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Summer 2009 Room Rate Comparison - w/charts!

By Chuckmonster on Tuesday, 2nd June 2009 5:12pm
  » filed under Las Vegas  comments: 2


Summer is here and the time is right for researching hotel room rates for weekend getaways. Oh yeah!

For shirts and goggles, I picked four hotels to study rate fluctuations for 'long weekend' trips over the next two months. I chose the properties - Planet Hollywood, Flamingo, Mirage and Bellagio - because a) they are owned by three different companies b) quality ranged from three star to five star and c) could demonstrate if price fluctuations of properties owned by the same company (Bellagio & Mirage) are determined on a corporate or property level.

The image above is the data scraped from their booking engines, which I dumped into an XLS spreadsheet. This is what those numbers look like as a graph:

Which makes sense probably if you stare at it for an hour or so. To make comparisons easier, I calculated the average daily rate for each weekend (ADWR - Average Weekend Daily Rate) at each property, as well as a separate column for the "Average of the Averages".

Calculations revealed that the average daily room rate for the period (ADPR - Average Daily Period Rate) at all properties was $201, and fluctuated from a low of $158 for the last weekend sampled (7/23) to a high of $228 on the July 4th holiday, as one would expect.

What wasn't expected was seeing what caused the 7/4 rate bounce - a whopping 56% increase from the previous week at Planet Hollywood with a $269 AWDR. Surprisingly, both Flamingo and Bellagio's rates are down from previous weeks

What I would look for in making travel decisions based on pricing is to note when the ADWR (the graph lines) for a property dips below its ADPR (the colored numbers in the left column) at a downward slope that is equal or greater than the slope of the "Average of the Averages" line (purple). This gives an inkling that a property's effective value has increased due to downward pricing, ie. getting more bang for your buck.

Case in point, Bellagio dips dramatically on the weekend of 6/11, to well below its $265 ADPR. The Average of the Averages also dips, but not nearly as steeply, which shows that Bellagio's rates have dipped greater than the overall trend.

Now, this is just part of the picture. To really see how room rates are trending, it is important to compare individual property pricing trends as percentages change.

Comparing the For the weekends of 6/11, 7/4, 7/16 and 7/23, Bellagio is by far the best buy of the group, even if is the most expensive (with 7/4 weekend the sole exception.) For the weekend of 6/25, the Flamingo is the best buy. For the weekend of 7/9, Mirage is the best buy. Of all of these properties, it is apparent that Planet Hollywood has the most volatile rates, which is something that I would keep in mind when considering booking there.

I don't see any evidence that MGM Mirage is controlling pricing via a single up and down lever at the top of the corporate structure. Both Mirage and Bellagio's AWDR and Change % graphs are incredibly independent of each other. This means that individual properties within the MGMMirage family are (theoretically) competing against each other, not voting the market up and down as a bloc.

It might be interesting to perform the exact same study one week from now using fresh data scraped from the casino websites and comparing changes. If any of you armchair XLS jockeys want to take a crack at it, I'll send you the spreadsheet I used.

One final thought, did you ever notice how almost all Harrah's properties (except Ballys) price their rooms in $5 increments ($25, $35, $185, $1450) and nearly every other joint prices them with the standard "9" at the end? Neither did I. I'm sure that they have specific reasoning why they do this - either to protect their "Best Rate Guarantee" or they have enough data to prove their psychology of pricing gets us to perceive greater value and buy more of their stuff.



Comments & Discussion:

Finally, a use for math and statistics that I can actually enjoy! Very interesting.

If you don't mind staying at a non-casino property, I recommend the Desert Rose, which is next door to Hooters. Each suite (one- or two-bedroom) comes with a full kitchen (toaster, blender, coffee pot, full-sized range and refrigerator, plus cookware and utensils), so it's easy to save your scratch for the tables by loading the fridge with your own hooch and food. There's a Von's about a mile away on Trop. I've stayed here with several friends twice for four-day trips (first round of the NCAA b-ball tourney), and the cost per man is waaaaay less than any of the big properties. I don't mean to sound like a commercial, but not everyone who hits Vegas is a high-roller who can spend $300 a night for a room. Four of us stayed in a two-bedroom for four nights, and the cost was about $125 each for the entire stay.

Interesting analysis. I also like the fact that all four hotels are in the same general mid-Strip neighborhood. I assume the rate quoted for the Flamingo is for a standard room, not a "Go" room? Also, did any of the rates quoted include resort or dining credits? This seems to be an increasingly popular tool in a lot of the offers I see.

MGM has always said each hotel is expected to compete individually; your data seems to support that statement.

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