Las Vegas Business Press
January 16, 2004
By Steven Mihailovich
As the city is set to surpass its highest historical visitor volumes and revenue totals in 2004, VEGAS.com is positioning itself and the city to continue the trend and reap the benefits for years to come.
Part of the Greenspun Media Group, VEGAS.com is a multimedia travel company. Defining its structure, however, is a bit more difficult. Like the language found in the Superman comic books, it is hard to judge whether it is a Web site or a call center, a travel booking agent or a television production studio.
The answer is that VEGAS.com is dedicated to selling and promoting the Las Vegas tourism product. Perhaps just as accurate, VEGAS.com is embodied in its president, Howard Lefkowitz, mimicking the company's own slogan, "It's who you know."
In two and a half years, he has driven the company's expansion to boundaries that are actually testing new technological frontiers in ways that have brought national media attention. Just as well, he has managed the company's business growth to phenomenal levels at the same time.
Having been involved in the development of the Internet from the beginning and one of the few to find it profitable, as well working with new technologies and formats in television, cable and even ticketing, Lefkowitz's experience can almost prove the old axiom about change and staying the same. If anything, he would only add that business success is in the dynamic tension between the two.
"The Internet changes everything but it doesn't change 100 years of human behavior," he says. "It doesn't replace all the things people have become accustomed to. The technology, like the Internet itself, is a tool. It's not a business. It's just a tool. Here, our business drives our technology. It's not our technology driving our business."
With both the original English site as well as four-month old Spanish site, VEGAS.com offers about 70,000 web pages of comprehensive information and deals on just about every offering in the city any tourist could want from simple airplane and room bookings to seats for sold-out shows and wild weddings.
The result has been the most viewed city and travel Web site in the world, with 20 million page views and 800,000 unique visitors a month. "When people hear 'VEGAS.com' and 'dot-com' in general, they think of four guys in a room with pizzas shoved under the door," says Lefkowitz. "The drunken sailor of investment banking and venture capital of the late 1990s was the [other] end of the ridiculous pendulum of the Internet. They don't realize there are sites that are making money and bring a lot of value. The Internet is not really a new medium per se. It's just a network. What you put over that network is the difference."
What you put is decided by what you have. By serving approximately 25 percent of all pages coming out of the city, VEGAS.com has reached a point that no property or operation can avoid providing the Web site updated information, even though many companies, particularly hotels, are creating Web sites and call centers to do more of the booking themselves and avoid the commission.
Lefkowitz compares the evolution of the relationship between his company and tourism product providers to that between Hollywood studios and the home video industry. Initially antagonistic, home video provide about 45 percent of the total revenue stream for all major studios.
"All of our tourism partners provide us information as quickly as possible because we are the largest purveyor of Web pages about Vegas," he says. "We're building this local infrastructure platform specifically for the community so it has the ability to grow on an overall basis without having to worry too much about the overall infrastructure. That's hard for the casinos [to do]. They're much larger. They have sunk infrastructure costs and already existing systems. It's very difficult to maneuver a large cruise ship as opposed to this cigarette boat...The bottom line is that a rising tide brings up all boats."
While all benefit from VEGAS.com's success, none can compete as the company continually invests in innovative technology that keeps reducing its costs while consistently driving interest from consumers.
For instance, the company uses telephony over the Internet from Nortel Network, giving the company call center more flexibility and speed, while allowing better data storage and interaction with the consumer. Last October, VEGAS.com entered into an agreement with Sennari Inc. to create a mobile VEGAS.com, allowing consumers to buy tickets for a sold-out show and enter seconds after the end of the transaction.
"It ain't easy, it ain't cheap, it doesn't happen overnight and sometimes it even works," said Lefkowitz. "After all, it is technology. You have to stay on top of the technology but that's kind of like taking out the laundry. If you don't have clean clothes, you can't go to work."
In addition, VEGAS.com has capitalized on Lefkowitz's broadcast and production experience, forming Studio Vegas about eight months ago. The division has produced the Vegas Minute, a 30-second spot being shown on local news channels across the nation. Used as a promotional tool primarily, the production unit also produced the New Year event entitled "America's Party on Fox" and produces "Vegas Live" with Clint Holmes and Sheena Easton. It is looking to go to syndication.
Still, the business is about business and the success has been astounding since Lefkowitz's arrival. In that time, the staff has grown from 28 to 120, with call center staff increasing from 3 to 70 over the same period. In October, VEGAS.com consolidated its operations in four different locations to a 25,000 square-foot space in Henderson.
Perhaps just as important, the ability to pay for it has matched if not overtaken that pace. In 2003, revenues grew by 475 percent from the previous and 15 times since 2001 to reach the "scores of millions" of dollars, with travel insiders saying it is closer to $80 million than $40 million.
For Lefkowitz, who participated in the founding and growth of companies such as Earthlink, EBay, Home Shopping Network and others, it is not knowledge of success but the ability to learn it which makes it all work.
"I've been fortunate in my career because I've been around a series of different media companies and what I've managed to do is try to continue to grow in my expertise because business people don't understand technology people and vice-versa," he says. "I know enough about technology and enough about business to walk the line. I like to call it the high priesthood of technology. Sometimes they say things because they can and they know the business guy isn't going to get it. Sometimes they do it intentionally and sometimes they do it unintentionally, but the business guy doesn't want to admit his ignorance and lack of understanding. So it's like a wall. Because I've been around these things for a number of years, I sort of can straddle the wall."
Name: Howard Lefkowitz
Family: Wife, Harriett; daughter, Laura
Born: Pittsburgh, Pennsylvania
Current home: Green Valley, Nevada
Web site: www.vegas.com
Hobbies: Avid scuba diver