Much like the rest of America, the Thanksgiving holiday seemed to slow down Las Vegas during the second running of the Formula 1 Las Vegas Grand Prix — a reality that is seemingly reflected in hotel performance.
The 2023 debut of the event was viewed as a milestone event for both the sport and the market. The latest data from CoStar's hospitality analytics platform STR shows the market enjoyed a significant boost from the 2024 race, but it did not accelerate performance in the way the 2023 event did.
"Hotels were unable to garner the high rates achieved for the inaugural F1 race last year," said Emmy Hise, CoStar senior director of hospitality analytics. "Similar to other F1 host cities like Miami and Austin, the initial allure fades after the first race. Last year, [average daily rate] was above $500 on Friday and Saturday of the race weekend. This year, it didn't exceed $325. Demand for the event was relatively in line, with Saturday occupancy exceeding 80% in 2023 and 2024."
The days leading up to the Nov. 23 race saw significant increases in both rates and revenue per available room, but drops in occupancy.
Much like 2023, the day that saw the biggest rate boost was the Thursday ahead of the event — Nov. 21 — when average daily rate jumped 88.2% year over year across the market to $264.42 and 101.4% just on the famed Las Vegas Strip to $308.74. For comparison, rates on Thursday Nov. 16, 2023, were up 207% across all of Las Vegas.
There are similarities in performance between the two years. Hotel performance started ramping up on Thursday, and the peak performance night was Saturday. In 2023, the ramp-up was stronger, with higher occupancy and ADR on Thursday compared to this year.
"There are similarities in performance between the two years," Hise said. "Hotel performance started ramping up on Thursday, and the peak performance night was Saturday. In 2023, the ramp-up was stronger, with higher occupancy and ADR on Thursday compared to this year."
And while revenue per available room was up in the two days leading into the event — and the day of the race itself — demand was actually down.
Occupancy in Las Vegas was down 8% on Thursday Nov. 21 to just 66.1%, and down 11% on Friday Nov. 22 to 75.2%. RevPAR for those respective days still hit year-over-year increases of 73.2% and 54.7%, respectively.
The day of the event itself saw a noticeable demand increase — up 7.8% year over year for Saturday, Nov. 23 — with a 81.3% increase in ADR and a 95.5% increase in RevPAR.
"Despite the year-over-year decline, hotel performance was boosted when compared to nonevent days," Hise said. "Comparisons are tough due to it being an election year. Excluding the week of voting, when corporate and event travel is generally muted, the November Saturday ADR did not exceed $230, meaning the F1 race generated $100-plus in ADR for the weekend."
Perhaps unsurprisingly, the performance drop-off for the day after the event was stark, with occupancy down 18.4% on Nov. 24 and RevPAR down 9.8% despite a 10.5% increase in ADR. U.S. Thanksgiving was on Thursday, Nov. 28.
Heading into the event, hotel companies were already sending signals that the 2024 version of the race was unlikely to keep pace with the first iteration.
MGM Resorts International Chief Financial Officer Jonathan Halkyard sought to contextualize the expected performance during the company's third-quarter earnings call in late October.
"We're also gearing up for year two of F1, which while not as large as last year's event, still brings significant economics to MGM during what has historically been one of the slowest weekends of the year," he said.
The trajectory of the hotel performance in Las Vegas around the race echoes what was seen in another U.S. market in 2023. Last year, Austin similarly saw a drop in growth compared to the year prior around F1's United States Grand Prix — with hoteliers at that point opining the Las Vegas event might have overshadowed Austin's.
“I think people kind of forgot about the Austin race with the Vegas race [going on]. We actually felt that,” Gilbert Arredondo, senior vice president of revenue strategy for Remington Hospitality, said at the time. “Because these events are so infrequent, Austin used to have phenomenal demand for the Formula 1 race. It’s not that it doesn’t have good demand still, but we did definitely see an impact of the Vegas race on Austin.”