Vegas Hotel Room Rates Will Increase
With signs that hotel occupancies are going up, MGM Mirage executives said demand for the company's hotel rooms is high enough to warrant an increase in room rates, which have plummeted during the downturn, according to a report in the Las Vegas Sun.
Raising rates in the coming weeks will help profit margins and could lead to a minor business rebound in 2010, they said.
Whether that strategy works will depend on the reaction of recession-battered tourists such as Judy Del Vecchio, 51, an advertising employee who paid $631 for a five-night stay with her husband in a suite at the Monte Carlo last week.
"This recession has scared people - they have a whole different way of thinking," Del Vecchio said during a break between fountain shows in front of the Bellagio. "They'll come if they know they're getting a bargain.
"If they keep rooms low, people will come out here and get lost in all this and spend money they never thought they'd spend."
Gambling911.com has monitored hotel rates in recent months. Some of the three star and up Strip Hotels were offering rates as low as $39 per night. Even during the World Series of Poker main event, rates around $59 per night were easy to find as of just a few weeks ago. In past years, those visiting Vegas during the WSOP main event were often forced to rent entire homes or condos way off the Strip.
According to the Sun, room rates are still depressed, according to official figures from earnings reports and tourism officials. MGM Mirage's revenue per available room - an industry measure that accounts for rooms undergoing remodeling or otherwise out of service - was $102, or 34 percent lower in the first quarter than the year-earlier period. That number was down 30 percent in April from a year earlier.
Jagajeet Chiba, Gambling911.com
