United States -  Las Vegas

The Las Vegas/Clark County market is experiencing a period of economic growth and expansion, primarily led by tourism. The Southern Nevada economy remains largely dependent on the leisure and hospitality industry. The presence of two economic anchors and the emergence of more traditional commercial entities have further bolstered the overall strength of the area. Las Vegas is a world-class destination with significant depth and breadth. The market area is well served by McCarran International Airport, which has recorded growth in traffic in recent years. Anticipated future growth and planned development bode well for increased visitation. Overall, Las Vegas is expected to experience continued growth that will attract increasing demand from local, national, and international sources. Recent developments and planned demand generators and attractions, such as T-Mobile Arena, increased meeting space, and the development of the NFL stadium, should provide operators with an opportunity to benefit from the trend in visitor spending, which favors non-gaming amenities, such as restaurants, retail, and entertainment. Revenues from non-gaming sources for the Las Vegas Strip casino-hotels are now higher than revenues from gaming. The outlook for the market area is positive.

Occupancy remained at high levels in 2017. According to the Las Vegas Convention and Visitors Authority (LVCVA), citywide occupancy in 2017 was 88.7% declining slightly from 89.1% in 2016; we note that STR data reflect occupancy stability as well, increasing from 71.8% in 2016 to 72.1% in 2017, but STR includes approximately 10% more rooms than the LVCVA from outlying areas of Clark County and utilizes estimates. The highest occupancy levels were reported by the properties in the Las Vegas Strip area, at 90.0%, according to the LVCVA, with weekend demand for all hotels at 94.5%. Operators reported growth in ADR during 2017, and this trend is anticipated to continue as yield-management strategies that are taking advantage of the high occupancy levels to increase revenues will continue to be employed.

As of December 2016, Las Vegas room inventory was 146,993, according to the LVCVA (approximately 166,000 rooms, according to STR). Five new hotel projects (totaling 604 rooms) were expected to open in 2018. Six additional hotels that are in various development stages are slated to open in 2019. Three major casino-related projects, the Resorts World Las Vegas, Wynn Resorts Paradise Park, and the Drew, are new developments being considered but are not expected to open until 2020 or beyond.

Transaction activity in Las Vegas increased slightly in 2017 compared to 2016. The sales of two casino-hotels, the Harrah's Las Vegas Casino & Hotel and the partially-completed Fountainebleau Las Vegas, at $1.1 billion and $600 million, respectively, represent the two largest single-asset transactions during the year. The two largest single-asset transactions of non-gaming properties were the SpringHill Suites by Marriott Las Vegas at $50.5 million, or $169,030 per room, and the Rumor Las Vegas at $18.0 million, or $120,000 per room.  The SpringHill Suites by Marriott Las Vegas is located adjacent to future expansion space for the Las Vegas Convention Center and its  site includes a 0.65-acre pad that has approvals for a 500-room hotel.

* Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent “big picture” data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Change In Value For Market:

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Las Vegas RevPAR Change

Las Vegas RevPAR

Year RevPAR
2007 82.37
2008 75.58
2009 51.68
2010 51.21
2011 57.72
2012 58.34
2013 60.71
2014 68.99
2015 69.96
2016 81.98
2017 84.55
2018 (f) 89.67
2019 (f) 93.73
2020 (f) 96.54

For more information, please contact:

Shannon Okada
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