IRR-Las Vegas Mid-Year Viewpoint 2015 Local Market Report - Lodging
Mixed signals with declines or stagnation in Y/Y gaming revenues and visitation and REVPAR and mild to moderate increases in ADR and conventions and airline passenger traffic. Mostly positive figures YTD in 2015 suggesting strong growth metrics in the lodging sector. YTD growth in Visitor Volume down -0.3%, -2.0% decline in occupancy from prior year, 1.8% YTD increase in overall ADR, -0.5% YTD decrease in REVPAR, Convention attendance up 2.1% YTD, and 7.7% increase in taxable retail sales. The 0.5% increase in gaming revenue underscores the fact that the Las Vegas recovery has been more driven by visitor spending other than gaming.
Tourist dollars are being re-allocated towards dining, entertainment, and shopping options. Gaming revenue has lagged since the recession and reflects the transition of more visitation with lesser levels of spending per visitor than that witnessed prior to the recession. Asian gaming giant Genting recently broke ground on a $4 billion resort with a 3,000 room initial phase. This is a strong positive indicator for properties, timeshares, and hotel/condo developments along the north Strip.
This past year (2014) was also a year of significant but mixed supply removals as well as additions - primarily in the aging downtown market but also with some Strip properties that needed renovation or redevelopment. The only supply documented by the Las Vegas Convention and Visitor's authority as being removed or closed in 2014 was the Clarion Hotel & Casino (formerly Debbie Reynolds hotel/casino). Significant additions include the resurrection of the old Sahara Hotel and Casino as the new SLS Hotel and Casino (1,613 rooms). The Linq Hotel & Casino (849 rooms) was brought back on-line from the former "Quad" Hotel & Casino (prior to that it was known as the "Imperial Palace"). The positive figures bolster the Strip Hotel Casinos most significantly - especially in the realm of food, beverage, entertainment, rooms, and retail sales. The neighborhood / locals hotel casinos are still in recovery mode as the local Las Vegas consumer continues to heal from the recession. Limited service facilities also continue to recover. The full service and limited service sectors are near balance / full recovery but some ground was lost in the past year. However, the longer-term outlook continues to be positive with expectations of continued positive news for the Strip coming out of late stages of recovery and transitioning into the beginning of an expansionary phase. The outlook for the locals & neighborhood hotel/casino market and the limited service lodging product category is for continued mid-stage recovery.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.