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Vegas Room Rate Hikes Slow Down

By Chuckmonster on Sunday, 12th June 2005 1:42am
  » filed under Las Vegas  comments: 0

   

The rapid growth in demand for rooms on the Strip came close to a shuddering stop in the first half of 2005, following the record increases of 2004 and in the wake of the Wynn Las Vegas opening, analysts said Tuesday.

The steady climb in rates for rooms booked three weeks or more in advance -- the most common demand-trend barometer for Las Vegas vacations -- decelerated steadily to 2 percent in the second quarter of 2005 from 44 percent in the second quarter of 2004, Bear Stearns data showed.

Bear Stearns analyst Joe Greff said the slowdown was born of the destination's own success, although some industry insiders speculated the drop could foreshadow a price war over the tough summer months.

Greff said it would be difficult under any circumstances for Las Vegas, or anywhere else, to match last year's room-price growth rates, which were well into double digits at most properties.

Investors realistically do not expect those growth rates to return in the second half of 2005, he said.



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