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Gaming Guru

Tim O'Reiley
 

Vegas room rates jacked for Electronics show

5 January 2011

LAS VEGAS, Nevada -- Stratosphere at $450 a night. Excalibur at $479. Hooters Hotel at $339.

Have some Strip hoteliers lost track of their decimal points?

In fact, those very unrecessionlike rates reflect a convention schedule that sees the huge International Consumer Electronics Show and the Adult Entertainment Expo both opening on Thursday, with many resorts sold out both then and Friday. Some 130,000 conventioneers are expected for the electronics show.

Even on Saturday, as both shows wind down, many room rates run higher than New Year's Day a week earlier.

Prices for those three hotels are tenfold or more higher than other days this month and might be considered unusually aggressive compared to their neighbors. Some industry experts, however, see that as a sign the visitor industry has started to show a renewed pulse after three years of mostly ugly numbers. Even then, the improvement often is uneven.

"The much anticipated Las Vegas recovery is clearly under way," wrote Hudson Securities analyst Robert LaFleur, in a weekly survey of room rates. "Properties catering to convention demand seem to have more pricing traction, while lower-end properties continue to struggle."

By his calculation, rates at Caesars Entertainment hotels this week ran 48 percent higher than a year ago, with 49 percent at MGM Resorts International, 67 percent at Wynn Resorts and double at Las Vegas Sands.

By contrast, stand-alone hotels were flat. Several on-line booking services showed substantial vacancies at locals casinos.

Treasure Island, which caters to small and mid-sized groups plus slivers of the giants, projects that conventions will be the only one of its four business segments to show rate and room sale growth this year.

"Overall, conventions are looking pretty good," said Don Voss, vice president of hotel sales and marketing. "But it's all relative. It's nothing like 2007, but much better than last year."

However, Michael Zaletel, CEO of the booking service i4vegas.com, ironically assigns much of the credit for the busy weekend to Apple Inc. CEO Steven Jobs. Although Apple does not unveil new products at the show, the success of its iPads and iPods has spurred interest in what its rivals will roll out in response.

"I don't think this (hotel bookings) reflect on Vegas so much as on all the hype about the hand-held devices," he said.

Some of the unusually high rates posted on several websites, even for a major convention, follow a practice of testing the outer limits of what people will pay at the last minute.

One person at the Riviera, for example, thought the $999 price displayed on Expedia and Orbitz, among others sites, was a mistake because the hotel's database shows Thursday and Friday sellouts.

Others had pulled back. Circus Circus, listed a week ago as $398 for Thursday, had been slashed to $219.

However, some hotels raised their rates significantly as the show drew nearer.

A check-in at Bellagio tonight was quoted as $329 in October and $559 this week, while the new Cosmopolitan jumped from $275 in mid-November to $440, according to Hudson Securities.

Some in the industry look forward to the chance to boost cash flow after a long stretch dominated by discounts, but others advise caution.

"Come on, let's pace ourselves here," Zaletel said. "To try to make it back all at once just makes us look bad.