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September 2, 2014

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Visitor volume decline narrows, but average daily room rates plummet further

Convention attendance and average daily room rates plummeted in March, and gamblers held onto their wallets, according to statistics released last week by the Las Vegas Convention and Visitors Authority and the state Gaming Control Board.

Visitor volume was down for the 10th straight month, but the percentage decline was the shallowest in seven months, giving the resort community a glimmer of hope.

The authority reported 3.2 million visitors, a decline of 6.5 percent from March 2008, and the total number of room nights occupied was off by only 2.7 percent from the previous year.

But business travel — convention attendance — was down 30 percent to 446,588 from the previous year, exacerbated by the absence of the monstrous ConExpo-Con/Agg construction trade show this year. In March 2008 the show, which occurs every three years, brought about 144,000 people to the city.

There also were fewer shows in March: 1,824, down 19.6 percent from the previous year.

Citywide occupancy was down 6.3 percentage points to 85.9 percent with midweek occupancy down 7.8 points to 83.6 percent. Weekend occupancy was relatively healthy at 92.5 percent, down only 1.8 percentage points from last year.

By comparison, Smith Travel Research says the average U.S. occupancy rate was 55.2 percent.

But the higher weekend occupancy came at a price: Resorts saw the average daily room rate fall 31.6 percent to $92.46. It was the lowest average daily room rate since December 2004 when the rate hit $82.24.

For the first quarter visitor volume declined 8.7 percent to 8.8 million people. Convention attendance is off 29 percent for the quarter to 1.6 million, and there have been 4,904 shows, off 18.3 percent from the first quarter of 2008.

Gaming revenue also was down in March.

The Control Board reported Clark County gaming revenue at $786.5 million, a 9.8 percent decline from March 2008. Strip revenue was off 12.3 percent to $456.1 million, and statewide it was down 11.6 percent to $918.2 million.

Only one of 16 geographic markets had higher revenue this year than last. North Las Vegas showed a 9.7 percent increase in revenue, thanks to Aliante Station, which opened in November.

Two new properties on the Boulder strip, which incorporates properties in Henderson, resulted in a smaller downturn. Revenue was off 4.1 percent to $79.4 million, thanks to revenue generated by Eastside Cannery, which opened in August, and the M Resort in March.

Outlying Clark County resort destinations are suffering.

In Laughlin visitor volume was down 17.1 percent to 234,142 in March. For the quarter it was off 15.5 percent to 653,344.

Hotel occupancy is off 9.3 percentage points to 70.9 percent for the Colorado River town and the average daily room rate is down 5.6 percent to $36.13.

Mesquite’s visitor volume was down 24 percent to 113,378 in March and 28.7 percent to 295,566 for the quarter.

Measures taken to minimize the financial damage appear to be working. In December operators of the Oasis closed its more than 700 hotel rooms to reduce capacity. As a result occupancy climbed 3.8 percentage points to 96.3 percent and the average daily room rate fell only 3.3 percent to $57.91.

But gaming revenue for Mesquite fell 29.2 percent to $12.4 million for the month.

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