Thursday, August 28, 2003
Copyright © Las Vegas Review-Journal

Holiday rooms report uneven

Labor Day bookings growth lags other holidays

The verdict for business on the Strip over the Labor Day weekend is coming in fast, and it looks like a hung jury.

Advance bookings for Labor Day in Las Vegas are about 20 percent slower than those for either this year's Memorial Day or July Fourth weekend, said Susan Wilson, spokeswoman for LasVegas.com, an Internet partnership of Mandalay Resort Group and Park Place Entertainment Corp., although she noted last-minute bookings are still coming in.

Comparing recent holidays, Wilson said Memorial Day had the most total reservations, the Fourth of July weekend brought the highest average daily rate with the shortest booking window and Labor Day weekend is shaping up to be the best value on rates.

For the week ending Sept. 6, average three-week advance room rates on the Strip increased to $117, up only two-tenths of a percent from 2002 and down 13.5 percent from record rates in 2001, just before the terrorist attacks on New York City and Washington ,D.C., Deutsche Bank survey data show.

Strip operators report visitor volumes and room rates are up compared with last year. But the growth rate is well below the increases over Memorial Day and July Fourth holidays, while the prognosis for the fall is positive, but guarded.

Rates for rooms booked three weeks in advance or more for next week have softened substantially thanks to the Labor Day weekend, the start of the back-to-school season and a slowdown in convention activity for the week, Deutsche Bank analyst Marc Falcone said.

According to the Las Vegas Convention and Visitor's Authority, just 8,000 convention attendees are expected next week.

This was the 16th consecutive increase in weekly room rates, although it was not nearly as strong a period as over the last four months, Falcone said.

"Overall, we are not overly disappointed by the room rate trends in the market," Falcone said.

A similar survey by Fulcrum Global Partners, an independent Wall Street investment research firm, showed midweek rates are flat, while weekend rates are up 20 percent.

"The average weekend rate on the Strip bounced back from last week's 19 percent decline," Fulcrum gaming analyst Joe Greff said.

MGM Mirage fared best in Deutsche Bank's Labor Day survey with room rates up almost 9 percent, followed by Mandalay Resort Group's nearly 2 percent increase. Park Place Entertainment Corp.'s rates slipped more than 12 percent, but its results were skewed by a sharp decline in weekday rates at the Las Vegas Hilton (where rates were down more than 30 percent).

Independent Strip operators reported similar demand.

Aladdin spokeswoman Tyri Squyres said the hotel would be nearly full, as it was last year, but its average daily room rates are up because of improved market demand.

Similarly, room and occupancy rates at the Imperial Palace are both improved compared with last year.

"We're happy campers," spokeswoman Jackie Brett said.

And at the slightly-off-the-Strip Palms, Room Reservations Manager Kevin Glass said demand remains high over the Labor Day weekend, despite very strong performances in July and August.

Fulcrum's Joe Greff said: "Looking ahead, most operators believe that if the economy does not crater or the U.S. does not engage in further military conflict, strong summer trends can continue into the fall, particularly as the Strip enters into a stronger convention period."