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Survey: Weekend Room Rates On Rise

LAS VEGAS, Nevada – Oct. 12, 2001 -- A classic good news, bad news scenario is crystalizing for Las Vegas casino operators and their employees.

Midweek hotel performance remains stagnant at the city's megaresorts while weekend hotel prices continue to rebound from the effects of the Sept. 11 terrorist attacks.

Las Vegas hotel room rates for this coming weekend have jumped more than 40 percent from the depressed prices charged for the weekends following the suicide hijackings, according to a Review-Journal phone survey of Strip and downtown hotel-casinos.

But midweek hotel occupancy rates remain stagnant in the 75-percent range, leaving tens of thousands of Las Vegas hotel rooms vacant and about 15,000 casino employees out of work.

Both weekend and midweek average daily room rates are well below typical October prices, experts said.

Despite the increase in room rates quoted for the coming weekend, UBS Warburg casino industry analyst Robin Farley said the outlook for Strip megaresorts is far from rosy.

"The casino executives have been emphasizing rebounding room occupancy rates, but the increases have come with a significant reduction in midweek and weekend room rates," Farley said. "You're attracting a value customer, and that customer doesn't eat in the high-end restaurant and doesn't attend the high-priced shows. Ancillary revenue will be down even though you've got more people in the rooms than were there a few weeks ago."

Sunday through Thursday hotel guests are a much different market than the big-spending Las Vegas weekend crowd. Midweek visitors include expense-account wielding convention-goers and bargain-hunting tourists capitalizing on low midweek room rates and package-tour prices.

The Las Vegas Convention and Visitors Authority estimated citywide midweek hotel occupancy at 72 percent last week.

The authority forecast the rate would improve to 78 percent this week, well below the average October midweek occupancy rate of 88 percent.

October is traditionally one of the city's strongest tourism months, ranking alongside March and April, said Kevin Bagger, LVCVA statistical analyst.

Park Place properties reported midweek room occupancy of 89 percent the week of the terrorist attacks, but many of those customers were guests unable to depart Las Vegas because of air travel disruptions.

Occupancy plunged to 52 percent three weeks ago before rebounding slightly to 56 percent the following week.

Until the midweek falloff is reversed, Park Place Entertainment doesn't expect to recall many of the estimated 1,500 workers it laid off, Chief Executive Officer Tom Gallagher said last week.

"Midweek performance is still slow," Gallagher said. "It's certainly our hope (to bring back the workers as soon as possible), but we have to match that desire with the fiscal realities. We haven't had the same level of cutbacks as some of our competitors, but the situation is really fluid. I can't predict it."

UBS Warburg's Farley said one prominent casino executive has been touting record call volume to his company's phone reservation lines.

"Another executive told me 'Yes, everybody's seeing record calls to the reservation lines,' " she said. " 'The calls are cancellations or people calling to get a better room rate.' "

Anthony Curtis, publisher of the Las Vegas Advisor, a casino-industry watchdog newsletter, said he's skeptical when gaming executives say occupancy is almost back to normal.

"These guys never like to admit just how bad things are," Curtis said. "They're trying to keep their brave faces on."

A Review-Journal phone survey of next week's midweek room rates shows prices well below the October midweek rates listed in the Advisor.

The Advisor's October rates were quoted before the terrorist attacks.

The Mirage's midweek rate next week is $79, down from a $182 price quoted in the Advisor. Mandalay Bay's rate is $109, down from $249; The Venetian's rate is $149, down from $239.

"Without a doubt, these numbers show there is still downward pressure on room rates," Curtis said. "They're still not the all-time, fire-sale rates, and they're still a notch above December rates. But they're good rates for the consumer."

Weekend rates, however, are on the rise.

Of the 11 hotels surveyed on the coming weekend's rates, eight reported higher prices than rates quoted on the weekend of Sept. 28-29.

The hotels' average weekend room rates this coming weekend were 40.4 percent higher than their Sept. 28-29 rates.

Despite the increase, three hotels did not raise their rates. They are:

- Aladdin, from $139 to $129.

- Bellagio, unchanged at $159.

- Lady Luck, unchanged at $59.

Increases of more than 100 percent were quoted by The Mirage, from $104 to $229 and Bally's, from $69 to $150.

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