Following a year in which visitation to Las Vegas hit a four-year low, several resorts in the casino mecca have begun scaling back the fees they charge guests.
The number of visitors traveling to Las Vegas fell from 42.9 million in 2016 to 42.1 million in 2018, while competing convention destinations like Chicago, New York, San Francisco and Orlando, Fla., saw visitation increases.
Hotels in those cities also charge resort fees, which local experts point to in citing the lack of hard data linking the visitor slump to the fees, which many casinos charge overnight guests for amenities such as Wi-Fi, pools and fitness centers regardless of whether they use them.
A spokeswoman for the Las Vegas Convention and Visitors Authority told the Las Vegas Review-Journal it would be “premature” to infer a connection. Instead, the authority attributes part of the visitation decline to inevitable shifts in the convention calendar.
Others point to the fact that 2018 saw fewer major events like boxing matches. International visitation also might be affected by the declining value of foreign currencies—which makes trips to the United States more expensive—as well as tougher visa requirements.
Competition from other states in recent years could also be a factor, namely on the populous East Coast, while tribal casinos in Southern California, Las Vegas’ largest feeder market, have been expanding and upgrading their properties. Also, a growing list of states are offering legal sports betting, a market in which Nevada used to hold a monopoly.
Nonetheless, the fees are a frequent topic on social media, a reality which the big hotels cannot have failed to notice.
Last July, Wynn Las Vegas stopped charging parking fees for overnight guests and day visitors who spend at least $50 at the property, saying the fees were “counter to the personalized service we provide”. The Cosmopolitan of Las Vegas canceled parking fees for overnight guests at the start of this year “as an added value”. SLS Las Vegas, Golden Nugget and Red Rock Resort have launched marketing campaigns recently promoting rooms without fees.
“We are always trying new offerings to see what resonates with clients, and this is just another tool in our arsenal,” an SLS spokesman said.
Strip giants Caesars Entertainment and MGM Resorts International say they won’t be following suit. However, they’re not contemplating raising their fees either.
Addressing the issue with Wall Street analysts last month, Caesars CEO Mark Frissora said, “We are certainly sensitive to the fact that we can hurt our own profitability and revenue growth if we get exorbitant or do things that have no value to them.”
Analysts like Brian McGill of Telsey Advisory Group are less sanguine. According to the Review-Journal, he has been warning since last summer that fees were impacting visitors’ perception of Las Vegas as an affordable destination.
“Our concern is not so much with the gambling crowd, but on the more casual visitor to Las Vegas,” he said in a November client report.
“Visitation to Las Vegas has been in decline now for almost two years during a very strong economic time,” McGill said in the report. “This is due to Las Vegas pricing itself out of being an affordable destination.”
