The first edition of the Formula One Las Vegas Grand Prix on Nov. 18 had its bumps in the road leading up to the event, but the economic and hotel performance results show the gamble on Vegas paid off as it crossed the finish line.
According to CoStar data, hotel revenue in Las Vegas was estimated at $220 million from Wednesday through Sunday during the week of the event. Las Vegas Grand Prix CEO Renee Wilm said the event raked in $1.2 billion in total economic impact.
Hotel average daily rates soared each day of the week, with the highest increase coming on Thursday at a 207% year-over-year increase. ADR was at its highest from Thursday through Saturday, reaching $629 per night. Average daily rate increased by $360, a 134% year-over-year increase.
“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,” Emmy Hise, senior director of hospitality analytics for CoStar, reports.
Las Vegas was host to the third F1 event in the U.S. in 2023. Miami hosted the Miami Grand Prix in May and Austin, Texas, welcomed the United States Grand Prix in October.
With the F1 Las Vegas Grand Prix taking place on Saturday rather than Sunday like the other two U.S. Grand Prix events, Las Vegas’ hotel performance picked up earlier in the week. Performance rose in Las Vegas starting on the Wednesday leading up to the race, whereas it ramped up on Thursday for the other cities.
Hotel occupancy and revenue per available room slumped in Austin this year compared to previous years, which can be partially attributed to the glitz and glamour of the first Las Vegas race in F1 history, said Gilbert Arredondo, senior vice president of revenue strategy for Remington Hospitality.
“I think people kind of forgot about the Austin race with the Vegas race [going on]. We actually felt that,” he said. “Because these events are so infrequent, Austin used to have phenomenal demand for the Formula One 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.”
Construction Woes
Hotels on the Strip performed well due to the proximity of the event, but those outside of it faced a significant roadblock: construction.
ADR for hotels in the submarkets outside of the Las Vegas Strip rose at a much lower rate than on the Strip the week of the event. On Saturday, the day of the event, those markets posted a 6% year-over-year decrease in ADR. Occupancies were down each day of the week, with 15%, 24% and 22% drop-offs from Thursday through Saturday.
Angela Gardner, corporate sales executive at Twenty Four Seven Hotels, said her Fairfield Inn Las Vegas Convention Center property was initially sold out leading into the week of the event. As construction of the track finalized, however, a last-minute axing of the grandstand closest to the Fairfield Inn led to a significant amount of room cancellations.
“It was the first event, and we understand it’s their first year in Vegas and things are obviously going to happen as they build up that track,” she said. “Unfortunately, we both lost on that one.”
Getting an Uber from the Strip to a location outside of it was “near impossible,” Gardner said.
“We did find that as we got closer to the event, it was a little softer for everybody in the market, especially if you were off the Strip,” she said. “We saw not only us, but some additional competing hotels were also starting to drop a bit leading into the event, probably I’d say a month out from the event.”
Gardner said the city learned a lot about how the construction affected transportation this year, and she hopes the necessary adjustments will be made moving forward.
"Transportation as a city — I'm sure they are reevaluating and analyzing how everything went strategically this year and hopefully transport and obviously the construction of the circuit will be fixed for next year's events."
Poor construction planning hurt businesses outside of the Strip and left a bit of a blemish on its debut, but in its totality, the first installment of the F1 Las Vegas Grand Prix was a success for the city, Gardner said.
“If you live in the city, I think the construction of the event was a frustration for them, but I think overall … the energy in the two weeks leading into it all around was pretty positive,” she said. “Overall, it was a good energy and a welcomed event for the Vegas area.”