Hotel rates on the Las Vegas Strip flattened during the second quarter and Truist Securities analyst Barry Jonas sees declines in July, plus tougher year-over-year comparisons ahead. He allowed that an event calendar featuring the Las Vegas Grand Prix, a slate of Las Vegas Raiders games, and the 2024 Super Bowl provided some mitigation.
Truist tracked online-booking rates for 28 Strip casinos across a 13-week period and found stability in June room rates, but a downturn in July. The study didn’t follow group bookings and was heavily weighted toward the weekend trade.
Despite its significant exposure to the Strip, MGM Resorts International displayed some “modest” accretion in room rates on a week-over-week basis, while Caesars Entertainment hotels, also preponderant on the Strip, were flat in price. The greatest run-up in rates was found at Venetian and Palazzo. Compared to 2022, however, June rates for Caesars fell 12 percent, while MGM’s were up four percent. July rates appear to be five percent down for both companies midweek and six percent lower on weekends.
Part of the difficulty was attributed to second-quarter “pent-up demand” last year following the Omicron outbreak, which dampened first-quarter 2022 travel. April of this year was also a soft period for hotel rates.
Jonas cited independent research that showed average daily rates in April were nine percent lower, contrary to the Las Vegas Convention & Visitors Authority’s minus-three-percent figure. Occupancy slipped three percent that month (the LVCVA reported it as flat), per Jonas’ figures, and May recouped, with rates and occupancies surging six percent. However, MGM, Caesars, and Wynn Resorts didn’t participate, as Jonas readily admitted, in the hotel figures Truist cited.
