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Hotel Business Absolutely Booming in Las Vegas;
Selling Nearly 113,000 Rooms Daily
 Through April 2004

By Chris Jones, Las Vegas Review-Journal
Knight Ridder/Tribune Business News

July 4, 2004 - It doesn't take more than a brief weekend drive near the Strip to demonstrate a fact many travel experts have repeated ad nauseam in recent months: Las Vegas is busier than ever.

Frustratingly busy, some tourists say.

Wondrously busy, if you listen to hotel-casino accountants raking in cash by the barrel.

But busy nonetheless, no matter where your chips may lie.

Crowded taxi stands, congested airport checkpoints and multihour waits for dinner at hotel restaurants can only tell a portion of this year's local travel surge, however, for such experiences have often been associated with tourism in Southern Nevada.

To fully appreciate just how busy Las Vegas has been in early 2004, it helps to take a closer look at how its performance compares with those of other popular U.S. travel destinations. And so far this year, there really has been no comparison.

Through April, the most recent data available, Las Vegas hosted more than 12.5 million people this year. That was 7.5 percent better than the first four months of 2003 and more than 5.5 percent ahead of the pace set through April 2000, the same year Las Vegas went on to report its best-ever 12-month visitor count of 35.85 million.

Estimating the number of "heads in beds" is easier in places like Las Vegas or Hawaii, where relative isolation allows tourism officials to develop periodic visitor counts using simple data such as airport passenger volume, highway traffic counts or hotel occupancy numbers.

Such counts are harder to formulate in places such as Los Angeles, Chicago or New York, which also welcome thousands of visitors each day. But some simply pass through on their way to other destinations while others make day-trips from nearby suburbs and metropolitan areas via car or train.

That diversity makes so-called "apples to apples" comparisons difficult, particularly on a month-by-month basis, though most large tourism and trade show destinations have some way of measuring how those industries are performing locally.

Perhaps the clearest picture of the U.S. travel industry originates away from the hustle and bustle of big city life. Hendersonville, Tenn., a lakeside community about 20 miles north of Nashville, is home of Smith Travel Research, a firm widely considered the nation's top authority for measuring the domestic travel sector.

Smith Travel supplies data to nearly 120 major hotel chains and more than 175 convention and visitors bureaus and state or local travel associations. Through the first four months of this year, its information shows no city in its Top 25 U.S. hotel markets was within 10 percentage points of matching Las Vegas' year-to-date citywide occupancy rate of 89.5 percent.

Oahu, Hawaii, came closest at 78.7 percent occupancy, trailed closely by New York City's 75.3 percent and Orlando, Fla.'s, 73.4 percent.

However, Oahu offers only 36,000 guest rooms on the entire island, which means it must book only 28,300 rooms per day to meet its current occupancy rate. New York must book about 53,000 rooms a day to reach 75 percent occupancy, while Orlando needs to fill approximately 83,300 rooms per day to top 73 percent.

Las Vegas must sell nearly 113,000 rooms daily to reach its current 89-plus percent occupancy total, according to the Las Vegas Convention and Visitors Authority's latest room count.

Among the Top 25 markets tracked by Smith Travel (which does not include Las Vegas because the company does not monitor hotels attached to casinos), occupancy rates averaged just 64.3 percent through April.

While hotel stays have picked up across the United States, Smith Travel and convention authority data show no other market has enjoyed the recent success of Las Vegas, where a 9.3 percent gain in average daily room rates also exceeded the 3.3 percent national average gain.

Allen Kay, spokesman for the Washington-based Travel Industry Association of America, said his organization expects the travel sector to continue to gain momentum through the end of this year because of renewed strength in the U.S. economy. That bodes well for Las Vegas and other areas, he said.

"There are a lot of people who've put off vacations over the last couple of years," Kay said. "People are now saying, 'I'm going to take that trip.' "

Kay said Las Vegas is also benefiting from the return of many international travelers and an abundance of low-fare airlines. That's not to say other U.S. markets aren't thriving. Hotel operators in most states have enjoyed improved occupancy rates and revenue based largely on increased average daily room rates, according to Smith Travel, a trend a local college professor also attributes to renewed consumer confidence.

"This fear thing, I think, is going to fade out because no matter what, you still have to lead a life," said Billy Bai, an assistant professor of tourism and convention administration at the University of Nevada, Las Vegas.

The Orlando/Orange County (Fla.) Convention & Visitors Bureau does not release monthly visitor statistics and has yet to calculate is full-year 2003 visitor total, said spokeswoman Danielle Courtenay. But other factors such as room-night demand and airport traffic show double-digit increases in that city's visitor volume so far this year.

"Our resort tax collections have broken records in February and March ... without increasing the tax rate," Courtenay said.

Orlando last year reported more visitors than in 2000, widely considered the best year in U.S. travel history, but Courtenay said 2003's performance was padded by Florida residents who visited Orlando. This year, the city is on pace to balance those in-state gains with more travelers from elsewhere in the United States and overseas.

"Sixty-seven percent of our hotels are ahead of last year for advance summer bookings," Courtenay said. "We're on track for an exceptional year."

Orlando last year ranked as the nation's third-largest trade show destination behind Las Vegas and No. 2 Chicago. Bill Utter, vice president of marketing for the Chicago Convention and Tourism Bureau, said the Windy City has enjoyed double-digit percentage increases at four of the five largest shows held so far this year at its McCormick Place convention hall.

While overall citywide convention totals were unavailable, Utter said figures from those events, hotel occupancy rates and other data suggest Chicago's travel sector will also enjoy a stronger 2004.

"That's both good for Chicago and indicative that (U.S.) business travel is coming back," Utter said.

Convention activity was off compared with a year ago, but a recent surge in Japanese guests helped Hawaii to host 2.73 million visitors during the first five months of 2004, up 9 percent compared with the same period of 2003, according to that state's visitor board.

STATISTICS:

Average hotel occupancy rates:

--Las Vegas: 89.5 percent

--Oahu, Hawaii: 78.7 percent

--New York City 75.3 percent

--Orlando, Fla. 73.4 percent

--Top 25 U.S. cities excluding Las Vegas: 64.3 percent

Approximate number of rooms sold per day to meet those averages:

--Las Vegas: 113,000

--Oahu, Hawaii: 28,300

--New York City 53,000

--Orlando, Fla. 83,300

(Year-to-date through April)

Sources: Las Vegas Convention and Visitors Authority, Smith Travel Research

-----To see more of the Las Vegas Review-Journal, or to subscribe to the newspaper, go to http://www.lvrj.com.

(c) 2004, Las Vegas Review-Journal. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

 
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