Las Vegas is booming: Why it’s so hard to find a great deal on a hotel room!
With 130,000 hotel rooms available (148,978 if you include Nye and Laughlin counties), you’d think you’d be able to find “bargains.” You are most likely wrong! Finding a “deal” in a city whose Major Resort properties are operating near capacity is becoming increasingly difficult. Why? Because the main tourist properties are controlled by a select group of companies that have no incentive to discount.
Vegas Law of Supply and Demand
Consider for a moment the simple law of “Supply and Demand.” When supply is high and demand is low, prices go down. Las Vegas is a boom town, demand is high and supply is low. How could that be with 130,000 rooms? The answer is simple: 30 million annual visitors and growing! In fact, the growth rate is so phenomenal that Mega Resorts like Mandalay Bay (43-story $375 million, 1,120-suite Spa Tower completed December 2004) and The Venetian (currently expanding) and the Wynn The recently completed $2.4 billion Las Vegas (opened April 2005) is adding thousands of rooms to the “Heart of the Strip.” So phenomenal is the growth that even state financiers like Donald Trump are getting in on the action. The demand for rooms exceeds the supply, so prices are going up!
According to a July 30, 2004 interview in USA Today, Trump’s plans include a 64-story hotel-condominium tower to be built on a portion of the Frontier Hotel property across from the Wynn Las Vegas Resort and next to the Fashion Show Mall.
Scheduled to begin construction sometime in 2005, the $300 million project will feature 1,000 hotel rooms and 50 luxury residential units modeled after the Trump International Hotel and Tower in New York. There will be no Casino on the property.
Only 10% of Las Vegas hotels are booked online
In several articles I’ve researched this year in various trade magazines and by hotel industry analysts, the actual booking rate for hotels that offer online services to their visitors is approximately 10% nationally. I think this is also an accurate representation of Las Vegas. (Our company has several websites that offer hotel reservations and these numbers are in line with ours.)
Additional proof: “Only about 10 percent of our rooms are booked on Hyatt.COM,” said Gary Gotling, director of sales and marketing for Hyatt Regency Tampa.
This means that 90% of you are using the Internet to collect information, but you are not actually making your reservation online! Traditional travel agents and phone calls remain the preferred method of booking. The Internet is being used as a source of information gathering and little else. The great players know this and use it to their advantage. Again, there is no incentive to offer lower rates if your customers don’t take advantage of them. I’ll touch briefly on the room tax issue by saying that most local governments hate the Internet because rooms booked online by out-of-state interests are cutting into their available tax fund. Expect local government officials to act sooner rather than later on this issue.
So where does your money go when you book online?
If you search Vegas.com, you will find that they are owned by Greenspun Media Group (Henderson, NV), which publishes the Las Vegas Sun Daily Newspaper and owns Vegas Magazine, Showbiz Weekly, In Business, Las Vegas Weekly, VegasGolfer, Las Vegas. Life and The Ralston Report. Greenspun Media is part of the Greenspun Corporation, which also owns local channel 25 UPN. Greenspun is a partner in Las Vegas ONE, a cable news channel. American Nevada, the real estate division of The Greenspun Corporation, is among the most recognized commercial and residential developers in the Las Vegas Valley. Your annual advertising budget is over 7 figures! Someone has to pay the price for all that advertising.
You can try the popular LasVegas.com website, which has an interesting and storied history. The site’s domain was licensed in 2002 from Stephens Media Group of Littlerock Arkansas (Las Vegas Review Journal, Hawaii.com) for Mandalay Resort Group and Parkplace Entertainment. Follow us now: 2004 Park Place became Caesars Entertainment, which in turn was acquired by Harrah’s Entertainment. This deal came just a month after MGM/Mirage agreed to purchase the Mandalay Resort Group. Do you need a room on the strip? Hmmm – I think the price will be pretty consistent! And to think you could have owned LasVegas.com in 1997!
IAC (InterActiveCorp) run by Mega Financier Barry Diller operates these online travel booking agencies
Holidays on Expedia.com
Expedia Vegas Packages
hotwire.com
TripAdvisor.com
Hotels.com
IAN.com
Note(s): Expedia is #1 in total online travel bookings for third-party Internet-based booking agencies. But their share of the total “reserve pie” is still very small. Mr. Diller also oversaw the recent acquisition of “Ask Jeeves” for just $1.85 billion. He doesn’t expect room prices to drop anytime soon.
Saber Holdings Corp owns:
Travelocity – #3 in travel bookings
Note: Saber was the “big player” in the travel agent industry, as most travel agent computers were connected to their reservation systems. Travelocity ranks third behind Expedia and Orbitz (now owned by Cedant Corp.)
Cedant Crop is the world’s leading hotel franchisor with over 6,400 locations and owns or franchises:
Orbitz – #2 in travel visitors
Accommodation.com
HotelClub.com
Ratestogo.com
FYI: Cadant also owns Avis & Budget Rent A Car, Fairfield Resorts (timeshare resorts), Cheap Tickets.com, and Century 21 and Coldwell Banker Real Estate Franchises.
So where does this leave you? I suggest you quickly read the following tips.
Quick tips for Las Vegas visitors on a budget?
You’re probably thinking I’ll suggest visiting in the “off season”. Do not do it! August temperatures often exceed 110 degrees, and that’s air temperature, not heat radiating off concrete and asphalt. No, I suggest you do something much simpler: don’t go near the strip! Car rentals are cheap when you compare them to the exorbitant prices of the best “On Strip” Mega Resorts. Try a hotel in Henderson or Summerlin. I would suggest smaller resorts like The SunCoast or The Orleans.
Get a rental car and park behind the Excalibur, New York New York, or at the Fashion Show Mall (it’s covered and very secure). Click on Internet Ads and see what’s available. While 90% of rooms are booked to capacity, hotels that aren’t fully booked actually advertise! Click on those ads! I once stayed at the Fiesta Henderson for $29.95 a night for 3 nights in a row, and I had a suite with 2 queen rooms! I found this offer in an internet advertisement! In fact, when I called the hotel to try and get an even better deal, they told me I had to book online! Try corporate accommodation, as it’s usually full on weekdays, but is available on weekends when business travelers head home. Visit the websites of the hotels you’d like to stay at and sign up for their email promotions to have offers sent directly to you before your trip (use a free address like Hotmail for this purpose). Ask at the desk when you check in for any additional benefits or offers available to guests. It’s like asking for a window seat on a plane, if you don’t ask, you won’t get it. And my final tip is form before fashion: bring your most comfortable walking shoes and stock up on bottled water at the local store before checking in. Enjoy!