The hotel room rates of some Las Vegas resorts have started falling by nearly 60% for the Grand Prix weekend (November 16th-18th) as compared to the rates that were posted last fall. However, the rates do not determine if the interest in the event is going down, according to an industry expert.
When the bookings were first announced in November 2022, the hotel room rates for the race weekend and listed prices were the highest in the city’s history. While they remain higher than normal rates, current prices are somewhat down from last year.
Las Vegas Review Journal cited Dr. Mehmet Erdem, professor of hotel operations and technology at UNLV’s William F. Harrah College of Hospitality, who said that when a drop in booking pace occurs, it automatically triggers revenue management systems to suggest the lowering of room rates.
Erdem told the publication that while the whole process is data-driven and almost on autopilot, it is the revenue managers who ultimately play a role in the lowering of room rates.
He further noted that the decision-making process regarding hotel room rates for an event that is set to make its debut is a bit more complicated than an event with an existing history such as New Year’s Eve or the National Finals Rodeo.
He added: “It is not unusual to be overly optimistic about the optimal room rates for such first-time events, especially when comparative predictive analytics data is limited.”
The Linq Hotel and Casino, Las Vegas
Review-Journal compared room rates (taxes and fees included) tracked from the launch on November 2nd, 2022, to September 14th, 2023, of a four-day stay (November 16th-19th) at four Caesars hotels. The price differences in the hotels were as follows:
When combined, the four properties saw a price decrease of 48%.
The inaugural Las Vegas Grand Prix is set to take place from November 16th to 18th and is estimated to attract over a hundred thousand fans. Several F1-controlled fan grandstands and hospitality spaces are said to be constructed at various points along the 3.8-mile circuit. The track spans portions of Las Vegas Boulevard, Koval Lane, and Sands and Harmon avenues.
As per the report, tickets to the race have not been sold out yet. However, the ticketing website Ticketmaster does not show many available tickets in grandstands. Tickets are also noted to still be available in the higher-priced hospitality and suite areas, but those do not allow seat-by-seat availability viewing like grandstand areas do.
Las Vegas Grand Prix officials say that, despite the room rate decrease, ticket demand has been and continues to be strong.
“The Las Vegas Grand Prix is energized by the excitement and anticipation that is shared by all as we get closer to November,” a Las Vegas Grand Prix spokesperson told Review-Journal. “We anticipate a full crowd, and we’re excited to introduce one of the most exciting sporting events in the world to the fans of Formula 1 and beyond.”
Tourism, governmental, and race officials have predicted the weekend will have an economic impact of $1 billion. Despite the room rate falling, Erdem said that does not mean that the economic impact still will not occur.
“It will be premature to declare that the anticipated economic impact (i.e., that it will be much higher than the Super Bowl) will not be happening due to a drop in room rates,” Erdem said.