Hotels on the Las Vegas Strip experienced robust performance during the inaugural Formula One Las Vegas Grand Prix, despite mixed views on the event's success.
Unlike Austin and Miami F1 races, Las Vegas hotel performance started picking up on Wednesday night, indicating visitors to this event had a longer stay to enjoy the attractions Las Vegas offers. Also, as it was the first time in Vegas, there was a lot of interest in what it would look and sound like when the F1 cars ran down the strip.
Attendees may have arrived on Wednesday to ensure they were ideally positioned for their first look at the cars on the Vegas strip for Thursday night's practice session. This could also be why it became such a debacle when the practice session had to be canceled due to issues with the track. Still, from Wednesday through Sunday, CoStar hospitality analytics firm STR estimates hotel revenue was nearly $220 million based on confirmed hotel performance and modeled hotel performance for non-reporting properties.
Headlines swirled about hotels slashing rates weeks before the event. However, hotel average daily rate on the Las Vegas Strip increased substantially Monday through Sunday the week of the event. The highest hotel rates and occupancy levels occurred from Thursday through Saturday night.
During that time, the ADR was $629 — a $360, or 134%, increase compared to last year. Hotels achieved the highest ADR Saturday at $655; however, the greatest rate gain compared to the previous year was on Thursday, increasing by 207%, or $390.
Luxury-class hotels, which make up more than 40% of the Las Vegas Strip's hotel room count, achieved rates of $952 and $962 on Friday and Saturday nights, respectively — a more-than-$500 increase compared to last year.
Hotel occupancy Thursday through Saturday was 89.4%, compared to 92.5% last year. This is not unusual, as some mega events deter visitors seeking to avoid the crowds. The occupancy change was minimal, and Friday and Saturday occupancy levels were above 90%, equating to approximately 95,000 occupied hotel rooms per night.
The Las Vegas Grand Prix is scheduled to occur annually through 2032, spurring capital investment in the area.