by Ray Smith, Exhibit City News
The Las Vegas Convention and Visitors Authority has approved a $4.6 million contract with The Boring Co. to manage and operate the 1.7-mile Vegas Loopunderground transportation system at Las Vegas Convention Center for the 12-month period ending June 30, 2024.
The cost covers the Tesla cars that have transported more than 1.1 million passengers at Las Vegas Convention Center in two years, free of charge, along with drivers’ pay, vehicle maintenance and cleaning, and security systems, says Ed Finger, chief financial officer of the LVCVA.
“We think the annual cost of maintenance and everything, it’s mandatory for a convention center of this size,” he tells ECN at the June 13 regular board meeting. “It’s necessary to help people move across our campus.”
The Vegas Loop saves a walk from the South Hall to the West Hall, which mighttake 25 to 45 minutes, depending on pace and crowds, with about a 2-minute ride, Finger estimates. The convention center campus covers 200 acres, and it’s a mile and a quarter between the farthest halls, a longer walk than anything even at Reid International Airport, Finger notes.
EXPANDING THE LOOP
The Boring Co., owned by billionaire entrepreneur Elon Musk, began construction of the Campus Wide People Mover, now called the Vegas Loop, in 2019, and completed the project under budget at $47 million. The initial management agreement was signed in 2021, with an optional five-year extension. The board approved a one-year extension in 2022 in the amount of $4.5 million.
With peak capacity of 4,500 passengers an hour, the Loop has carried more than 1 million people through a color-lit tunnel with stops at the South, Central and West halls. The average customer rating is 4.9 on a 5.0 scale.
The Boring Co. has completed construction on the first two phases of a connector tunnel from the Las Vegas Convention Center to Resorts World on the Strip andhas begun work on a separate tunnel to Encore. The company plans to expand the Vegas Loop with 18 stations covering 25 miles throughout the Strip corridor.
MONORAIL REVIVAL
The authority board also approved a $60 million agreement with Western Management Group to manage and operate the Las Vegas Monorail through June 30, 2026, and to change the bonus clause.
The current agreement gives Western Management a 15 percent bonus of net revenue, not to exceed $750,000 a year. The amended agreement will exclude 60 percent of advertising revenue from total net revenue.
LVCVA acquired Las Vegas Monorail Co., which had filed for Chapter 11bankruptcy, for $24.5 million in September 2020, and signed a contract with Western Management for $45 million in January 2021.
The monorail has carried 8.7 million riders since reopening in May 2021 and has received “solid” customer service scores and secret shopper reports, CFO Finger says. The system has run without any significant safety issues and has outperformed financial projections, earning revenue of $5.7 million last year, before interest, taxes, and amortization, he reports.
Other terms of the contract remain unchanged. LVCVA retains control of operational conditions used during the pandemic and the ramp-up period from reduced ridership to what are now normal operations.
MARKETING THE MONORAIL
The board voted to enter into a contract with Levy Online for marketing of the Las Vegas Monorail and website maintenance through June 30, 2024, with two optional one-year extensions. The first year pays $525,000, the second year $540,000, and third year $555,000, for a total of $1.62 million.
Levy provides data such as pay-per-click, conversion rate optimization, search engine optimization, website maintenance and other services related to monorailticket sales and awareness in a contract with Western Management Group.
Levy has refined the services to target potential monorail riders and has grown the percentage of riders purchasing tickets in advance, who tend to buy larger ticket types and ride more, according to LVCVA staff.
