With 130,000 hotel rooms available (148,978 if you include Nye County and Laughlin), you might think “bargains” would be found. You are most likely wrong! It’s increasingly difficult to find a “deal” in a city whose major resort properties are operating near capacity. Why? Because the best resort properties are controlled by a select group of companies that have no incentive to discount.
Las 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. Vegas is a booming city, 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 Spa Tower with 1,120 suites completed in December 2004) and The Venetian (currently expanding) and the recently completed $ 2.4 billion Wynn 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 jumping in on the action. Demand for rooms is outstripping supply, so prices are increasing!
According to an interview published July 30, 2004 in USA Today, Trump’s plans include a 64-story hotel-condo 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 various articles that I have researched this year published in various business magazines and by hotel industry analysts, the actual booking rate for hotels offering online services to their visitors is approximately 10% nationally. I think it is also an accurate representation of Las Vegas. (Our company has several websites that offer hotel reservations and these numbers match ours.)
Proof more: “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. Great players know it 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 briefly touch on room taxes by saying that most local governments hate the internet because rooms booked online for out-of-state interest are reducing their available tax pool. 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 Greenspun Corporation, which also owns the local UPN channel 25. 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 exceeds 7 figures! Someone has to pay the price for all that publicity.
You can try the popular LasVegas.com website, which has an interesting and storied history. The Domain site was licensed in 2002 from the Stephens Media Group of Littlerock Arkansas (Las Vegas Review Journal, Hawaii.com) to Mandalay Resort Group and Parkplace Entertainment. Go on now: In 2004 Park Place became Caesars Entertainment, which was in turn bought by Harrah’s Entertainment. This deal came just one month after MGM / Mirage agreed to purchase Mandalay Resort Group. Do you need a room on the Strip? Hmmm, I think the price will be pretty consistent. And to think that you could have owned LasVegas.com until 1997!
IAC (InterActiveCorp) managed by Mega Financier Barry Diller operates these online travel booking agencies
Holidays on Expedia.com
Expedia packages in Las Vegas
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. Don’t expect room prices to drop anytime soon.
Saber Holdings Corp owns:
Travelocity: n. 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 is number 3 behind Expedia and Orbitz (now owned by Cedant Corp.)
Cedant Crop is the world’s leading hotel franchisor with more than 6,400 locations and owns or franchises:
Orbitz – # 2 in travel visitors
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 that I suggest you visit “off season”. Do not do it! August temperatures often exceed 110 degrees, and that’s the air temperature, not the heat radiating from concrete and asphalt. No, I’m going to suggest you do something much simpler: stay away from the strip! Car rental is cheap when compared to the exorbitant prices of the best Mega Resorts “On Strip”. 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 Excalibur, New York New York, or at the Fashion Show Mall (it’s covered and very safe). Click on Internet Ads and see what’s available. While 90% of the rooms are booked at maximum capacity, the hotels that are not fully booked are advertised! 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 ad! 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 housing, as they are generally full on weekdays, but available on weekends when business travelers return home. Visit the websites of the hotels you may wish to stay at and sign up to receive their promotions by email to have them send you offers directly before your trip (use a free address such as Hotmail for this purpose). Inquire at the counter when you check in to learn about additional benefits or offers available to guests. It’s like asking for the airplane window seat, if you don’t ask for it, you won’t get it. And my last tip is form over fashion: bring your most comfortable walking shoes and stock up on bottled water at the local grocery store before checking in. Enjoy!