Super Bowl Room Rates Could Break Las Vegas Records
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Posted on: January 29, 2024, 12:37h.
Last updated on: January 29, 2024, 01:13h.
On Sunday, the Kansas City Chiefs and San Francisco 49ers clinched spots in Super Bowl LVIII. The big game could break records for room rates on the Las Vegas Strip, according to one analyst.
While acknowledging that comparisons between the 2023 Super Bowl in Phoenix and this year’s iteration of the game in Sin City are tough, Truist Securities analyst Barry Jonas pointed out in a new report that Las Vegas Strip hotel room prices are currently averaging $800 per night at Caesars Entertainment (NASDAQ: CZR) and MGM Resorts International (NYSE: MGM) properties compared with $300 per night in Phoenix a year ago.
The Super Bowl is shaping up to become a material event,” Jonas wrote. “Room-survey data suggests a significant average-daily-room rate uplift across properties for both MGM and Caesars over the Super Bowl weekend. Our survey suggests room-rate compression could be significant across most properties in both companies’ portfolios, with most premium Strip rooms long sold out on internet channels.”
MGM and Caesars are the two largest operators on the Strip. Super Bowl LVIII takes place on Sunday, February 11 at Allegiant Stadium, home of the Las Vegas Raiders.
Super Bowl Benefits Could Be More Widespread Compared to F1
November’s Las Vegas Grand Prix — Formula One’s (F1) first visit to Las Vegas in four decades — was a success, but at the operator level, economic upside was largely confined to high-end casino hotels. Those include MGM’s Aria, Bellagio, Cosmopolitan, Caesars Palace, and Wynn Las Vegas.
Specific to Caesars, most of that operator’s Strip properties, excluding Caesars Palace, are considered middle-of-the-road venues, meaning there wasn’t much benefit attributable to the F1 race. However, casino hotels such as Caesars’ Flamingo and Horseshoe and MGM’s Excalibur and Luxor could be positively affected by the Super Bowl.
“As during the F1 event, higher-end properties appear to be benefiting strongly, although unlike F1 where the benefits were primarily captured by the high-end, medium-tier properties are also commanding higher rates year over year for the Super Bowl,” added Jonas.
Jonas observed that the Super Bowl could offset some softness in March room prices due to the absence of the CON/AGG convention and some of the weakness on room prices seen earlier this month during the Consumer Electronics Show (CES).
Other Las Vegas Strip Hotel Notes
Jonas also pointed out that MGM’s recent decision to boost resort fees at Aria, Bellagio, Cosmopolitan, and Vdara, while burdensome to guests, could contribute to higher first-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) for the operator.
The analyst added that the debut of Fontainebleau Las Vegas isn’t hampering room prices at rival properties, and that the much-maligned venue is proving steadier than Resorts World Las Vegas, the second-newest Strip integrated resort.
“Fontainebleau rates are trending close to Bellagio’s and for now appear to be holding better than the Resorts World launch in June 2021, which had some early strength before falling materially,” concluded Jonas.
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