Room rates climb in September even as hotel occupancy dips
Hotel occupancy rates maintained a moderate pace in September, but Las Vegas resort operators managed to push room rates to the highest level in the pandemic era, the Las Vegas Convention and Visitors Authority reported Wednesday.
Occupancy rates averaged 73 percent for the month with weekend occupancy at 89.1 percent, just below the norm, but midweek levels were at 66.1 percent, underscoring the absence of convention traffic.
Despite average occupancy rates, resort operators have pushed the average daily room rates up by double-digit percentages.
The convention authority reported an average room rate of $155.80, 11 percent higher than in August and 44.1 percent higher than in September 2020.
The Strip average daily room rate was $164.78 for the month, up 10.9 percent from August and 40.4 percent from more than a year ago. Downtown Las Vegas rooms were strong with a rate of $110.20, 28.7 percent more than August and 84 percent more than a year ago.
Festival boost
Higher demand for downtown rooms resulted from the Life Is Beautiful music and cultural festival in the middle of the month.
“With stronger weekends but declines midweek vs. August 2021, September visitation saw some stabilization at approximately 2.9 million visitors (down 2.1 percent month over month and down 15.5 percent from September 2019) after seeing sharper declines in August as the COVID delta variant surged,” Kevin Bagger, vice president of the LVCVA research center said in a report.
The LVCVA continues to report no convention attendance for the entire year so far, although some large events, including the World of Concrete trade show in June, have occurred.
The convention authority also reported 74.5 percent occupancy on Strip properties, down 0.2 percentage points from August, but up 28.1 points from September 2020. Downtown Las Vegas occupancy was reported at 61.9 percent, up 4.3 points from August and 17.6 points more than in September 2020.
Other tourism indicators continue to show moderate trends.
The amount of auto traffic on highways leading to Las Vegas was up 0.1 percent from August to 127,905 and up 0.8 percent from September 2020.
But the number of cars counted at the California-Nevada border on Interstate 15 near Primm was down 3.7 percent from August to 47,539. That’s also down 0.1 percent from September 2020.
The Nevada Department of Transportation, which provides the data, acknowledges that it doesn’t differentiate between tourists and local traffic.
McCarran International Airport has yet to release its September passenger numbers.
Room for improvement
While visitation was up slightly in Laughlin (2.7 percent compared with August), gaming revenue was down 9.2 percent to $37.3 million for the month. Laughlin was one of three markets monitored by the Nevada Gaming Control Board that showed a monthly decline with the two others in the forest-fire-ravaged Lake Tahoe area.
Joseph Greff, a gaming analyst with New York-based J.P. Morgan, said occupancy rates are somewhat skewed because more available rooms are in the market now than a year ago. With the openings of Circa, Virgin Hotels Las Vegas and Resorts World Las Vegas, room inventory has climbed 1 percent to 150,518.
“For the month, citywide occupancy was 73 percent, flattish sequentially, and down 15 points vs. September 2019,” Greff said in a Wednesday note to investors. “Weekend occupancy continues to outperform convention/group skewing midweek.”
September weekend occupancy was 89.1 percent versus weekday 66.1 percent, he added. “We note that weekend occupancy improved sequentially, coming in near the post-pandemic high at 89.1 percent (up 2 points month over month), while midweek occupancy took a slight step back in the month to 66.1 percent (down 1.7 points month over month),” Greff said in the note.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.