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The economics of flight subsidization must be thoroughly considered before casinos risk losing money to both airlines and empty rooms.
The precipitous plunge in North Mississippi’s casino traffic has renewed calls for low-cost air service through the Gulfport-Biloxi airport as a proven boost for tourism.
Gambling revenue also is declining on the Coast, but the drop is much less and casino executives say tourists would find more attractions to enjoy than are available in the rural north — if only they had better options for getting here.
Despite the concentration of casinos and other tourist attractions, the Coast remains a drive-in market threatened by increased competition from neighboring states. A low-cost air carrier would allow the Coast to tap into markets the major airlines don’t serve from here, as Beau Rivage Resort & Casino already does with regular service between St. Petersburg, Fla., and Gulfport-Biloxi International Airport.
Bringing back a low-cost carrier, however, will require incentives for the airline, according to a 2013 analysis completed for the airport. Clay Williams, airport executive director, said he will bring business leaders together at a meeting Wednesday to gauge interest in a task force on retention of the airport’s current carriers, plus recruitment and incentives to bring in new service.
Community drives service
The airport analysis said visitors who fly into markets such as Las Vegas spend 50 percent more than those who drive.
“The flights bring in good, quality customers,” said attorney and consultant Michael Bruffey, who authored the 2014 report on gambling for the Mississippi Gaming and Hospitality Association. “The flights bring in customers who stay longer. The flights bring in people who have more money to spend, not just in the casinos but everywhere else. Not only do the casinos benefit, but so do the golf courses, restaurants and other tourism businesses. This is not just about casinos. This is about getting people here who like to engage in the tourism industry in general.”
Williams said the community is the major factor in air-service options. Residents would increase the odds of landing new air service if they flew from Gulfport-Biloxi rather than from New Orleans. He said 35 percent of the flying market is lost to the Big Easy, although fares are comparable and often lower in Gulfport-Biloxi when gas and parking costs are factored in.
“It’s a classic case of market demand,” Williams said. “For our size market, we’re very fortunate to have the air service we do.” Four major airlines serve the airport.
“For smaller markets,” Williams said, “the community drives the air service.”
Beau flies in customers
In 2009-10, the recession ended commercial flights with AirTran service subsidized by the casino industry for almost a decade. Williams said a subsidy, such as one that guarantees a low-cost airline a high percentage of filled seats, will be needed to bring back a low-cost carrier. Otherwise, profit margins are too thin.
“We can do it,” he said, “but it’s going to take a community effort.”
The Beau Rivage has teamed with Sun Country Airlines to fly in customers from St. Petersburg five days a week. Flights are running to Tunica right now, but will return to Gulfport in August, said Troy Dickbernd, the Beau’s regional director of national marketing. He said seats are available to all. On average, the nonstop flights are 92 percent full. The Beau also has private Sun Country charters for regular customers.
Last year, Dickbernd said, the Beau flew in 80,000 visitors. It has been in talks with other casinos and businesses about buying seats, for leisure and business travel, so the service could be expanded to seven days a week. Eventually, he said, the goal would be to expand into more markets. The service could start at three days a week, then add flights.
“That’s the long-term hope,” he said.
“Any time you’re talking about operating an airplane and paying for airplane fuel, it is a costly program. But that’s what we’re tasked with doing. For each seat we have occupied, we know that’s a customer who will help offset costs.
“We’ve got a great offering for customers when they come here. I think a lot of people don’t realize what the Mississippi Coast has to offer.”
(c)2014 The Sun Herald (Biloxi, Miss.). Distributed by MCT Information Services.