Las Vegas room rates shoot up during March Madness tournament

March Madness is driving Las Vegas room rates through the roof.

Some casino resorts in the valley are seeing room prices for this weekend hit numbers not seen in in months. The high price points hint that demand is picking up for Las Vegas vacations, especially now that COVID-19 case numbers are dropping.

“People want to get back to enjoying the normal things in life,” gaming consultant Josh Swissman of The Strategy Organization said. “For a lot of people, that’s coming out to Vegas, whether by plane or car, and enjoying the first couple rounds of the NCAA tournament.”

‘Best place’ for March Madness

The NCAA basketball tournament is one of the biggest annual events for Las Vegas casinos. Companies missed out on potential earnings last year when the tournament was canceled amid the onset of the COVID-19 pandemic, but this year should come back strong. The American Gaming Association estimates that more than 47 million Americans are expected to place bets on this year’s tournament, similar to 2019 numbers.

There are plenty of reasons sports fans are choosing to travel to Las Vegas to place their tournament bets. Pool season is starting to pick up, and the city has some of the most grandiose sportsbook offerings in the world, from the 30,000-square-foot sportsbook at the Westgate near the Strip to Circa’s stadium-style sportsbook in downtown Las Vegas.

“Vegas is always the best place to watch sports if you can’t be at the live sport,” said Nehme E. Abouzeid, president of consulting firm LaunchVegas.

The tournament starts in earnest Friday, just as Las Vegas is starting to see significant signs of recovery. Restaurants and casinos can now operate at 50 percent capacity. Vaccines are becoming widespread, with about 14 percent of adults in Nevada fully inoculated as of Monday. And COVID-19 cases, hospitalizations and deaths have slowed over the past few weeks.

“All of these things are helping make Las Vegas attractive again, and tourists are responding,” Swissman said. “Plus, there’s a lot of pent-up demand. People have been at home literally a year now.”

Rising prices

That high demand translates into higher prices. A stay at The Cosmopolitan of Las Vegas this Saturday starts at $650, according to prices listed on Hotels.com. Last week, a weekend stay started at $325. A stay at Red Rock Resort went from $188 to $399 in that same time span.

Spokespeople for Red Rock declined to comment, and spokespeople for the Cosmopolitan did not return a request for comment.

At Circa, rooms start at $399 this Saturday, up $100 compared with rooms last weekend, according to the company’s website. The tournament promises to bring plenty of business to the downtown property and its three-story sportsbook.

“We are reaching full occupancy across all properties,” said Angela Ciciriello, spokeswoman for sister properties Circa, the D Las Vegas and the Golden Gate.

Starting room rates at certain Caesars Entertainment Inc. properties also are seeing a boost this weekend. A stay at the Rio, which started at $64 last Saturday, starts at $139 this Saturday, according to prices listed on Hotels.com. Meanwhile, starting prices at the Flamingo went from $149 to $175.

“Las Vegas has always been a top destination for sports fans, and with the triumphant return of March Madness, hotel bookings have increased across the city,” a Caesars spokesperson said.

A spokeswoman for MGM Resorts International said spring break travel has also strengthened bookings.

“We’re optimistic that demand will keep growing in the coming weeks and months as the economy and our industry continue to recover,” company spokeswoman Callie Driehorst said.

Spokespeople for the three other largest gaming operators in Las Vegas — Boyd Gaming Corp., Las Vegas Sands Corp. and Wynn Resorts Ltd. — either declined to comment or did not return requests for comment.

Return to normal

Higher room rates may be bad news for budget-conscious travelers, but it could be a boon for Las Vegas resorts and the state.

According to the latest monthly Las Vegas Convention and Visitors Authority report, the city’s average daily room rate in January was down 41 percent year over year at $90.71.

Less spending by visitors means less funding for the state. Nevada collected just under $1.3 billion in tourism industry-specific taxes in fiscal year 2020, down 29 percent compared with the year before. This drop affects state and local services such as education, according to the Nevada Resort Association’s 2021 Nevada Gaming Fact Book.

But Abouzeid said the room rate spike from March Madness won’t last long.

“Vegas is always great the first few days of March Madness, then it kind of cuts back,” he said. “But that’s the nature of the business. More teams are in it at the start, so there’s more teams to watch, more teams to bet on. Then it slows down.”

Swissman agreed that the higher room rates will eventually dip, but he expects to see them slowly rise in the coming months.

“(What you’ll) see is a steady average increasing of room rates as you move into the future,” he said. “They will start to come off this bottom they’ve been hanging around for months and months.”

Gaming consultant Debi Nutton, a former Wynn Resorts Ltd. executive, believes that recovery will take time. While major events such as Memorial Day and Labor Day will cause rates to spike, she doesn’t expect the prices to fully bounce back and stabilize until Las Vegas is able to recover midweek business.

“I don’t think we’ll see great hotel rates on a consistent basis until we get conventions back,” she said.

The Review-Journal is owned by the family of Sheldon Adelson, the late CEO and chairman of Las Vegas Sands Corp.

Contact Bailey Schulz at bschulz@reviewjournal.com. Follow @bailey_schulz on Twitter.