Rates still low, but recovering

Friday, Oct. 5, 2001 | 10:39 a.m.

Las Vegas hotel room rates remain well below last year's levels, but have shown some signs of recovering in the past several weeks, a Bear Stearns brokerage house survey found.

The average three-week advance rate for the weekend of Oct. 27 was $185 on the Strip, down 25 percent from last year, Bear Stearns gaming analyst Jason Ader said. The midweek rate was down 42 percent to $108.

"It almost goes without saying that most operators continue to lower room rates in order to drive occupancies and business volumes," Ader said. "We expect this will be the 'norm' for the foreseeable future."

However, Ader noted that room rates have been trending upward in October. The average weekday rate for Oct. 27 is 11 percent higher than the Oct. 10 rate, while weekend rates are up 8 percent over that period. Still, Ader expressed caution over drawing hard conclusions from that rise, saying Strip operators still have "little sustainable room pricing leverage over the near future and would expect to see continued volatility (in room rates)."

The worst erosion in rates for the Oct. 27 period was seen by MGM MIRAGE. Its five properties saw midweek rates fall 43.5 percent to $198, while weekend rates were off 45 percent to $260. Still, both rates were above the Strip average. Park Place Entertainment Corp. showed the worst decline in midweek rates, with a 50 percent decline to $110.