New figures show Las Vegas has much higher room occupancy

Monday, Dec. 22, 1997 | 4:43 a.m.

Occupancies are trending down for the industry as a whole, the study by Ernst & Young LLP found. Occupancy levels are projected at 64.8 percent for 1997, down from 65.2 percent reported by Smith Travel Research last year.

However, the news is not all doom and gloom. Average daily room rates have increased 7 percent to $75 this year, the E&Y report goes on to say. The rates are expected to grow to about $80 in 1998 and to $84 in 1999. Also, profits are forecast to be a record $14 billion on total revenues of $80 billion.

Las Vegas, with its upscale, full-service hospitality sector, is somewhat immune to the overbuilding, said Chase Burritt, national director of E&Y Kenneth Leventhal's hospitality services group in Miami.

"The downward trend (in occupancy rates) is of no concern to the Las Vegas marketplace in the broad scheme of things," Burritt said.

In Las Vegas, where 10,000 rooms were added to the inventory since September 1996, hotels saw occupancy rates drop from 94.6 percent to 91.4 percent through the first nine months of this year. Motel occupancy suffered a decline of 6.4 percentage points from 77.5 percent to 71.1 percent.

"Las Vegas has always had growth," said Van Heffner, president of the Nevada Hotel & Motel Association. "Then it gets tight and we go to another level. Growth is always there with a little adjustment."

Heffner said Las Vegas will need to create more events such as the National Finals Rodeo and Saturday's Las Vegas Bowl to attract more visitors.

Third-quarter statistics from the Las Vegas Convention and Visitors Authority show a 3.2 percent increase in visitors through September to more than 23 million, but it has not kept pace with the 10 percent rate of increase in rooms.

"Strategically, we need to take it to another level," Heffner said.