Odds good even Vegas impacted by recession
The economic slowdown has even affected Las Vegas, which is reporting declining hotel occupancy and rates in the city, according to a recent report by the Las Vegas Convention and Visitors Authority (LSCVA).
Las Vegas saw a 2.4% drop in total occupancy levels and a 5.5% decline of average daily rates in May compared with the same time last year.
Though “the magnitude of the drop is surprising, the more important number to focus on is occupied room nights,” said Jeff Lugosi, senior vice president of PKF Consulting in Los Angeles. He added:
“They are basically flat over last year through May. Tourist numbers are up and convention numbers are down, but Las Vegas is still maintaining its number of occupied rooms and demand is growing.”
Vegas was already operating at above-average occupancy levels, tourism officials point out.
“A weekend occupancy of 92 percent and an ADR of $130 is phenomenal,” Jan Freitag, vice president of global development at Smith Travel Research, told BTNOnline. He added:
“That is an incredible occupancy, but in Vegas that is a gloom and doom number because their numbers used to be so high.”
Other tourist officials say the drop may be just a temporary “blip.â€
One problem is the airlines have cut back with seat capacity set to drop by 12% this quarter, according to JP Morgan Chase airline analyst Jamie Baker.
“The airlines are cutting back on less-profitable routes and those routes are to leisure destinations,” said Warren Marr, director of PricewaterhouseCoopers in Philadelphia, “but getting someone to pay up for a convention is a different story.†He added conventions were not as impacted as leisure travel.
There are about 32,000 new rooms in the pipeline at Vegas through 2011, according to the LVCVA.
Report by David Wilkening
David
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