All bets are offshore

Atlantic City airport rolls dice on ability to attract Europeans

November 22. 2010 3:00AM - Last modified: March 02. 2011 2:58PM

By Evelyn Lee

The South Jersey Transportation Authority is preparing for takeoff on the construction of a terminal expansion that would pave the way for direct international flights to come to the Atlantic City International Airport.


Bart_Mueller_CM_24_res
Mueller [Christina Mazza/NJBIZ photo]
Citing favorable currency exchange rates and a lack of capacity at other area airports, the authority said it’s an opportune time to pursue foreign travelers, though the city must present itself as an international destination for such an expansion to be viable.

The $25 million project — which involves expanding the airport’s 10,000-square-foot terminal to include a 75,000-square-foot federal inspection station facility — is moving forward following a court decision late last month to reject a legal challenge from an unsuccessful bidder. A groundbreaking is expected next month, and the authority, which owns and operates the airport, aims to fast-track the project’s estimated 18-month construction time frame, said its executive director, Bart Mueller.

The expansion will provide three additional gates and allow international travelers to be cleared for customs at the airport, rather than seeking clearance at another airport prior to arriving in Atlantic City, he said.
The airport has international designation, but with the exception of chartered flights, “we don’t get international travelers,” said state Sen. James Whelan (D-Northfield), Atlantic City mayor from 1990 to 2001. “This would create the infrastructure so we can handle scheduled service from Europe.” That’s significant, because “if you’re going to try to get consistent international travel, you have to make it as convenient as you can.”

In Atlantic City’s tourism-driven economy, “one of the objectives is to get people to stay longer,” said Richard Perniciaro, director of the Center for Regional Business and Research at Atlantic Cape Community College, in the Mays Landing section of Hamilton. International travelers not only tend to book longer hotel stays, but also will spend more money overall than domestic tourists.

Numerous casino operators refused opportunities to comment for this report.
Typically, a tourist traveling to Atlantic City by plane will stay an average of three to four days, compared to an average of one and one-half days for a visitor who drives in, according to Jeffrey Vasser, president of the Atlantic City Convention and Visitors Authority. The agency tracked the length of hotel stays by mode of transportation to Atlantic City, rather than whether the visitor was a foreign or domestic traveler, he said.

“Right now, it’s cheap to come here,” Perniciaro said, “with the cost of the dollar in the toilet.”
In anticipation of the inspection station’s construction, the SJTA is in discussions with two airlines about providing direct international flights, targeting markets like the Caribbean, South America and Mexico. “There are going to be opportunities with existing carriers as well,” Mueller said; international service is currently available to and from Atlantic City via connecting flights on Spirit Airlines and AirTran Airways.

The airport’s regularly scheduled direct international flights ended in May, when Canadian carrier WestJet discontinued service between Atlantic City and Toronto after eight months. “This is where reporting a withdrawal of an airline tends to stain the demand of an airport,” said Mueller, who blamed the service’s failure on its winter launch, late-night flight times and lack of a daily schedule.

Competition may make it more challenging to attract foreign demand. Asian tourists can gamble in Macau or Malaysia — and reach Las Vegas more quickly than Atlantic City, Perniciaro said. European tourists, meanwhile, are closer to Atlantic City, but “you’d have to cultivate the market,” he said. While some European countries have casinos similar to those in the United States, “it’s not the kind of gambling that they are really accustomed to and spend their money on.”
Marketing to Europeans “requires a broader approach,” he said. “There’s got to be more” than just gambling offered.

Having Atlantic City be more family friendly — as Gov. Chris Christie has proposed — may attract foreign travelers, but the real hook for Europeans would be to make Atlantic City one stop on a larger travel itinerary that could include cities such as New York, Washington and Philadelphia, he said.

And getting international flights to come to the airport “is not that easy,” Perniciaro said. The federal Department of Transportation must approve all new scheduled flights to foreign countries, and some nations require reciprocity, with the same number of flights entering a country as there are leaving, a DOT spokesman said.

In such instances, “you have to find a U.S. airline that will work with you,” Perniciaro said. But while Atlantic City needs to demonstrate it can attract international tourists, “there’s never really been a coordinated marketing effort” to do so, he said.

The agency is at times constrained in its ability to reach out to airlines and foreign travelers, Mueller said: SJTA’s marketing dollars are “a very small percentage” of its overall budget, and as a public entity, it is subject to travel and budgetary restrictions, making it challenging to meet with airlines, he said. Instead, the authority, as part of a coalition with the casino industry, plans to invite carriers to tour Atlantic City and meet with local stakeholders, he said.

“Most people who look at Atlantic City come to the conclusion we don’t dedicate enough money to marketing compared to other destinations,” Whelan said. He recommended the airport coordinate with the Atlantic City Convention and Visitors Authority to ramp up their sales forces and market to international carriers.

“That’s far more likely to be a better application of dollars than trying to go out and do an ad campaign,” he said. Once service to a market is established, advertising could follow: “It wouldn’t make sense to do a promotion when we don’t have carrier service.”

E-mail to:  elee@njbiz.com


www.NJBIZ.com