Las Vegas visitors paid the highest average daily room rate (ADR) in the city's history in September, a trend that will likely continue as the Strip enjoys heavy post-lockdown demand.
September had the highest ADR on record at $187.18, according to statistics from the Las Vegas Convention and Visitors Authority. The previous highest monthly rate was $176.97 in April this year, when the city hosted the NFL Draft. The third- and fourth-highest months were May 2022 ($175.76) and October 2021 ($173.68), respectively.
"Las Vegas has enjoyed a very positive trajectory for ADR for much of the year, and September was a continuation of that trend, supported by a gradually improving convention segment and particularly, several sporting and special events," said Kevin Bagger, vice president of the LVCVA Research Center.
Those events included the Life Is Beautiful music and arts festival, the iHeartRadio festival, the Canelo Alvarez-Gennady Golovkin boxing match on Sept. 17 and the Las Vegas Raiders NFL game against the Arizona Cardinals on Sept. 18. The traditionally busy Labor Day weekend also played a part.
"We're still enjoying some of the boosts from the pandemic," said Amanda Belarmino, assistant professor at the William F. Harrah College of Hospitality at the University of Nevada, Las Vegas. "Travel, in general, has recovered well within the last year. We're enjoying some of the pent-up demand from people that had vacations they postponed or just weren't able to take vacations during that time."
September and October traditionally have been very busy months for conventions and business travel before the pandemic, she said. "This indicates a return to that. It also indicates that we're not necessarily attracting the value customer during that time."
Barring other macroeconomic impacts like a recession, Belarmino said she expects the room rates will continue to increase. "Inflation is hitting everyone, and the casinos had to rehire a lot of people, and they had to pay more money to hire people. Hiring is costly; training is costly; their supplies cost more."
There are still values to be had, though, and savvy travelers can still find a time of week, a month or a property with a room rate with which they comfortable, she said.
"One of the things that makes Las Vegas such an attractive location is that there is a lot of seasonality," Belarmino said. "People are able to travel during times that are slower where they can get a good deal on a hotel room at any property. We also have a variety of different properties in terms of the amenities they offer and their price points that allow the value-conscious guests to still be able to have an affordable and exciting vacation to Las Vegas."
F1 room rates
Looking ahead to the new year, rates for the weekend of Nov. 16 to 18, 2023, figure to be supercharged as the city will host its first Formula 1 auto race. The initial list prices for rooms on that weekend are unprecedented.
According to a survey conducted Nov. 4 by KLAS-TV 8NewsNow, rooms at the Bellagio are going for $1,733 a night for F1 weekend -- and that doesn't even include taxes and resort fees. That's a 226% increase from the same time this year. Rooms at Bally's (transitioning to become Horseshoe) are listed at $799, a 399% increase from 2022, the station reported in a chart that it plans to update throughout the year. Resorts World is showing a 445% increase, from $220 this year to $1,199 next year.
The lowest price available for a Thursday-through-Sunday stay is $752 per night at the Linq Hotel + Experience, according to a report in the Las Vegas Review-Journal.
The eye-opening initial room rates don't necessarily surprise Belarmino, who said the hotels are just seeing what the typical international market for F1 will bear one year out. Holding back rooms for casino players and high-end clientele, properties are perhaps signaling to anyone not interested in F1 to come another time, she said.
"They don't necessarily need to sell as many rooms; they may discount as time goes on," Belarmino said. "If they don't see the demand, of course, they're going to take those room rates down. Revenue managers don't make up those room rates based on nothing. They definitely have some numbers and some history to indicate to them that that was the right thing to do."
With a lot more data from previous Super Bowl cities to consider, Las Vegas hotels will likely not have as steep a spike for room rates as Formula 1 when that mega-event comes to town for the first time in early 2024, Belarmino said.
"It's a very unusual kind of demand for Super Bowl. You'll have people that just want to come here to the Super Bowl, and those people will book early," she said. After that initial pricing and hold-backs for casino clientele, it will likely slow down, she said. "You'll have people that want to wait until they see what teams are going to be playing. So then there's going to be some more last-minute bookings at the end. … They will start out high, but I do not think they're going to be priced as high as Formula 1."