2 percent growth, yet international visitation is predicted to grow by 4 to 6 percent per year. The numbers don’t match, and carriers will stifle visitor growth.

■ Pandemics: The government and the media need to do a better job of identifying the exact areas affected by an epidemic and not make it sound like an entire state, region or country is affected.

The good news for the hotel industry is that, nationwide and in Las Vegas, the number of visitor days has not declined, but the amount of money spent during those stays has. Dow notes that “people are spending less on a hotel room. Instead of purchasing two Gucci bags, they are buying one. Instead of going to a 4-star restaurant, they are going 3-star.”

While nationwide the travel industry is flat, only growing at about 2 to 3 percent at this time, projections are for improved growth.

While business travel is very important to the economy, two-thirds of the travel and hospitality industry is for leisure activity.

One of the main reasons for the stagnated growth is the fact that Americans are not taking vacations. Americans have become what Dow calls “a nation of work martyrs.” In 2000, Americans took 23 days of vacation time. In 2015, that figure dropped to 16.2 days. Millennials, according to Dow, are the “worst offenders.” Because of the challenging work market, “they’re terrified of losing their jobs and want to look good.”

Furthermore, the USTA surveyed children, ages 6 and 7:

■ 75 percent say their parents never disconnect from the office when they come home.

■ 61 percent say the best time they spend with their parents is when they’re on vacation.

■ The surveyed children said, at least three days per week, their parents promised they would be home but were not.

To encourage Americans to take more leisure time, the travel and hospitality industries have teamed up to build a campaign called “Project Time Off,” producing a series of public service announcements touting the social and health benefits, physical and mental, of leisure activities.

MasterCard has committed $80 million to its television campaign where children ask their parents to take a vacation.


Life is Beautiful festival gets mixed reviews from downtown small businesses

 

 

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Las Vegas Container Park

 

When the “Life Is Beautiful” festival opened the gates at 2 p.m. Sept. 23 for its fourth annual three-day event, it was anticipated that nearly a year of planning would result in a huge economic boost to some of the downtown businesses.

The official numbers were not in as of press time. According to the Las Vegas Convention and Visitors Authority, however, the 2015 festival was a huge success for the community. Tallies show that there were 57,000 unique attendees for the event, and over the three-day period the total attendance amounted to 131,500. The direct economic result was a $21.5 million boost to the local economy.

“Over the past several years, music festivals have grown in popularity and have become a major draw among our numerous destination offerings,” said Cathy Tull, senior vice president of marketing for the Las Vegas Convention and Visitors Authority. “Life is Beautiful is one of many festivals that have decided to call Las Vegas home, and we look forward to welcoming all of the attendees to downtown Las Vegas.”

During the event, 18 city blocks are fenced off with 2.5 miles of perimeter fencing. “The event is very expensive to produce; we have to build the entire venue,” said Justin Weniger, a co-founder of the event. The venue includes three small stages and a very large main stage, a VIP lounge, culinary villages and art vendor booths.

Although the economic impact has been great over the past few years, the festival has seemed to fall out of favor with some downtown small business owners.

Marchello Tanasi, the owner of Vegas Flip Flop and Vegas Hot Rod and Street Wear stores in Downtown Container Park, did not have a positive experience during last year’s event. “Actually, I think that it catered mostly to the food. The retail side of it, and I can speak for a lot of people; we had no business.” This year, according to Tanasi, was a little better than last but nowhere near an average weekend.

Stella Pappas, the owner of Athena’s Jewelry Box, agreed with Tanasi. From her upstairs window, she could see the festival attendees dancing and partying in the street but did not see any traffic in her store.

Both Tanasi and Pappas, along with a few other shop owners, have asked their landlord, the Downtown Project, if they can close early or not open at all during the festival. Part of their contract with the Container Park required them to remain open during such events.

“People are here to party, they don’t want to be carrying shopping bags around,” commented another shop owner who wants to remain anonymous. “However, even though I did not have any business during the event, I do think that it brought awareness to the Container Park, and I hope that some of the people came back another time to see what we have.”

Kellie Kroplinski, the owner of Art Box, which carries handcrafted jewelry, clothing and art pieces from local artisans, had a better experience.

“I thought the festival was wonderful,” she said. She reported a 20 percent increase in sales and said she is encouraged by the fact that an increased number of locals who never had been to Container Park, visited her shop during the event.

Scott Wurth of San Miguel Collection in Container Park sells home-decorating items, dining, jewelry and other unusual artisan-crafted items. “Last year was pretty good for us during the festival. It was a little difficult because the festival-goers did not want to take things with them because they were busy, so we offered free shipping on everything for the entire event.”

When asked what sort of sales his store had, Wurth explained, “I am not sure that our store is exactly the Life Is Beautiful customer, so our sales stayed the same. We knew that we had to offer free shipping just to make some sales.”

Part of the problem was the fact that on a normal business day, Container Park opens its gates at 10 a.m. During the festival, the gates don’t open until 2 p.m., and only festival-goers who bought tickets are allowed to enter. To make matters worse, the shopping complex is virtually inaccessible for three days before the festival and three days after while crews barricade the streets to assemble and dismantle the stages and booths and other festival equipment.

During this year’s event, in addition to the 80 bands that performed, there were 44 food vendors from restaurants all around Las Vegas. The restaurants of Container Park, while open during the event, were not listed as part of the festival experience.

Co-founders of the event, Weniger and Ryan Doherty, met in 1999 while attending UNLV and have lived in downtown Las Vegas since graduation. In 2001, the pair started WENDO (a combination of their two last names) Media Cos., and in 2006 began publishing Vegas Seven magazine to spotlight the food, entertainment and art culture in Las Vegas.

Weniger and Doherty also opened two bars on East Fremont Street called Commonwealth and Park on Fremont. “Both are designed to be real-life neighborhood community bars,” Doherty said. Their frustrations in trying to entice customers to cross Las Vegas Boulevard, to a somewhat less-desirable neighborhood, turned into the idea behind Life Is Beautiful.

“The inspiration stemmed from the idea that if we combined art, music and culinary together that it would drive the community around the idea of revitalizing downtown, and at the same time build art, culture and community,” Weniger said.

The partners teamed up with Tony Hsieh, who owns Downtown Project, to form Life Is Beautiful LLC. Hsieh has for the past few years been acquiring property along East Fremont Street and several blocks to the north and south. This area is the site for the Life Is Beautiful festival. Downtown Project also owns Container Park at 7th and Fremont streets.

Tickets for the event started at around $125 for single-day general admission and $285 for all three days. VIP tickets start at $655 for the three days and as much as $15,000 for a package that included 10 VIP passes, a bucket of beer, two bottles of hard liquor, a dedicated concierge and cocktail server, private viewing areas and shaded relaxation areas with flushable restrooms among other perks.

Both Life Is Beautiful and the iHeart Radio Music Festival, which was held Sept. 24 and 25, were competing for music lovers. iHeart reported a sellout of 15,000-seats at T-Mobile Arena and a capacity crowd of 25,000 for Saturday’s daytime festival at Las Vegas Village.

Weniger and Doherty are hoping to increase attendance by 40 percent this year. “Early numbers show that occupancy was up in Downtown Las Vegas and spilling over to the Las Vegas Strip,” said Weniger.