Las Vegas Is Booming: Why It's So Hard To Find A Good Deal On A Hotel Room!

 


Visitors: 398

With 130,000 available hotel rooms (148,978 if you throw in Nye County and Laughlin) you might think there would be a “Deals” to be found. You would most likely be wrong! Finding a “deal” in a city whose Major Resort properties run near capacity is becoming increasingly difficult. Why? Because the top resort properties are controlled by a select group of companies that have no incentive to discount.

Vegas’ Law of Supply and Demand

Consider for a moment the simple law of “Supply and Demand”. When the supply is high and the demand is low the prices drop. Vegas is a boomtown, the demand is high and the 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 featuring 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) are adding thousands of rooms to the “Heart of the Strip”. So phenomenal is the growth that even out of State Financiers like Donald Trump are getting in on the action. The Demand for Rooms is exceeding the supply so the prices are rising!

According to an interview published July 30, 2004 in USA Today Trump's plans include a 64-story hotel-condominium 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 several articles I've researched this year published in various Business Journals and by Hotel Industry analysts the actual booking rate for Hotels offering online services to their visitors is approximately 10% Nationwide. This I believe to be an accurate representation of Las Vegas as well. (Our company runs several websites offering Hotel Booking and these numbers are in line with our own).

Further Proof: “Only about 10 percent of our rooms are booked at Hyatt. COM, " said Gary Gotling, director of sales and marketing for Hyatt Regency Tampa.

This means 90% of you are using the Internet to gather information, but are not actually making your reservation Online! Traditional Travel Agents and telephone calls are still the preferred method of booking. The Internet is being used as an information gathering source, and little more. The big Players know this 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 touch briefly on the issue of Room Taxation by saying that most local Governments hate the internet because rooms booked online by out of State interests are cutting into their available tax pool. Expect local Government officials to act sooner than later on this issue.

So where does your money go when you book online?

If you search Vegas.com you’ll find 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 the Greenspun Corporation, which also owns local Channel 25 UPN. Greenspun is a partner in Las Vegas ONE, an all-news cable 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. Their annual advertising budget exceeds 7 figures! Somebody has to pay the price for all that advertising.

You might try the popular website LasVegas.com which has an interesting and storied history. The site Domain was licensed in 2002 from the Stephens Media Group of Littlerock Arkansas (Las Vegas Review Journal, Hawaii.com) to the Mandalay Resort Group and Parkplace Entertainment. Follow along now - 2004 Park Place became Caesars Entertainment, which in turn was purchased by Harrah's Entertainment. This deal came just one month after MGM/Mirage agreed to purchase the Mandalay Resort Group. Need a room on the strip? Hmmm - I think the pricing is going to be pretty consistent! And to think that you could have owned LasVegas.com as late as 1997!

IAC (InterActiveCorp) run by Mega Financier Barry Diller operates these online Travel Booking Agencies

  • Expedia.com Vacations
  • Expedia's Vegas Packages
  • Hotwire.com
  • TripAdvisor.com
  • Hotels.com
  • IAN.com

    Note(s): Expedia is #1 in total online Travel Bookings for 3rd party internet based booking agencies. But their piece of the total “booking pie" is still very small. Mr. Diller also oversaw the recent acquisition of “Ask Jeeves” for a mere $1.85 billion. Don’t expect those room prices to drop any time soon.

    Sabre Holdings Corp owns:

    Travelocity - #3 in Travel Bookings

    Note: Saber was the “Big Player” in the Travel Agent industry as most Travel Agent computers tied into their booking systems. Travelocity is #3 behind Expedia and Orbitz (Now owned by Cedant Corp. )

    Cedant Crop is the worlds top Hotel Franchiser with over 6,400 locations and owns or franchises:

  • Orbitz - #2 in Travel Visitors
  • Lodging.com
  • HotelClub.com
  • Ratestogo.com

    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'd suggest you take a quick read of the tips below.

    Quick Tips for Vegas Visitors on a Budget?

    You’re probably thinking I’ll suggest visiting in the “off season”. Don’t do it! August temperatures often exceed 110 degrees – and that’s the air temperature not the heat radiating off of the concrete and asphalt. No I’m going to suggest you do something much simpler – stay off the strip! Car rentals are cheap when you compare them to the exorbitant prices of the top “On Strip” Mega Resorts. Try a Hotel in Henderson or Summerlin. I’d suggest smaller resorts like The SunCoast or The Orleans.

    Get a rental car and park behind the Excalibur, New York New York, or in the Fashion Show Mall (It’s covered and very secure). Click on Internet Ads and see what is available. While 90% of the rooms are booked at capacity the Hotels that are not booked fully actually do advertise! Click 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 deal on 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 it’s usually full during the weekdays but available on the Weekends when the business Travelers return home. Visit the websites of Hotels you may want to stay at and sign up for their email promos so you get offers sent directly to you before your trip (Use a free address like Hotmail for this purpose). Ask at the desk when you sign in for any additional perks or offers available to guests. It’s kind of like asking for the window seat on the airplane, if you don’t ask for it you won’t get it. And my final tip is Form before Fashion – bring your most comfortable walking shoes and stock up on bottled water at the local grocer before you check in. Enjoy!

    Avagant, Inc. is a web marketing company with particular interest in the Travel Industry. We've been producing visitor friendly websites since 1996. Interested readers may learn more about Las Vegas or Henderson Nevada through our sites: http://www.ablasvegas.com (Avagant's Las Vegas Guide) or http://www.las-vegas-coupon.com (Advice on Coupons, Deals, and Promotions), http://www.nevadahenderson.com (Henderson Nevada Services and Relocation Guide).

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