Labor day weekend: Take our rooms, please

LAS VEGAS, Nevada -- Desperate times call for desperate measures. And when it comes to Las Vegas casino owners, desperation is spelled D-I-S-C-O-U-N-T.

Room rates in Sin City are down by double-digit percentages for the upcoming holiday weekend. It's a sign the rocky economy and high gasoline prices are forcing Las Vegas resorts to work harder to keep hotel rooms full and casino floors bustling.

At best, room rates are holding steady compared with last year during Labor Day weekend. But in many cases hoteliers are cutting rates as much as 50 percent.

"A lot of people still want to go to Las Vegas, but they don't want to pay as much as they did before," said Chris McGinnis, editor of Expedia Travel Trendwatch, an offshoot of the online vacation-booking Web site Expedia.com.

McGinnis said Las Vegas was the top summer destination on the site, but the average room rate was down 12 percent.

The Expedia numbers jibe with local indicators that suggest reduced room rates may help keep tourist volume close to what it was last year at this time, even if the visitors aren't spending as much.

Today through Tuesday, McCarran International Airport expects nearly 560,000 arrivals and departures. And the Las Vegas Convention and Visitors Authority says surveys of area resorts suggest there is a "potential to match" the 2007 Labor Day weekend volume of about 291,000 visitors.

Although Kris Tibbs, senior research analyst for the authority, said 4,000 new rooms since last fall means even with a match, the occupancy rate would be about 2.5 percent lower.

In a recent interview, Robert Ashcroft, vice president of planning for Las Vegas-based Allegiant Air, said hotels are basically absorbing customers' higher travel costs through discounts on room rates.

"In other words, the cost of higher fuel prices will, in the end, probably come out of the pockets of the Vegas casinos," Ashcroft said.

Allegiant is one of just a few domestic airlines to be turning a profit in recent quarters. The airline is dependent on leisure travelers from small towns taking vacations in Las Vegas, Florida and Arizona.

Much of Allegiant's revenue comes from selling rooms through partnerships with hotels. Lately the carrier has been able to negotiate lower room rates with the hotels and use the savings to keep travelers coming to Las Vegas, despite a sour economy.

"We're still in there pitching, and we believe in the long-term future of Las Vegas," Ashcroft said. "But yes, lower fuel prices would solve a lot of problems."

Michael Zaletel, chief executive officer of the hotel-booking Web site i4Vegas.com, said the 12 percent decline in room rates reported by Expedia may be misleading because discounting is much deeper at the individual property level.

That's because lots of people are spending the same amount of money for a room as before, but they are moving up to nicer hotels. Also, he suspects hotels may be giving gamblers big discounts and charging the difference to the casino or marketing departments, which would have the effect of keeping room rates high even if the customer isn't paying.

"We know that room rates are down significantly at properties that are saying they are not down," Zaletel said.

The discounts are dramatic at some of the most recognized hotels on the Strip.

At The Venetian, rooms that fetched $273 during Labor Day weekend 2007 are available for $228, a 17 percent discount. Rooms at the Riviera were $82 on the site last year and are available for $50 this weekend, a 39 percent decline.

"Last year at this time if you were looking for the weekend there wasn't much available and what was available was really expensive," he said. "It is creating a buyers' market."