How Las Vegas Hotel Bookings May Impact the Las Vegas Economy
In my recent post titled “How Hotels are Bringing Back the Battered Las Vegas Economy ”, we discussed the future of the hotel occupancy rates and the effect it has on the Las Vegas economy. These predictions will depend largely upon an increase in visitation and continued growth in the Las Vegas convention and visitors industry.
A Decline in Las Vegas Room Availability
Recently, the Las Vegas hotel industry has seen more of a decline in available rooms. With the recent closing of the Sahara on May 16, Las Vegas was left with 1,720 fewer rooms to occupy. Gaming analyst for Union Gaming, Andrew Zarnett reported, “While this may have come as an unexpected event for many, we are not surprised by this announcement.”
Zarnett went on to explain that outdated casinos are increasingly losing foot in a New World Las Vegas that offers hotels like CityCenter and the Cosmopolitan. He further reported a concern for surrounding properties–such as the Stratosphere–to be plagued by their proximity to casinos, such as the bankrupt Riviera, the closed down Sahara, and the permanently on-hold Fontainbleu.
Other properties that might be shut down temporarily include the Station Casinos-owned Wild Wild West on Tropicana Avenue, Greek Isles Casino on Convention Center Drive, and the Las Vegas Hilton on Paradise Road.
With More Closures, How Can the Economy Look Better?
Yet, Union Gaming still forecasts increased room rates and hotel occupancy to continue to rise. How could this be possible? Given that in 2007, Las Vegas increased occupancy levels substantially in an economy that was positioning itself for a nosedive, the average occupancy rate naturally lowered.
But the continued occupancy rate rise isn’t due to a lack of rooms open to visitors. The Las Vegas Convention and Visitors Authority (LVCVA) is reporting an increase in convention bookings and a higher demand for rooms.
Bill Lerner of Union Gaming feels that at least three hotel projects will continue to move forward, even though they have been continually stalled. The LVCVA is actively setting up office in international cities in order to position itself for an increase in international visitors and an easier way to process visas.
Along with the plans for $2.4 billion addition to McCarran Airport to add a 3rd terminal, the Las Vegas economy looks hopeful. During convention high seasons, the average room rate and occupancy rate should continue to flourish.