Visitation slips 8 percent in February despite deep discounts - Business

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Apr. 08, 2009
Copyright © Las Vegas Review-Journal

Visitation slips 8 percent in February despite deep discounts

By BENJAMIN SPILLMAN
LAS VEGAS REVIEW-JOURNAL

Deep discounts helped attract tourists to Las Vegas resorts but not enough to offset a lousy economy, according to tourism figures showing local visitation fell 8 percent in February to about 2.8 million people.

Visitation numbers from the Las Vegas Convention and Visitors Authority painted a picture of a struggling destination that's pulling out all the stops to attract business.

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"You can't just sit there and wait for tourism to go back up," said Michael Crandall, director of business affairs for the Siegel Group, which owns the Gold Spike downtown.

Crandall and owner Stephen Siegel are in the midst of a multimillion-dollar renovation despite the economy.

They're offering rooms for $19.99 per night on major travel Web sites and have managed to fill the hotel 15 of the last 25 nights, even though the city posted its lowest citywide occupancy rate for a February since 1991.

"Is it scary out there? Yeah," Crandall said. "But it is not going to slow us down."

The February occupancy rate of 83.9 percent was 5.5 percentage points lower than February 2008 and the lowest February rate since 82.2 percent in 1991, although back then the city had fewer than 75,000 available rooms compared to an inventory of 140,729 today.

In the first two months of 2009, about 5.6 million people visited Las Vegas, a drop of 10 percent from the pace set last year.

More dramatic, though, were the discounts hoteliers are offering to attract customers.

The average daily room rate in February was $99.25, a 22.9 percent decrease from last year's price of $128.80.

The decline in February visitor numbers was worsened by the fact that 2008 was a leap year, meaning February had an extra day last year. After accounting for the lost day by adjusting figures to show daily visitation, the decline was 4.7 percent fewer visitors per day in 2009.

The visitation decline was steepest among people who arrive by air.

Traffic at McCarran International Airport was down 15.2 percent for the month compared to just a 1.9 percent decline in the number of vehicles driving in and out of Nevada.

Daily auto traffic on Interstate 15 at Primm, where most California visitors pass en route to Las Vegas, fell just 0.1 percent.

February was also a slow month for conventions.

Not only did dates for several major conventions shift to different months, February was also when President Barack Obama publicly scolded bailout-accepting banks for scheduling meetings in Las Vegas. Many of the companies ultimately canceled or moved their meetings to other cities.

Convention attendance was down 34.8 percent in February to 583,168.

Date-shifting of events into January or March by two outdoor sporting events, a wireless technology event and a hospitality event accounts for about 77,000 visits being tallied in those months, according to the convention authority.

Straightforward budgeting decisions by companies trying to save money on travel accounts for an untold portion of the decline.

Concern by companies about the appearance of hosting or attending an event in Las Vegas may also have contributed.

"Part of it we think is the perception issue we had," said Kevin Bagger, director of Internet marketing and research for the Las Vegas Convention and Visitors Authority. "It is hard to separate that from other things."

New York-based money and markets blogger Mark Gimein, who blogs at www.chumpchanger.com, said the bad publicity associated with the fallout of the bank bailout controversy could linger.

"For the next year, year and a half, it is going to make people a little gun shy," he said.

The news wasn't any better for the Clark County gambling towns of Mesquite and Laughlin.

In Mesquite visitation fell 31.9 percent to 94,005 people for the month. The average daily room rate fell 13.3 percent to $59.38.

Laughlin visitation was down 17.2 percent to 206,563. The average daily room rate there fell 3.4 percent to $37.94.

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

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. perry wrote on April 12, 2009 12:54 PM: bring back the mob days they treat u better perry wrote on April 12, 2009 12:50 PM: they probably blaming OBAMA for this too the hotel police wrote on April 11, 2009 04:13 AM: " Visitation slips 8 percent in February despite deep discounts" If the casinos think $128.80. down to $99.25 is a deep discount, well, well, well I am just flabbergasted to say the least. To us locals a deep discount would be something like $79.00 to 19.95 a night. Now that’s my kind of Vegas Outoftowner wrote on April 08, 2009 02:27 PM: You know the problem with the casino's in Vegas is, that during the good times when everyone came to town regardless of the cost, the big resorts screwed the small customers and discontinued comps and other things they use to attract customers with. Now they are crying because no one is coming through the front doors and the high rollers are even few and far between. To bad that they didn't learn their lesson because now there are lot's of places other than Nevada to gamble and one is treated much better. I use to come to town 4 times a year but now, maybe once a year to see a show and I will save my gambling dollars for another state where the slot payback is better and the airfares are less. Ken wrote on April 08, 2009 12:42 PM: The casinos are not failing because of the way they have treated locals but it does not help them now that as they struggle for dollars, locals are less inclined to go to Strip resorts that shafted them for years. If MGM has to do an analysis and create business models to determine the cost benefit of giving someone who plays $25/hand blackjack for four hours a day during a three day weekend, a pack of cigarettes gratis, then they will continue to fail. It really is that simple. CarRentalOuch wrote on April 08, 2009 12:13 PM: Well, I'm coming in May as usual with a pretty good room rate--but not the best. But OMG, the rental car prices! I've NEVER seen them so high in LV. I guess car companies aren't hurting. In the end I booked an ok rate for a car I didn't really want but still higher than usual. I keep hearing about all these discounts but aren't really able to book any of them...so the joints aren't trying too hard. True wrote on April 08, 2009 12:05 PM: I completely agree with the repeat clients being important. I was working at the Imperial Palce the other day. It is an older, crummy (in comparison to new hotels) pit. A gentelman came up to me and started talking. He said that they have been coming to the I.P for 20 something years. He said the staff is what brings him back every year. When he arrives the staff from front desk to house keeping know his name, and he is always felt welcomed. When the Stardust was blown up, we heard many similar stories. The mega resorts cannot afford to offer discount, they are too large to recognize the average client. Vegas has changed, but not for the better, now we are suffering for it. br wrote on April 08, 2009 08:23 AM: Many hotel casinos built over the last few years have targeted high rollers from all over the world. That's a comparatively small market. It's even smaller with the current global economy. A lot of them have lost their wealth in the type of gambling known as the stock market. Now they can't afford Circus Circus, much less the Bellagio. The low rollers, especially locals, find few bargins. The current deals on hotel rooms are padded with a buffet of special fees. My recent visitors checked into one of the main hotels and was hit with an extra $60 up front. It was for services they had no intention of using. That family of 5 will not be back. I'm passing the word so other friends will know what to beware of. Michelle wrote on April 08, 2009 07:22 AM: Amen "We don't need locals"! The corporations owning the mega maze hotels dissed locals and then overcharged the tourists thinking everyone would just pay whatever they said. I actually saw a comment board where people in other states and countries were commenting on trips to Vegas they made in the last few years and they were gouged so bad they were angry and all said they wouldn't be coming back any time soon. In tough times you make your money on repeat customers. If you ignore the locals and treat the tourists like crap you'll get no money from the locals and you'll get that tourist money once because they're already here but never again. AND they will tell everyone they know what a crappy deal a vacation to Las Vegas is with its $15 martinis and half shots at hotel bars when they get home. Word has gotten around that Vegas isn't a good deal anymore. Lots of people especially in this economy think twice before going to Vegas when they can just go to their nearest Indian casino and save their money. We don't need locals wrote on April 08, 2009 06:44 AM: When times were good the casinos failed to keep attracting the locals and had the attitude that there were so many tourist no one needed the locals business. If you want the locals business you are going to have to earn it and cut back on the greed and make a trip to the casino fun. Pass out the comps then maybe you can lure some locals back. All of the mega maze hotels that were built is proof the locals were ignored.