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Gaming Guru

Tim O'Reiley

Vegas visitor count inches up one percent

12 January 2011

LAS VEGAS, Nevada -- The improvement in the visitor industry continued at a tepid pace in November.

The visitor count for Las Vegas grew by just 1 percent compared to the same month in 2009, the lowest rate of increase since April and less than half of the 2.6 percent for the first 11 months of last year, according to the monthly report by the Las Vegas Convention and Visitors Authority. The critical benchmark has risen for all but one month in 2010, but the strongest performance came during a five-month span beginning in May, when the growth rate averaged 3.3 percent.

At least part of the slowdown results from the easier comparison to the middle part of 2009, as the recession touched bottom. The industry began to experience a turnaround starting in September 2009, making year-to-year growth more difficult to achieve.

The latest count, said authority senior director of marketing Kevin Bagger, "continues the ongoing trend of gradual recovery."

By contrast, the visitor count in October went up 5.7 percent, the best performance in five years, helping to pull up many of the other industry measures with it.

Other key indicators in November presented something of a mixed bag. Citywide hotel room occupancy dropped by 1.3 percent, with hotels and motels both down about the same amount. Weekend bookings gained just 0.6 percent, more than offset by a weaker midweek performance.

The room supply swelled by 3,700 from 2009 and will show another uptick, starting with the December report, due to the opening of the 2,995-room Cosmopolitan of Las Vegas.

Even with the larger supply, room rates went up 2.3 percent in November to an average $94.73 a night.

The volatile monthly convention count and attendance both fell in November, at least in part because of different show schedules. However, attendance went down 0.8 percent for the year to date while the number of meetings fell 6.8 percent.

This does not bode well for Strip hoteliers because conventioneers spend more on average than tourists, according to authority numbers. In a research report last month, Hudson Securities analyst Robert LaFleur concluded that hotels with substantial convention portfolios had more success raising their room rates than properties relying heavily on leisure travelers.

However, the sellouts that accompanied the International Consumer Electronics Show last week, plus bookings for the upcoming months have led convention industry executives to expect a rebound after two anemic years.

The highway traffic counted at Primm climbed 5.5 percent in November, a critical number because Southern California remains Las Vegas' single largest market.

LaFleur's weekly room pricing report, extending into the first week of February, accented just how inconsistent the recovery remains. Rates for the Super Bowl, which will be played Feb. 6, "are up nicely" but were counterbalanced by cuts at Aria, Vdara and Bellagio, he reported. When adding in across-the-board discounting at The Cosmopolitan, he concluded, "demand might look a little softer in February and March than 2011's initial pricing strategies anticipated."