Shopping malls have become an integral part of the economic and social fabric of our communities. Although the weakened economy and the slowdown in tourism have affected their bottom lines, Nevada retailers are seeing a rebound for the first time in two years and are optimistic about the future.
According to the 2002 issue of Las Vegas Convention and Visitors Authority’s (LVCVA) Las Vegas Visitor Profile Study, in 2001, the average visitor to Las Vegas spent $106.75 on shopping per trip, but in 2002, he or she spent only $83.53. Most Nevada retailers agree they were not immediately affected after Sept. 11, 2001, but did take a financial loss into the next year (2002) and are now stopping at nothing to increase their malls’ traffic and sales.
Maureen Crampton, marketing director of the Forum Shops at Caesars, reports its sales are up 5 percent, and traffic is up 7 percent, from last year’s figures. Crampton stated 80 percent of the Forum Shop’s 18 million visitors annually are tourists, so she believes this increase is especially significant in light of the decline in tourism, and especially international tourism, after Sept. 11. “The LVCVA did a phenomenal job – kudos to them,” said Crampton. “They really saved the day, taking a proactive role instead of laying low.” Although Crampton admits her property did take a hit in 2002, she said it was, “not as tragic as we thought it would be. It has come back. We have seen a great bounce back.”
Scott Freshwater, general manager of the Fashion Show Mall on the Las Vegas Strip, stated, “We are very much on target, with our sales at about $1,000 a foot. We did see some impact on average [sales] due to the slowdown in tourism. We saw a more bargain-minded customer before the [hotel] room rates came back up. We are in a different situation right now [in comparison to most malls], because we are winding down the second phase [of expansion] and undergoing a complete transformation.”
Freshwater stated the Fashion Show sees over 10 million visitors annually, but that is only half the volume he expects to see when its $1 billion, four-year renovation and expansion project is complete in 2004. It will more than double the size of the center to over 1.9 million square feet. “Twenty million visitors annually is our goal,” said Freshwater. “We have a significant advantage, and are clearly one of the flagship properties. By 2004, we will be the only shopping center in the country that has eight department stores under one roof.”
The Fashion Show has a much larger local visitor base than ever before, due to the opening of the mall’s west expansion in November 2002, which added two new department stores – a new national prototype Bloomingdale’s Home and the first Nordstrom for Nevada. Now, 60 percent to 65 percent of Fashion Show’s sales are from tourists, and 30 percent to 35 percent are from locals. Since the opening of the expansion, Las Vegas residents, who once had to travel to Southern California, Phoenix, Seattle or even the East Coast to shop at their favorite stores, no longer have to leave the state or even the city.
Although Las Vegas shopping malls located off the Strip do not rely on tourists for the vast majority of their sales, Carrie Renfrow, senior marketing manger for The Boulevard Mall, believes a slowdown in tourism has a negative impact overall. “We do have a strong tourist base at The Boulevard,” stated Renfrow. “Anything that affects the financial health of the city will certainly resonate throughout the local retail industry. We have some programs in place to encourage out-of-town shoppers to visit The Boulevard, as well as a program called Gifts for Your Guests, which encourages locals to bring their out-of-town visitors to The Boulevard.”
Although The Boulevard “cannot provide specific numbers or trends regarding sales or traffic,” said Renfrow, “We can tell you we have seen a lot of traffic, particularly on the weekends, and many people with shopping bags.”
According to Cynthia Moore, marketing director for the Meadowood Mall in Reno, a downslide in tourism doesn’t affect the north end of the state as much as the south. “We’ve had a positive trend for several years,” said Moore. “We see 7 million tourists per year, and we see more drive traffic versus the air traffic in Southern Nevada. We are the only large mall in the region. We have over 100 stores, 65 of which are unique to the market, which gives us a tremendous advantage. Our sales are going up as people move in, and our tourist base is at 25 percent because we are a regional retail destination.”
Tony Vaio, general manager for the Meadowood Mall, added, “Lake Tahoe creates a strong draw for our area. Hot August Nights and a variety of other special events have helped us to keep a positive trend. Also, we’re seeing a steady trend of established businesses moving in, such as the Starbucks roasting plant, Amazon.com and Barnes and Noble, which are giving us resources and higher paying jobs.”
How much the average shopper is currently spending per visit at the malls in Nevada varies anywhere from $92 at the Meadowood Mall in Reno to $160 at the Forum Shops at Caesars in Las Vegas.
There is no telling what will be in store for the upcoming holiday shopping season. However, Nevada retailers are agreed it should be a good one. “It’s encouraging that everyone is getting back into the swing of things,” said Crampton of the Forum Shops. “The major war [in Iraq] is over – that’s a plus for the economy. Everyone is ready to get back into the holiday season. I predict that shoppers will be more personally indulgent this year – more of a celebration kind of feeling.”
Renfrow of The Boulevard agrees. “We are very optimistic about the upcoming holiday season,” she said. “We have fantastic retailers, and we are looking forward to their exciting winter inventories.”
Marketing and Expanding
The slow economy has definitely changed the way Nevada malls are marketing themselves. “Our marketing plans are flexible to adjust for the changing retail environment,” stated Renfrow. “We have many programs in place that make The Boulevard a preferred shopping destination for Las Vegas families. For example, during the Back-to-School season, we will host the Channel 3 Back to School Fair, a teen-oriented fashion event called The Scene, and a gift-with-purchase program to reward our shoppers for their patronage.”
Crampton stated, “The Forum Shops has made some adjustments to market itself more effectively. We have broken ground on Phase Three and are moving towards expansion with the addition of 50 new specialty shops, which will open in the fall of 2004.” Upon completion of the $139 million Forum Shops expansion, pedestrians will be able to enter the mall through a series of street-level doors and courtyards. The expansion will include a recreation of a series of Roman-era storefronts along the Las Vegas Strip.
Phase Two of its redevelopment plan (the east expansion), to debut in 2004, features a long steel structure called “The Cloud.” The Cloud hovers 128 feet above a 72,000-square foot plaza on the Las Vegas Strip, providing shade during the day and doubling as an image projection surface at night. Four LED screens situated just below The Cloud will be used to broadcast video, events happening inside the mall, sponsored advertising and synchronized live Las Vegas events. Also included in the east expansion will be: a new event facility that will accommodate up to 750 guests for private functions; new retail, dining and entertainment experiences; and an 11,288-square-foot food court overlooking the Las Vegas Strip.
Meadows Mall is kicking off a multi-million dollar renovation project with planned improvements including a new color scheme, tile flooring, three new escalators, food court upgrades, brighter indoor lighting, a new stone façade, exterior paint and enhanced landscaping.
Chelsea Property Group and Simon Property Group will raise the stakes in the outlet industry in late summer with the opening of their $80-million Las Vegas Premium Outlets on 40 acres of land in downtown Las Vegas. The new 435,000-square-foot, open-air center will feature 126 upscale stores.
The Las Vegas Valley’s next proposed regional mall, the Rouse Company’s Summerlin Centre near Charleston and Rampart, is expected to begin construction in mid-2004, with opening planned in late 2005 or early 2006. The mall is scheduled to have four to six department store anchors.
While many would believe that the recent economic downturn poses a threat to the retail industry at large, consumer statistics in Nevada seem to be rebounding, and ongoing major projects in retail construction paint a healthy, positive picture of the future.