New and existing Las Vegas hoteliers have added room inventory recently as state officials expanded capacity limits and February data showed signs that visitations have begun to slowly edge upward even as pandemic-related protocols remain in place.
The Virgin Hotels Las Vegas opened on March 25 at the off-Strip site where the former Hard Rock Hotel closed about 14 months ago, adding back 1,500 rooms, or “chambers” as the brand calls them, to the largest U.S. hotel market.
Meanwhile, MGM Resorts International, which had closed Mandalay Bay, Mirage and Park MGM properties for midweek reservations, went to a full reservation slate for those resorts on March 3. Caesars Entertainment, which closed Planet Hollywood and The Linq Hotel + Experience for midweek reservations, began accepting midweek reservations on March 15 and March 22, respectively.
The openings and expanded reservations coincided with Nevada Gov. Steve Sisolak’s order that, as of March 15, the state’s restaurants, bars, gaming floors, racetracks, gyms and arcades could expand their operations from 35% to 50% of capacity, while convention- and meeting-space allowances were expanded from 25% to 50% of facility capacity.
The openings also followed the debut of Circa Resort & Casino at the west end of downtown Las Vegas’s Fremont Street Experience. That new-build property, which was developed by local hotelier Derek Stevens, opened its gaming area in late October and premiered its 777-room tower in late December. On tap is the $4.3 billion Resorts World Las Vegas, which is slated to add three Hilton-branded hotels near the northern end of the Strip this summer.
“You feel like the buzz and the energy began to return a couple of weeks ago,” said MGM Resorts International Vice President of Administration John Flynn, whose company operates more than 36,000 rooms along the Strip. “You still have to abide by social-distancing rules, so you’re still constrained [for restaurants and bars], but for conventions and meeting spaces, that is a big needle-mover.”
The debuts also signal some momentum nine months after hoteliers were permitted by local authorities to reopen with extensive cleaning, operating and social-distancing protocols but subsequently scaled back operations in fall and winter because of lagging visitor demand. Last year, Las Vegas’s 19 million visitors marked a 55% drop from a year earlier, according to the Las Vegas Convention and Visitors Authority (LVCVA).
“Last fall, we talked about how a third of travelers would be ready to go when they opened the doors, a third wanted to travel but we’re waiting to hear from Dr. [Anthony] Fauci whether it’s safe, and a third would take a wait-and-see attitude,” said Jeremy Aguero, principal analyst with Las Vegas-based Applied Analysis. “That middle group is getting substantially larger and feeling more comfortable about their ability to travel.”
While current visitor numbers still lag substantially behind pre-pandemic numbers, that gap is closing, albeit slowly. Las Vegas attracted 1.54 million visitors in February, down 54% from a year ago, the LVCVA reported last week. That gap narrowed from January’s 63% year-over-year drop. Meanwhile hotel occupancy along the Las Vegas Strip rose to 42% in February from 31% in January, though that remains a far cry from the 88% occupancy rate in February 2020.
“When you take a look at the challenges in 2020, the destinations still found investments,” said Fletch Brunelle, vice president of marketing at the LVCVA. “Las Vegas is showing a lot of positive traction in terms of pent-up demand.”
As Las Vegas hoteliers prepare to ramp up properties, the number of local COVID-19 cases appear to be going down. As of April 5, the seven-day average for new daily cases per 100,000 residents in Clark County, Nevada, was 10, compared to 67 for Clark County at the beginning of the year, according to data compiled by the New York Times.
Large-scale events also appear poised to return to Las Vegas. This month, the Las Vegas Golden Knights NHL team began allowing attendance at 15% capacity at T-Mobile Arena, equivalent to 2,600 masked fans per game. The city’s annual World of Concrete convention — which typically takes place early in the year and attracted more than 60,000 attendees to its 2019 show — will return to the city on June 8. And the following month, Garth Brooks will play a sold-out show at the new Allegiant Stadium, where primary tenants the NFL’s Las Vegas Raiders will finally play in front of its new fans this fall.
Still, upcoming dates for many large-scale events, including shows like Cirque du Soleil’s “O,” still remain to be determined, while Brunelle said that World of Concrete’s rescheduling to a midyear month when construction tends to be busy will likely reduce that convention’s numbers from its typical attendance.
How quickly those events will fill the additional room inventory remains to be seen. Wynn Resorts’ Encore, which last October shut down operations at the 2,034-room resort for midweek reservations, hasn’t committed to seven-day-a-week schedule. More notably, Resorts World will add its 3,500 rooms to the Strip’s inventory this summer.
There’s also the issue of protocol as both local officials and hoteliers look to continue to minimize the risk of COVID-19 transmission within its casinos, restaurants, bars and hallways. That means that, in addition to featuring eateries such as its branded Commons Club, Nobu and Los Angeles-based Thai food offshoot Night + Market, Virgin Hotels Las Vegas has extensive protocols that include mandated masks for guests and workers, six feet of spacing between parties on its pool decks, temporary suspension of all buffet-style meals, and the elimination of paper menus — guests can read them via QR codes on their smartphones.
While Aguero said there may continue to be “some conflict” between guests who want to shed masks and hoteliers who continue to invoke coronavirus-related protocol for the foreseeable future, MGM Resorts’ Flynn said some of the investments will improve operations in the longer term.
“Mobile check-in, QR codes for menus, mobile food ordering from restaurants and entertainment venues, digital check-in, those will absolutely stay in play,” Flynn said, adding that MGM Resorts has invested in pumping in 100% of its resorts' air from the outside and recycling it as many as 12 times per hour. “Hand sanitizers? Those are things that will be around forever.”
As for the increase in room inventory just as the market is trying to dig itself out of its vacancy hole, Aguero, Brunelle and Flynn played down any concerns and said they thought the new resorts would help bring more curious travelers to the region.
“The older properties at the bottom end will be at somewhat increased risk,” said Aguero. “But that’s what Las Vegas does. We build hotel rooms better than anyone else. And when they’re done, we implode and we rebuild.”