Las Vegas Labor Day visitation may be up 2.8 percent

Labor Day Weekend might be the traditional end of summer, but it won't end the Strip's two-year-long malaise.

Despite optimistic overtones from tourism leaders and the casino industry, consumer spending remains challenged and any increase in visitation over the three-day holiday weekend may not translate into a revenue boom.

Labor Day visitation is projected to increase by 2.8 percent, officials from the Las Vegas Convention Authority said. The holiday weekend is expected to draw 290,000 visitors, up from 282,000 last year.

But with 5 percent more rooms available -- 148,664 this year compared with 141,548 last year -- the citywide occupancy is expected to drop 1.8 percentage points from 90.8 percent in 2009 to 89 percent this year, according to convention authority figures.

The estimated nongaming economic impact, however, is $160.7 million, a drop of 3 percent from last year.

"With the start of football season and a three-day weekend with all kinds of events, we think that trends well for Las Vegas," said convention authority spokesman Jeremy Handel.

The University of Nevada, Las Vegas football opener with 12th-ranked Wisconsin is expected to attract thousands of football fans from the Midwest, Handel said. Weekend performances by entertainers Cher, Carlos Santana, Melissa Etheridge and Jefferson Starship are also expected to draw crowds.

However, convention authority analysts don't believe consumers are willing to spend more than in previous years.

"People are not completely confident and are holding back on their discretionary spending," Handel said.

On a positive note, through June, visitation is up almost 2 percent and visitor volume has increased or remained flat for 10 straight months.

"That gives us some optimism," Handel said.

AAA Nevada is predicting an 11 percent increase in travelers over the holiday weekend. The agency forecast that more than 2.6 million Mountain West residents will travel 50 miles or more from their homes.

"Despite the continued mixed feelings regarding the economic recovery, a strong comeback in travel is anticipated for this holiday weekend," said AAA Nevada spokesman Michael Geeser.

The challenge, said one gaming analyst, is filling the market's increased number of hotel rooms.

In a report to investors a few weeks ago, Hudson Securities gaming analyst Robert LaFleur said many of the major hotel operators are offering rates over the weekend either the same as or lower than a year ago. Saturday's rates were down more than 8 percent from last year. However, as the weekend neared, nightly rates climbed and the rooms were getting filled.

"While Bellagio is not a sellout the Saturday of Labor Day weekend, it has been raising asking rates for that night since July 10th," LaFleur said Friday. "Prior to July 10th they were asking $299 for a room the Saturday of Labor Day weekend. That asking rate has been increased four times and now stands at $379."

He said the good news for Strip operators is that properties have increased rates and are filling the rooms, which has been a trend during weekends and for major events.

The bad news is the midweek continues to be slow.

"You don't have to be a rocket scientist to fill a casino on Saturday night of a holiday weekend," LaFleur said. "The challenge Las Vegas still faces is generating profitable midweek business. We've seen very little positive movement in weekday room rates, so clearly this is still the more daunting challenge faced by the Strip."

Drive-in traffic into Las Vegas is up almost 5 percent through June and is up 4 percent from just Southern California. Hotel operators are banking on that trend continuing through the weekend.

Many travelers are booking last-minute trips to Las Vegas for this weekend," said MGM Resorts International spokeswoman Yvette Monet. "We expect our Strip resorts to be completely full on Saturday night. There is still some room availability at rates similar to last year's room rates."

In the locals market, Station Casinos spokeswoman Lori Nelson said the company's hotels are running at close to 99 percent occupancy.

"We have a lot of promotions, concerts and events at each of our properties and the start of college football season, so we expect a great buzz around all of our casinos all weekend long," Nelson said.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.