With gasoline prices on the rise and the U.S. dollar declining internationally, Strip hotels are slashing prices to lure budget-minded customers.
Leading into the Fourth of July weekend, properties from the high-end Wynn Las Vegas to the financially precarious Tropicana 21/2 miles south are tinkering with room rates.
"We monitor it day-by-day," said Planet Hollywood Resort co-owner Robert Earl, whose property has increased rates. "There are some incredible prices that have come out in the market, and they have shocked us because some of them go through the Saturday."
Average daily room rates along the Strip are projected to be down 18 percent for the Fourth of July holiday weekend, according to a weekly report by gaming analysts at the financial firm JP Morgan. Average daily room rates are projected to drop 13 percent along the Strip for the week beginning June 29 and ending July 5, according to the report.
The report compares weeks in the year, not actual dates. So decreases are compared to the weekend of July 6-7, 2007, or the week of July 1-7.
Companies cut room rates in the hope that customers will not only fill the rooms, but spend the extra money in the property's restaurants, shows or on the casino floor.
"They need to cut prices to fill rooms," said Brian Gordon, an economic analyst with Applied Analysis.
Room rates in along the Strip have dropped on average for 13 consecutive weeks, according to JP Morgan.
They are also projected to drop on average of 13 percent for the week of July 6-12 and 18 percent July 13-19.
"One of the things properties are able to do is provide a more affordable room rate for their guests," said Bryan Allison, vice president of marketing for the Las Vegas vacation Web site Vegas.com. "We're in a great situation here."
However, Allison said that travelers might go to only one show instead of two or maybe skip dessert no matter how good of a deal they get on the room.
Many of the travelers the hotels are trying to lure back to the Strip might be customers who were lost when rooms hit the $300 to $400 per night range.
"A lot of the price-sensitive consumers have been staying away," said Charlyn Keating Chisholm, a travel writer covering the hotel and resort industry for About.com. "The companies look at how they can pull people in and that will be the first reaction -- drop the room rates and (hope they) spend money on things like the restaurant."
While the majority of Strip properties are cutting prices, rates at Planet Hollywood Resort are increasing 18 percent on the strength of newly remodeled rooms and the hotel's rebranding from the Aladdin.
Earl said managers decided to give away "one or two goodies" such as meal tickets or show tickets with the room price rather than cut the room rates.
However, he admits it is a challenge to market higher room prices in the slowing economy.
"There are all sorts of prices out there at the moment and in the summer, everyone is very price- conscious," Earl said.
The property also has a lot of advance bookings from international visitors because of the weak dollar.
"Particularly with the Brits, as a destination becomes available the first few years, it becomes a top destination," Earl said.
"The good news for us as a city is that international travelers are finding this is a bargain. So you're seeing international travelers coming in, staying a little longer, maybe they'll spend a little more money.
"Again, it's because of the strength of the euro and the pound."
Contact reporter Arnold M. Knightly at firstname.lastname@example.org or 702-477-3893.