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Benjamin Spillman

Little room at the inn: Vacancy flat as hotel occupancy high

15 October 2007

LAS VEGAS, Nevada -- It's times like these when another 33,000 hotel rooms would come in handy.

Las Vegas visitation was nearly flat in August compared to the same month in 2006.

But it wasn't because people quit going on vacation to drink, gamble and overeat.

The hotels just didn't have rooms beyond those already taken by the 3.4 million people who visited Las Vegas during the month, an increase of less than 1 percent from the previous August.

The occupancy rate for the month was more than 91 percent, the seventh consecutive month with a rate higher than 90 percent. Nationally, hotel occupancy rates are about 63 percent, with hotels in popular business or tourism districts reaching 75 percent, according to hospitality industry data.

"My perception is it is a very strong month," said Kevin Bagger, director of Internet marketing and research at the Las Vegas Convention and Visitors Authority, the group that tracks Las Vegas tourism figures.

For the year, occupancy is more than 91 percent and visitation is above 26.3 million, about 1 percent ahead of the pace from last year.

Historically high occupancy rates explain why the Strip is in the midst of a building boom that will result in another 33,000 hotel rooms and residential units by 2010 at a cost of about $29 billion.

"Those are the kind of numbers that are supporting the investment," Bagger said.

High occupancy didn't do much for the casino side of the local hospitality industry in August.

Gambling win, the amount of money customers lose to casinos, dropped everywhere in Southern Nevada except for downtown Las Vegas and Laughlin -- two markets that combined represent just about 6 percent of the Southern Nevada market.

Room rates, however, continued their climb.

In Las Vegas the average daily room rate in August was more than $126, up about 8 percent from the previous August.

Tourist visits in August were down nearly 10 percent. But convention visitors picked up the slack with a 19 percent increase.

Outside Las Vegas the numbers weren't so rosy. Visitation to Laughlin was less than 268,000, down almost 3 percent for the month. For the year, Laughlin has attracted 2.2 million visitors, down 8 percent compared to 2006.

In Mesquite, August visitation was more than 122,000, down 12 percent for the month. Visitation for the year is up less than 1 percent to a little more than 1 million.