People are returning to Las Vegas in force.
After two years of being cooped up or staying local, people are hitting the road and heading to their favorite holiday destinations around the country.
Of course, Las Vegas is one of the most popular vacation destinations and is seeing a large influx of tourists. The increase in visitation right now isn’t only about additional business travel during weekdays.
There are so many people visiting Las Vegas that it’s somewhat difficult to tell what day it is when walking around the Vegas Strip this spring. The typical split of visitors typically is convention and business travel during the week and tourists on vacation during the weekend.
We started seeing a slow uptick in Las Vegas visitation last year, but it started to really take off around February. Now it looks as if the pent-up demand for vacation is real and in overdrive.
Entire families are taking vacations in Las Vegas together. This is an experience that some parents previously might have done by themselves.
Looking out at the Vegas Strip, it can look like the 42.5 million who visited Las Vegas in 2019 are all returning at the same time.
This isn’t much of a surprise to casino operators, who saw forward-looking reservations early in the year. During quarter earnings calls in January, various casino corporation CEOs were forecasting monthly increases in hotel occupancy.
Trailing data shows a similar uptick, with average daily hotel room rates that are increasing faster than the number of visitors.
All of this, combined with new marketing efforts and entertainment returning to Las Vegas, is leading to higher hotel room rates and fewer complimentary rooms. The latter is a staple of what helps make Las Vegas such a desirable vacation destination.
While conventions are starting to return, they’re smaller and have less of an impact than usual. Next year, casino operators might see record hotel room rates.
Visitors were gone, but Vegas was not forgotten
In March 2020, most of the country, including Las Vegas casinos, closed to help slow the spread of what was commonly known as coronavirus. Las Vegas casinos reopened in June 2021 with new health and safety protocols.
While visitors were slow to return to casinos, the casino operators came up with new plans on how to keep the lights on. Executives created new business plans for all parts of the business that allowed the casinos to:
- Stay in business while visitation was slow.
- Create a model that will be (even more) profitable with streamlined operations when guests completely return.
The combination was helpful for both guests and operators in 2021. Guests had a place to enjoy their favorite forms of entertainment. Casino operators kept their jobs and business afloat.
Unfortunately, casinos will likely remain operating on an adjusted streamlined business plan as visitors return en masse. In theory, while visitation to Las Vegas casinos increases, the reduced expenses will stay reduced.
While visitation lags behind 2019, the last full year before COVID-19, hotel room rates are exceeding the rates from that same year. It doesn’t appear as though there will be any slowing down on prices for hotel rooms, show tickets and more.
Visitors are starting to return with little care in the world for how much anything costs. It’s understandable that the pent-up demand of not vacationing for two years is changing how people get away.
So-called revenge travel is real. Between visitors going to Las Vegas for a specific concert or other entertainment or just getting away from home, Las Vegas is becoming as busy as ever.
While this is great to see, supply and demand on top of high inflation are making Las Vegas a costly destination.
More reasons to visit Las Vegas
Las Vegas has been more than just a gambling destination for more than 20 years. Non-gaming revenue has been accounting for more than half of the revenue on the Vegas Strip since 1999.
There’s plenty of gambling in Las Vegas, but that’s available in states throughout the country. Visitors to Las Vegas are looking for more than another craps game or slot machine (GASP!).
There was a lack of entertainment in Las Vegas early last year. The options in Las Vegas increased as COVID-19 restrictions were lifted. Now, there’s almost too much happening in Las Vegas.
This month alone, the largest pop group in the world, BTS, played four sold-out shows at Allegiant Stadium. Tickets to see the group live never made it to the public, as fanclub members purchased all pre-sale tickets. There was so much demand that MGM Grand sold out its arena for watch parties.
In addition to touring and resident artists like Lady Gaga, Las Vegas is once again the entertainment capital of the world.
Business in Las Vegas is booming with the high demand for all of these events on top of the desire to take a vacation. It’s great to see, but higher prices come with higher demand.
Rising room rates and fewer comp rooms
Worlds are colliding this summer as there are more reasons to visit Las Vegas than in past years. In that time, casino operators have optimized how they run their businesses. Together, this could be a record-breaking year for casino operators.
Las Vegas hotel room prices typically increase and decrease as people are visiting. The new part of the hotel pricing mix is changing how casinos are using their players rewards programs.
Casino operators focusing on the customers that generate the most revenue will continue to separate the “have and have nots.” Those that have never worried about complimentary rooms and discounts probably won’t notice too many changes.
However, high rollers and big spenders are the minority of visitors to Las Vegas. The majority of visitors will probably see smaller discounts, higher prices and fewer complimentary rooms.
I found the slow period in Las Vegas over the past two years to be more rewarding than ever. While business was slow, the offers for some casinos were better than ever.
Now that guests are returning, my mid-roller budget doesn’t earn quite as much as it used to. I’ll miss the comp suites, food credits and freeplay. I knew they wouldn’t last forever on my budget and that’s OK.
The same thing happened during the Great Recession in 2008. I was able to explore casinos I could never afford for a couple of years before prices normalized.
Now that visitation is returning to normal or better, my casino rewards are closer to before COVID-19. I’m happy to have had the opportunity to enjoy casino rewards I’ve never been offered before.
The next casino challenge is to learn how to navigate the new world of casino rewards.
While complimentary hotel rooms may not be in the cards for some, there are still fair discounts available to casino rewards members who book directly from the property.
Keep an eye out for deals because they’ll always exist — even if they’re not as deeply discounted as before.