Vegas gambles on visitor bargains
By Lisa Snedeker
Associated Press
LAS VEGAS — Resort operators are upping the bargain ante to attract tourists this summer as the city's visitor numbers lag.
Below-normal room rates are being offered to lure visitors to the Las Vegas Strip in response to the tourism slowdown that followed Sept. 11, industry experts said.
"There's a lot of deals out there," said Erika Brandvik, spokeswoman for the Las Vegas Convention and Visitors Authority.
Approximately 15,000 Strip workers were laid off after the attacks because of a dramatic drop in tourism. Tourism officials said that after New York City, Las Vegas' economy was hardest hit by the terrorist attacks.
"We're still in the recovery mode," Brandvik said.
Year-to-date occupancy rates for the city's 126,667 hotel rooms were down 3.2 percentage points to about 85 percent, according to visitors authority figures.
The empty hotel rooms can be linked, in part, to a nearly 7 percent decline year-over-year in passengers using McCarran International Airport through May. McCarran brings in about 46 percent of Las Vegas' tourists each year.
As temperatures rise into triple digits, occupancy rates and room rates traditionally dip, said Kevin Bagger, visitors authority senior researcher.
"And we are in an environment where the economy is still playing a factor in people's travel plans and how much money they are willing to spend," he said.
Some rooms on the Las Vegas Strip can be found as low as $19.50 per person, per night Sunday through Thursday. Weekend rates aren't as cheap, but they remain below last summer's rates, hotel executives said.
Bobby Baldwin, a top executive with MGM Mirage Inc., the largest resort operator on the Strip, said his company's 18,000 hotel rooms are filling up, but at rates averaging 5 percent to 10 percent below last summer.
"Business is not back to normal to the levels we had last year," he told attendees at this week's Las Vegas International Hotel and Restaurant Show. "We're going to have to continue to create value. They're going to go for value, not just price."
Many Strip resorts are offering perks worth more than the cost of a room if guests make their reservations online. Booking on the Web can earn guests air travel vouchers, complimentary meals, two-for-one show tickets and free spa passes, among others.
Advance room rates on the Strip for the week of July 13 are down 3 percent on weekdays to an average of $104, while weekend room rates declined nearly 8 percent to $147, a Wall Street industry survey showed.
But comparisons were mixed, according to Jason Ader, a gambling and leisure analyst for Bear Stearns Co. in New York.
Weekday rates at Park Place Entertainment resorts that include Caesars and Bally's are up 1.4 percent, while weekend rates increased nearly 25 percent compared with last year.
At MGM Mirage properties, such as Bellagio and MGM Grand, weekday rates declined 4.2 percent, and weekend rates fell nearly 14 percent. The average rate decreased nearly 11 percent during the week at Mandalay Resort Group properties, such as Mandalay Bay and Circus Circus, and fell 12 percent for weekends, Ader said.
"Despite week-to-week volatility in room rates, we believe the overall trend line continues to improve," Ader wrote to investors.
"After spending the last week in Las Vegas, we continue to believe the city's recovery is tracking ahead of expectations and expect some operators will start seeing ... (room revenue) gains throughout the summer months."
