As the ninth-largest commercial airline in the U.S., discount airline Allegiant might not be first in mind for ticket buyers, or for sports sponsorships.
But the company took many by surprise when it was announced that Allegiant would be the naming rights partner for the new $1.8 billion stadium being built in Las Vegas that will house the Oakland Raiders when the team relocates from Oakland ahead of the 2020 NFL season.
Even Allegiant executives admit it was an aggressive move for the Las Vegas-based company, but it one is excited to embrace.
Allegiant CEO Maury Gallagher said the company’s headquarters in Las Vegas provided the company a chance to level up and if the stadium were in a different major city, things might have been different. Instead, the company grabbed an opportunity presented to it.
“It has a cache in the moment of time, we had to step up and do it,” Gallagher said. “You don’t back the truck up and change the sign often. It was aggressive for us at this point, but the company is doing well and we’re growing into it.”
The deal is reportedly valued between $20 and $30 million a year for 30 years. Gallagher did not comment on the financial terms of the deal.
Gallagher said prior to CMO Scott DeAngelo joining the company, it was primarily “order takers” with 90% to 95% of business coming through internet searches. Now with DeAngelo, Gallagher said Allegiant is approaching marketing with a more sophisticated plan.
Allegiant has recognized the mounting sports community in Las Vegas and nabbed partnerships with the NHL’s Vegas Golden Knights and T-Mobile Arena. The sports teams are helping elevate Las Vegas from a national awareness standpoint and Allegiant wants to be in the discussion as well, DeAngelo said.
Las Vegas has lots of upward momentum in reputation as a city – one that already draws plenty of tourists annually, and DeAngelo said Allegiant doing its best to capitalize on the upward trend.
“It just keeps building to critical mass,” he said. “Each new major property builds it and the Golden Knights, now the Raiders, do the same thing. It just snowballs in a great way for tourism.”
The Las Vegas stadium deal will draw national, even international, attention to Allegiant, bolstering the company’s legitimacy, said Luke Mao, associative professor of sport administration at the University of New Mexico.
“This is a move to create brand awareness in a national market, which can later be utilized later to expand their product offerings,” Mao said. “Naming rights serves as a signal to the market that Allegiant is a legitimate and competent service provider.”
Beyond the Las Vegas partnerships, Allegiant has an extensive partnership with Minor League Baseball, as well as several teams in small- and mid-sized cities, like Major League Soccer’s FC Cincinnati.
Airlines have been traditionally a major player in the sport sponsorship industry, Mao said. But only two airlines others have their names on major sports venues: American Airlines and United Airlines, both of which have multiple deals in place. American also signed a foundational partnership deal for the Los Angeles Rams and Chargers new stadium in the days following Allegiant’s announcement.
“There are certain industries that particularly benefit from sponsorships [and] those industries are often low in product differentiation and share similar target markets with sports,” Mao said. “They primarily use sponsorship to differentiate their service, enhance brand awareness and brand image and access to their target market.”
For Allegiant, the sponsorship with MiLB helps hit small- and mid-sized markets not served extensively by other airlines. This month the company announced 24 new routes, bringing the total markets served to 120. There is a minor league team in 114 of those cities.
“The footprint almost perfectly overlaps and establishes us as the hometown airline,” DeAngelo said. “It’s a great way to be entrenched at a local level.”
DeAngelo said Allegiant will continue to foster relationships with teams in larger markets it serves, like Cincinnati, Indianapolis, Cleveland and Pittsburgh.
Mao believes the concentration on sports teams in small- and medium-sized markets helps reinforce the brand image with family-oriented leisure travel. With competitors like Southwest partnering with several MLB teams, Mao also sees the MiLB deal as one to be a competitive move.
All of the sponsorship deals also play into the larger idea of Allegiant being a holistic travel company, not just an airline. Gallagher said the goal is to be more than a $150 fare from a Midwestern city to Florida, but also generate a $5,000 resort check. The company broke ground on its first Sunseeker Resort earlier this year in Charlotte Harbor, Florida.
In Las Vegas, Allegiant executives see much the same in trying to attract people to Las Vegas, not just with airfare, but to spend money across the company’s leisure travel services and amenities. Even if a customer doesn’t fly into Las Vegas – as more than 45 million do every year – DeAngelo said tourists tend to stay in the few miles that make up the Strip, which is adjacent to Allegiant Stadium, so they’ll see the branding.
“As we think of different goals, being able to build a preference for the brand, sports is a great opportunity to go across the board,” DeAngelo said. “We can help sell it as part of a travel package.”
As the airline continues its growth, DeAngelo said there are no exact numbers or percentage of marketing budget allocated to sports. Rather, it’s about how it fits into an overall advertising and marketing budget in entertainment, which includes music festivals and events like Nashville’s Oktoberfest.
“There’s no directive to increase or decrease, but in a world where TV is increasingly streaming and doesn’t lend to traditional advertising, it becomes harder to reach our target audience,” DeAngelo said. “Really, it becomes a great substitute.”
When looking at the markets served by Allegiant, the company found two-thirds of its customer-base reported being avid NFL fans, which DeAngelo said equals out as twice the national average.
“What we learned was small towns and mid-sized cities have a higher proportion than large cities with teams do,” he said. “Only 7% have ever gone to a game, so this is a great way to take the core value proposition, affordable and accessible travel, to those that didn’t have it.”
Add in a survey of 75 million people suggesting Las Vegas was the top place they’d visit for an NFL game, and Allegiant executives believe the company can be a pipeline for fans.