The MGM Mirage one of the giants of the Las Vegas strip for hotels and casinos have applied this strategy of balancing finances and occupancy to create a happy medium and generate more revenue.
According to Jim Murren, CEO for the MGM Mirage, “The weekends are consistently solid now. Even when we don’t have a major event we are able to occupy rooms at a solid level.”
As of January the MGM Mirage’s hotels and casinos add an occupancy rate of roughly 70%. This number ranks high amongst other cities however is shocking in one of the United States largest tourist cities. Las Vegas is used to conducting business at 90% occupancy rate.
In the past few months Las Vegas hotels and casinos are once again hitting the 90% mark, some even reaching 95% in the month of March and 97% in the month of April. Hotel Casino operators can breathe a sigh of relief as these numbers matched last year’s quota.
Although the occupancy rate has returned to normal, room rates still have not reached their peak and are affecting the revenues of the major hotels and casinos on the Strip. Many factors have to be taken into account when dealing with percentages as some of the rooms are not occupied due to renovations are remodeling. These factors have dragged down the MGM Mirage’s room rate 30% from this time last year.
Other casino and hotel managers have refused to lower their rates during this downturn economy. Phil Ruffin, owner of the treasure Island Hotel and Casino will continue to raise his rates throughout the economy. As other hotels and casinos lower their rates in effort to make vacations more affordable to others who are also struggling with this economy, Ruffin declared that he would not lower his rates.
“I’m not going to give rooms away. That’s a heads-in-beds philosophy,” Ruffin said. “I don’t want the $50 customer.”
This philosophy appears to work for Ruffin as he averaged $130 on a weekday in late April at the hotel and casino hit at 99% occupancy rate.
