In April this year, the iconic Tropicana Hotel closed its doors, and shortly afterwards we learned that The Mirage Hotel & Casino, with its iconic erupting volcano, will also be closed as of July 17. It is to be replaced by the new Hard Rock Hotel & Casino and a new guitar-shaped hotel will be added. However, these new hotels will not open their doors until May 2027.
Can we expect higher room rates?
A recent analysis by CBRE looked at just what the closure of the Tropicana and The Mirage will do to Las Vegas. In fact, the Las Vegas Strip will lose up to 4,511 rooms as a result of the move, which represents about 5 percent of what is available on the boulevard.
Last year alone, The Mirage had 1 million occupied rooms, bringing in nearly $596 million in revenue. That huge supply of rooms will now be in short supply on the Strip, which of course benefits all the surrounding hotels. As is the way of the economy, a lower supply of rooms will thus cause room-night rates to rise.
Since 2021, Las Vegas has added more than 7,000 rooms, thanks to resorts like the Fontainebleau Las Vegas and Resorts World Las Vegas. Even though room occupancy has not returned to pre-pandemic levels, hotels have been successful in increasing room rates. In the last three months alone, the overall average occupancy rate has been as high as 88.3%.
The analysis states that lower demand for rooms is not expected following the closure of The Mirage and Tropicana. This is because it is believed that MGM Resorts and Caesars Entertainment can easily accommodate most guests at their other mid-range hotels. However, there is a limit to the number of room nights they are able to provide, especially during peak events such as the WSOP, WPT and others.
The analysis further estimates that the distribution of one million rooms per year from The Mirage could significantly help other hotels on the Strip to increase their occupancy and increase average rates overall.
How many total rooms are on the Strip?
As of 2019, the total number of rooms available on the Las Vegas Strip has increased by 8.4%, peaking at a whopping 92,093 rooms. However, a smaller supply of rooms will also result in more revenue for all surrounding hotels. If you're planning a trip to Las Vegas in the next few months, you may be surprised by full hotels and high prices.
Source - gamblingnews.com, CBRE, businessinsider, travelnevada, usatoday
