Rates for rooms at discounts

Las Vegas tourist Evan Burgstahler already upgraded his accommodations from Excalibur to Monte Carlo to Encore and his New Year's vacation hasn't even started.

Burgstahler, 22, of Chicago booked Excalibur four months ago, "before the economy seriously started tanking," and has since moved up to a better class of surroundings for about the same money.

"I'm really kind of surprised," he said. "As things started going south ... I was just kind of upping my tier of hotel."

Burgstahler will start his vacation Dec. 28 at Encore for $219 per night, then move on to Monte Carlo to take advantage of a three-night deal for $450 that includes New Year's Eve.

He had been expecting to sink about $1,500 on lodging for a New Year's Eve vacation in Las Vegas, typically one of the costliest times of the year. But it turns out he'll only spend about $850.

Burgstahler won't be the only holiday reveler spending less to ring in 2009 on the Strip.

Room rates for New Year's Eve are as low as they've been in recent memory, according to people at online booking sites.

Declines from the halcyon days of 2006 and 2007 are even more dramatic when comparisons include the days just before and after Dec. 31, which is when rates peak.

In some cases room rates are lower this year than they were at the end of 2003, the last time New Year's Eve fell on a Wednesday.

Back then the average daily rate on the booking site www.i4Vegas.com was $145 among people who checked out from Jan. 1 to Jan. 3. This year the figure is $97.

"From a consumer standpoint, there is a benefit," said Michael Zaletel, who operates the site. "We have got just about every hotel available and good deals."

In addition, there are properties that won't require a multi-day stay, meaning folks who want to drop into town just for the holiday can do so and be home in time for kickoff of the Rose Bowl.

"There are some hotels which are allowing that, which is really rare," Zaletel said.

People who want to savor the moment are also in luck.

In the past room rates have shot up around Christmas in a gradual rise to a New Year's Eve peak.

This year prices for rooms appear to be hovering around the post-rodeo level, which is typically the most affordable time of the year to visit Las Vegas.

"The nights before and after New Year's are not getting any sort of premium," he said.

The story was the same at www.Vegas.com, another vacation-booking Web site.

Vegas.com expert Bryan Allison said the average daily rate for stays that include Dec. 31 is $198, down 22 percent from last year.

"There are a lot of promotions out there," he said.

Although low rates are a function of a struggling economy that already has Las Vegas posting double-digit visitation declines in recent months, they do work to fill rooms.

Allison said volume is up 29 percent at www.Vegas.com and Zaletel said the rate at which his site converts browsers to paying customers is up.

In addition to driving room sales, Allison said the lower rates mean people have more money to spend on other diversions.

Full-price show ticket sales are up 40 percent, he said. Allison also said the site is posting "record numbers" for "front-of-line" pass and bottle service sales at night clubs.

Keeping rooms full with the hopes customers will spend elsewhere is the idea behind the cheaper rates.

It's an age-old strategy Las Vegas resorts use to adapt to hard times.

"It is better to get the people in there paying some rate, while they are there they will spend some money," said Deutsche Bank analyst Bill Lerner. "They don't want the place to be empty."

It's a trend Lerner said could continue for a long time.

The days of resorts naming their price and customers rushing to meet it are long gone, he said.

"I think it may take years to get back there," Lerner said.

In the meantime, resort managers will need to rediscover an aptitude for using great deals and competitive service levels just to maintain their current customer bases.

Lerner said even resort companies that grew fat on record room rates and unprecedented demand will adapt.

"I think these are pretty sophisticated management teams," he said. "I don't think hubris will get in the way for the most part."

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.