The inaugural Formula One (F1) Las Vegas Grand Prix is set for November 16-18, and interestingly enough, room rates on the Strip and around the city have fallen precipitously from when they were first posted last year; however, race officials and industry experts are contending that this does not indicate a drop in spectator interest.
When packages and rates were first posted last November, they represented the highest rates ever for the city. However, while most rates are still much higher than average, packages have dropped almost 50 percent in some cases, according to a recent report from the Las Vegas Review-Journal.
The newspaper offered four examples of room rates for four-day stays (including taxes and fees) at various properties that were tracked from November 22 of last year to September 14 of this year, which showed the following:
- Caesars Palace November 22 price: $5,323.02; September 14 price: $3,383.71; total decrease of 36 percent.
- Paris Las Vegas November 22 price: $3,497.60; September 14 price: $1,837.66; total decrease of 47 percent.
- The Linq November 22 price: $2,694.87; September 14 price: $1,395.54; total decrease of 48 percent.
- Planet Hollywood November 22 price: $4,336.61; September 14 price: $1,791.18; total decrease of 59 percent.
In response to the findings, UNLV hospitality professor Dr. Mehmet Erdem told the Review-Journal that most properties have revenue management systems in place that are automatically updated in accordance with drops in booking pace.
This process is largely automated and computer-based but can be adjusted manually by managers if need be, Erdem said. He also noted that the price-setting process for first-time events (such as the F1 race) are a bit more difficult to navigate given the lack of previous precedent.
“It is not unusual to be overly optimistic about the optimal room rates for such first-time events, especially when comparative predictive analytics data is limited,” he told the Review-Journal.
The race, which will take place on a 3.8-mile track that winds through sections of Las Vegas Boulevard and other close streets, will feature grandstands and spectator areas throughout the course.
According to the Review-Journal, general admission tickets have not yet sold out but the availability on sites such as Ticketmaster is said to be depleting fast.
In a statement to the newspaper, an F1 race spokesperson said that the company anticipates “a full crowd, and we’re excited to introduce one of the most exciting sporting events in the world to the fans of Formula 1 and beyond.”
Overall, the event is projected to generate over $1 billion in overall economic impact for the region, far more than any other singular sporting event, including the 2024 Super Bowl set for mid-February.
