weather icon Mostly Cloudy

Some Las Vegas resorts cutting fees as visitation declines

Updated March 22, 2019 - 7:04 pm

Some Las Vegas resorts are scaling back their fees or offering “no-resort-fee” promotions during slow periods, despite a lack of data showing a relationship between hotel fees and visitation.

Others are hinting they will not raise fees this year after Las Vegas visitation reached a four-year low in 2018.

— In July, Wynn Las Vegas stopped charging parking fees for overnight guests and day visitors who spend at least $50 at the property, saying the fees were “counter to the personalized service we provide.”

— The Cosmopolitan of Las Vegas canceled parking fees for overnight guests at the start of this year “as an added value.”

SLS Las Vegas, Golden Nugget and Red Rock Resort have launched temporary marketing campaigns in recent months offering rooms without resort fees, taking advantage of the interest the topic receives on social media.

A resort fee is a mandatory fee that an overnight guest must pay for additional services provided by the property — such as Wi-Fi, pool and gym access — regardless of whether the guest actually uses them.

“We are always trying new offerings to see what resonates with clients and this is just another tool in our arsenal,” said SLS spokesman Christopher Abraham.

Red Rock chose the “no-resort-fee” promotion for March and April to distinguish its property from others offering spring break deals, spokeswoman Lori Nelson said.

Maintaining fees

MGM Resorts International and Caesars Entertainment Corp., the two largest Strip operators by number of properties, have said they are maintaining their current resort and parking fees after raising them a little over a year ago.

“We don’t have any plans on changing the structure we have in place,” Caesars CEO Mark Frissora told Wall Street analysts Feb. 21. “We are certainly sensitive to the fact that we can hurt our own profitability and revenue growth if we get exorbitant or do things that have no value to them.”

Caesars Entertainment offered free parking at The Linq Hotel in August to see if it would boost visitation. Frissora said it had no impact.

MGM Resorts has no plans to increase resort fees this year, Chief Financial Officer Corey Sanders and Chief Strategy Officer Aaron Fischer told a JPMorgan conference in March.

A Las Vegas Sands Corp. spokeswoman declined to comment on its resort fees. The company, which operates The Venetian and Palazzo, does not charge for parking.

The number of visitors traveling to Las Vegas fell from 42.9 million in 2016 to 42.1 million last year. Four other major U.S. convention destinations — Orlando, Chicago, New York and San Francisco — all saw visitation increases last year. Hotels in those cities also charge resort fees.

Casino executives and the Las Vegas Convention and Visitors Authority said they don’t have evidence the fees are turning people away.

“We believe it is premature to state that resort or parking fees are directly resulting in a net decrease in overall visitation,” LVCVA spokeswoman Jackie Dennis said in a statement to the Las Vegas Review-Journal. However, she did not say whether the LVCVA has asked visitors about whether they are making fewer trips to Las Vegas because of the fees.

Ohio resident Nino Bandera said he’s made close to 100 visits to Las Vegas over the past 50 years to gamble and vacation, but the 69-year-old is skipping Las Vegas this year because of rising Strip fees and higher food prices.

“Enough,” he said of fees. “(It) breaks my heart, but we are going to drive to Tunica and give it a try.”

Illinois resident Chris Max said resort fees are not significant enough to stop him from visiting Las Vegas this March for the NCAA Tournament. Max booked his room at Treasure Island, which charges a daily resort fee of $37.

“People kind of expect those types of hotel charges. It is not a large amount of money,” he said.

The LVCVA blamed the rotation of the triennial CONEXPO-CON/AGG convention in part for last year’s decline in visitation. The construction and agriculture industry gathering is one of the largest U.S. trade shows, attracting roughly 130,000 participants. It was last held in Las Vegas in 2017 and will return in 2020.

Visitation decline

There is no shortage of possible explanations for the valley’s visitation decline.

The Oct. 1, 2017, mass shooting, which left 58 people dead, hurt visitation at the end of 2017 and in early 2018.

The number of visitors last year also was hurt by fewer events like boxing matches during the summer, casino executives from Caesars, MGM Resorts and Wynn Resorts said during earnings calls last year.

International visitation also might have been affected by the declining value of foreign currencies — which makes trips to the United States more expensive — as well as tougher visa requirements.

Competition from other states with gambling also has been growing.

Several resorts have opened on the populous East Coast — including in New York, New Jersey, Massachusetts and Maryland — over the past two years. Tribal casinos in California, the largest visitor market for Las Vegas, have been expanding and upgrading their properties as well.

And about a half-dozen states began offering legal, regulated sports betting late last year, breaking Nevada’s monopoly.

Several of these issues had been widely flagged, yet executives were still surprised by the weak Las Vegas visitation last year, especially during the summer months.

MGM Resorts CEO Jim Murren told Wall Street analysts during the company’s earnings call on Aug. 2 that his company was forced to cut Las Vegas hotel room prices during the second and third quarters to draw leisure travelers because conventions didn’t fill enough rooms.

Frissora told the analysts Aug. 1 during a Caesars earnings call that Las Vegas summer visitation was impacted by fewer events at T-Mobile Arena.

Following the dismal earnings calls, Wall Street analysts began to ponder more seriously whether fees were also to blame.

Brian McGill, a gaming analyst at Telsey Advisory Group, has been warning since at least June that fees were impacting visitors’ perception of Las Vegas as an affordable destination.

He reiterated that thesis in a Nov. 28 report, saying Las Vegas is not as cheap as it looks because of the hidden fees. “Our concern is not so much with the gambling crowd, but on the more casual visitor to Las Vegas,” the report said.

“Visitation to Las Vegas has been in decline now for almost two years during a very strong economic time,” McGill said in the report. “This is due to Las Vegas pricing itself out of being an affordable destination.”

The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson.

Contact Todd Prince at 702-383-0386 or tprince@reviewjournal.com. Follow @toddprincetv on Twitter.

Don't miss the big stories. Like us on Facebook.
Business Videos
How much do Las Vegas casino CEOs make?
Las Vegas gaming CEOs made anywhere between $1 million and $24 million last year, according to company filings with the U.S. Securities and Exchange Commission. ((Las Vegas Review-Journal)
30-year-old Rio needs a little TLC
Nearly 30 years after the Rio opened, the red and blue jewel that helped catapult Las Vegas to a new level with its buffet and nightclub has lost its status along with its shine.
The latest on the Drew Las Vegas - VIDEO
Eli Segall recounts his tour of the Drew Las Vegas, formerly the Fontainebleau, on the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
Pinball Hall of Fame to move near south Strip
Operators of the Pinball Hall of Fame have been approved to build a new, larger arcade near the south edge of the Strip on Las Vegas Boulevard near Russel Road. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
National Hardware Show underway Las Vegas
The National Hardware Show kicked off Tuesday at the Las Vegas Convention Center (Mat Luschek / Review-Journal)
Caesars for sale?
Caesars Entertainment Corp. has been swept up in takeover speculation since the company’s share price tumbled last year amid disappointing earnings and concerns over a recession. Amid the decline, hedge funds scooped up shares. Billionaire activist investor Carl Icahn began buying shares of Caesars as early as January. Icahn acquired nearly 18 percent by mid-March. In February Icahn called on the Caesars board to study a sale as a way to boost shareholder value.
Las Vegas home prices
Las Vegas home prices grew fastest among major markets in February for the ninth straight month. But amid affordability concerns, the growth rate has slowed down. Southern Nevada prices in February were up 9.7% from a year earlier, according to the latest S&P CoreLogic Case-Shiller index. The last time Las Vegas' price growth fell below 10% was in September 2017, S&P Dow Jones Indices reported.
Free Parking Coming To Wynn
Free parking will come to the Wynn and Encore resorts on May 1, 2019. (Mat Luschek / Review-Journal)
Founding Venetian employees talk about 20 years at the Strip resort
The Venetian, which opened May 3, 1999, is celebrating 20 years on the Las Vegas Strip. Seven original employees talk about opening the luxury resort and working there for two decades. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Circa aiming for December 2020 opening
The 1.25-million-square-foot property will have 44-stories and 777-rooms. It will also have a separate nine-story, 1,201-space parking garage.
Boxabl official explains the building concept
Boxabl business development manager Galiano Tiramani shows off a room built by his company. (Blake Apgar/Las Vegas Review-Journal)
TI/Mirage Tram reopens
The tram that shuttles guests between TI and Mirage reopened this week after being closed for much of 2018.
Las Vegas Convention Center expansion taking shape
Renderings and actual footage show how the Las Vegas Convention Center is evolving.
Former Starbucks CEO Howard Schultz at Las Vegas convention
Former Starbucks CEO and potential presidential candidate Howard Schultz spoke at the Epicor Insights user conference at Mandalay Bay Convention Center Wednesday, April 17, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Drew Las Vegas to open in the second quarter of 2022
The 67-story Drew Las Vegas is slated to open in the second quarter of 2022 at the north end of the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
NAB Day 1 (Time Lapse)
NAB kicked off at the Las Vegas Convention Center on Monday, April 8, 2019. (Mat Luschek / Review-Journal)
National Association of Broadcasters Show shows 1mm thick 8K TV with 22.2 channel digital sound
Japan’s NHK Science & Technology Research Laboratories booth featured a 1mm thick 8K TV system used in conjunction with a 22.2 channel digital sound system at the National Association of Broadcasters Show at the Las Vegas Convention Center. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Nevada shoppers react to Smith’s no longer accepting Visa credit cards
On March 1, Smith’s announced that it would no longer be accepting Visa credit cards at any of its 142 supermarkets, including the 45 in Nevada.
Massachusetts Gaming Commission asks how long Wynn executives knew about misconduct
Business reporter Rick Velotta gives an update on the adjudicatory hearing on the suitability of Wynn Resorts to retain its gaming license in Massachusetts.
Henderson app developer part of Startup in Residence
Henderson based developers of the app On Point Barricade are taking part in Startup in Residence, a North America program dedicated to pairing tech companies with governments. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Sam's Town employees and customers talk of their love for the iconic casino
Longtime Sam's Town employees and customers love each other and love their casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas apartments rents
Las Vegas’ apartment market has accelerated in recent years. Developers are packing the suburbs with projects, landlords are on a buying spree, and tenants have filled buildings.
William Boyd talks about the birth of Sam's Town
On the eve of the 40th anniversary of Sam's Town, William Boyd, executive chairman of Boyd Gaming and son of hotel namesake Sam Boyd, talks about how the casino became one of the first local properties in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
High Roller observation wheel turns five
The world’s tallest observation wheel celebrates it’s fifth year on Sunday, March 31, 2019. (Michael Quine/Las Vegas Review-Journal) @Vegas88s
Escape Room Industry Growing In Las Vegas
Escapology employees discuss the growing escape room industry in the U.S. and Las Vegas. (Bailey Schulz/Las Vegas Review-Journal)
Impact of parking fees on visiting the Las Vegas Strip
There are no data showing a relationship between Strip resort and parking fees and the number of out-of-state visitors to Las Vegas. But there are data showing a relationship between Strip parking fees and the number of local visitors to the the Strip. ‘’As a local, I find myself picking hotels I visit for dinner or entertainment, based on whether they charge for parking or not,”’ said David Perisset, the owner of Exotics Racing. ‘’It is not a matter of money, more of principle.’’ A 2018 survey by the Las Vegas Global Economic Alliance found 36.9 percent of Clark County residents reported avoiding parking at Strip casinos that charge for parking. 29.1 percent reported avoiding using any services from a Strip casino that charges for parking.
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Faraday puts Las Vegas land on the market
Nearly two years after Faraday Future bailed on its North Las Vegas auto factory, the company has put its land up for sale. (Michael Quine/Las Vegas Review-Journal)
El Cortez owner Kenny Epstein on running the iconic property
Kenny Epstein, owner of the El Cortez Hotel in downtown Las Vegas, talks about Jackie Gaughan mentorship and answers rumors about bodies in the basement at the mob-era casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
LVCVA recommends construction of underground people mover
The Las Vegas Convention and Visitors Authority announced the recommendation for an underground people mover for the convention center. The system would have the potential to expand and connect Downtown and the resort corridor all the way to McCarran. (Michael Quine/ Las Vegas Review-Journal)