Tuesday, February 9, 2010

#CityCenter Fails To Move Needle

The LVCVA just issued the monthly data for December, closing the books on 2009 with the asterisk-al note that they don't have the gaming totals yet. But the visitation figures are all in for the month and year, and if you're a data geek you can download the summaries as well as those dating all the way back to 2002.

If not, let me tell you what you need to know. You can click this image to see this month's report:

Unfortunately, even what looks like good news isn't so good. December was the fourth consecutive month of increased visitation over the same month in the prior year, but it also was a weaker increase -- 1.5 percent -- versus 4.3 percent in September, 3.7 percent in October and 2.7 percent in November. Also, the total number of room nights occupied actually fell 0.4 percent in December versus December 2008 after three straight months of increases.

Conclusion: The opening of CityCenter in December did little, if anything, to boost visitation. That may explain free-falling room rates at ARIA, too. Ut-oh. The January figures will tell the tale because if all that publicity and fanfare can't pique even short-term interest, MGM Mirage is in a massive vat of stinky trouble.

Meanwhile, the 2009 figures show Vegas saw 3 percent fewer visitors, finishing up at 36.5 million. That the lowest since 2003, when the city greeted 35.5 million. The big difference, however, is that today's Vegas has 148,941 hotel rooms, about 8,000 of which were added in 2009, whereas back in 2003 the city offered 130,482 rooms. So the 2003 figure represented an occupancy rate of 85 percent and the 2009 figures mean occupancy was at 81.5 percent. The average room rate on 2003 was $82.48; last year, it was $92.93.

The Las Vegas Convention and Visitors Authority tried to put a happy spin on all this by noting that the 81.5 percent occupancy was "the highest of any major destination in the U.S." and 26.4 percentage points above the overall U.S. average. Which is like Florida getting excited that they grew more oranges than North Dakota this year.

I won't even get into the convention data. Much too depressing. Look at it for yourself if you like, preferably somewhere far away from a sharp knife.


Michael said...

While I'm sure MGM isn't thrilled with the rates for Aria, considering it's still in the Top 5 for rates per night in a city with companies giving away rooms, alls not lost for them.

AccessVegas.com said...

So many people are saying that Las Vegas is just too sensitive about the Obama remarks (both of last year, and the latest ones). However... even if Obama's remarks were responsible for only 5% of the nearly 25% convention attendance drop, that is too much. How many companies and groups planning their 2011 conventions will hear the latest Obama remarks and shy away from Las Vegas because it might not look appropriate?

I'm worried about CityCenter. My readers email a lot of feedback and trip reports to us. So far, NOTHING on CC. Ouch. Maybe just not enough of them have been to town since it opened.

Isn't it about time that someone takes a hard look at the effectiveness of the LVCVA? They love to take all the credit in the good times, when the reality is that Vegas is promoted through a wide variety of channels and by many, many different businesses.



Just did a Hotels.Com search and found the following have higher room rates than Aria for a randomly selected weekend in Feb:

Caesars Palace
The Hotel at Mandalay
Signature at MGM Grand

That's not top 5.

Michael said...

Yes, but if you are going to include Signature, Skylofts, and The Hotel, then you would need to included Mandarin Oriental and Vdara in there too for the reviews. Plus those aren't rack rates for the property either. Point is and you can nitpick all you want. The vast majority of rooms on the strip are going for $70 or below for weekends and weekdays. The high ends have taken a hit too, but Aria falls in the high end rather then the also rans.

Anonymous said...

I just returned from a stay at Aria. It's nice, modern and empty with a capitol E. Empty rooms, cafe's and a sparse crowd in the casino. I thought the place looked sterile from the photos I had seen, but I wanted to wait until I experienced it myself before drawing an opinion. The atmosphere is dark, gloomy and cold. I will take Wynncore or Caesars anyday. Heck even the Venetian and that's aying something.


Michael - I hear you, but this is supposed to be the hot new place in the heyday of its honeymoon. And it is clearly settling into the lower-upper tier. It's hard to imagine a scenario where a resort moves higher in the pack after it settles. Typically, it moves lower. I cannot think of a single resort that ever became a top-tier resort AFTER it opened. They either start out there or they don't.

atdnext said...

Mr. Steve-

I think Michael's just saying that it's unfair to compare Aria rates to Signature, Skylofts, and THE Hotel since they're just super-high-end annexes to their respective casinos (MGM for Signature & Skylofts, Mandalay for THE Hotel & Four Seasons) and not actual full casino resorts like Aria. However, the comparison to Wynncore, Venelazzo, Caesars, and Bellagio is VERY much appropriate. After all, MGM Mirage was expecting Aria to succeed Bellagio as its new "casino crown jewel", and to steal luxury travelers away from Wynncore, Venelazzo, and Caesars.

So yes, MGM Mirage is in a little trouble with Aria... But it isn't over yet. I remember Steve Wynn dropping Encore rates like crazy at this point last year (rack rates were as low as $119 per night at one point, below Palazzo and Bellagio) just to fill up the hotel and start building up a clientele. And now, it seems Wynn can get away with Encore rack rates at $169 per night (while still offering lower rates to Red Card members with special packages). IMHO we should at least give Aria a couple more months to see where it ultimately ends up on The Strip's leaderboard.

Michael said...

Good points Steve and atdnext, I definitely don't think CC is the home run MGM was hoping for/expecting. I've not been a big fan of the hype or direction that Murren and MGM put out on CC. I think they've got the market targeted wrong a bit, but that's a philosophical difference. I do think we'll see it settle into the top 5 at some point, but unlikely to take the number 1 spot. The one thing about CC that differentiates it a bit from the Wynn properties (LVS not so much) is that there are larger revenue streams available onsite at CC (only by factoring in the mall and more restaurants,not that Wynn is short on revenue drivers), so driving occupation would seem to me to be a higher priority for them then being #1 price on the block. It also doesn't help that MGM risks cannabilizing it's own business to fill it and the thousands of rooms they have on the strip.

Good discussion though as always.

Anonymous said...

Aria is the flagship of the 'New' Las Vegas. With the best Cirque production yet with 'Viva Elvis' I predict that hotel bookings will escalate over the coming months.