Heidi Genoist

Vegas Players Should Get Behind Monorail
July 11, 2007

Las Vegas’ transportation problem reared its ugly head again Tuesday, when credit risk assessor Fitch Ratings downgraded the Las Vegas Monorail’s bond rating from CCC to CC. The rating “means that default of some kind appears probable,” according to Fitch’s public statement.

This is bad news for more than the Monorail. It’s bad news for the Las Vegas convention business.

Most of the tradeshow organizers and attendees I’ve spoken to since the Monorail opened have said it’s a godsend. Organizers have promoted it to alleviate long taxi lines and shuttle bus rides (not to mention the costs of both), and one show, Nightclub & Bar/Beverage Retailer/Beverage & Food Convention & Trade Show, even made it the official transportation provider.

Still, everybody wants more: stops on the south and west sides of the Strip, service to the airport, bigger discounts on group tickets. For the Monorail to operate efficiently, it needs all these things.

As reasons for the ratings downgrade, Fitch cited lagging Monorail rider numbers and ticket sale revenue. At its present performance level, and counting on internal liquidity, the company likely wouldn’t be able to meet debt service obligations past 2010.

Imagine Intl. CES 2011 with no Monorail. Now, imagine it with a Monorail that served the entire resort corridor.

Fitch acknowledged both that the Monorail had tried various strategies to increase ridership and that it was plagued by two problems: 1. the “continued lack of aggressive marketing partnerships with the casinos” and 2. “strong competition from buses on the Las Vegas Strip and taxis.”

If the current rate of visitor growth continues, I think there will be plenty of riders to go around for buses, taxis and the Monorail.

As for problem No. 1, casinos, particularly those with convention space, should take a more active role in the Monorail’s success if they don’t want to be seen by convention organizers as indifferent to the transportation difficulties attendees have here.

It was just a couple months ago that Nevada Gov. Jim Gibbons proposed taking some of the Las Vegas Convention & Visitors Authority’s budget and giving it to the Department of Transportation for projects in Clark County. The LVCVA board, filled with hotel-casino executives, was outraged.

Yet right under its nose is a system that helps alleviate pressure on the current transportation infrastructure, and nobody seems willing to pony up the dough necessary to promote it and get it working properly.

Fitch’s report conceded that “the Monorail retains some ability to increase ridership levels, if it is perceived that the Monorail provides a superior competitive means of transportation.”

Posted by Heidi Genoist on July 11, 2007 | Comments (0)