SEARCH NEWS:

 

Las Vegas Lowers Room Rates to Overcome Traveler Fears

LAS VEGAS, Nevada – Sept. 18, 2001 -- Price tags for Las Vegas hotel rooms have fallen as much as 60 percent in the supply-and-demand world of the casino industry in the aftermath of last week's terrorist attacks on New York and Washington D.C.

With very un-Vegas-like occupancy rates of 50 percent at some of the city's best-known megaresorts, industry executives are employing one of their best-known mantras `price to fill’ as they attempt to lure skittish travelers to town.

"All the hotels are in the same boat. We're all trying to lower rates to attract people," said Aladdin spokesman Fred Lewis.

For instance, the Aladdin's nightly room rates are $119 for a standard room on Friday and Saturday, down from a previously projected rate of $169.

The initial projection was collected earlier this month in a phone survey by casino industry watchdog Las Vegas Advisor and was meshed with the results of a Tuesday phone survey by the Review-Journal.

Nightly weekend rates for a standard room at the Rio have dropped from $159 to $89, according to the surveys. Weekend rates at Harrah's Las Vegas are down to $60 from $85.

Yet, at least one casino industry observer questions the wisdom of the reduced pricing.

"It's a bad time to be cutting prices because the people who are coming are going to be coming in any event, and the people who aren't, aren't going to be attracted by bargain prices," said Bill Eadington, a University of Nevada, Reno, professor who studies the casino industry.

'If your major concern is fear and safety, pricing changes aren't going to be terribly alluring."

Among the larger hotels reporting weekend rate cuts of at least 20 percent are:

Bally's, from $140 to $89.

Mandalay Bay, from $219 to $149.

The Mirage, from $139 to $99.

"Demand (for rooms) is quite low right now, and that's why rates are at very rare levels," said Alan Feldman, MGM Mirage spokesman.

Strip operators increasingly depend on revenue from hotel rooms, restaurants and entertainment to augment money won from gamblers.

The hotel-casinos generated $2.2 billion, or 25.2 percent of their 2000 revenue, from hotel rooms, according to Bear, Stearns & Co. That compared with $4.3 billion won from gamblers.

Mandalay Resort Group Senior Vice President John Marz said his company's megaresorts will have lower than normal occupancy rates this coming weekend, but added that he expected this weekend to be better than last, when many Strip properties were just half full.

He declined specific figures for his company's Strip properties, which include Mandalay Bay, Luxor, Excalibur, Monte Carlo, and Circus Circus. He said they are expecting an occupancy rate of more than 90 percent for the weekend of Sept. 28 and 29.

On Tuesday, Downtown hotels quoted rates much closer to the weekend rates reported before the terrorist attacks.

For example, the Lady Luck lowered its nightly weekend rate to $69 from $79. The Plaza kept its rate at $63.

< Gaming News