United States -  Las Vegas

The Las Vegas market is experiencing a period of economic growth and expansion, primarily led by tourism. The record for number of visitors to Las Vegas was broken for the third consecutive year in 2016 with 42.9 million visitors. McCarran International Airport has also recorded growth in traffic in recent years; the airport served 47.4 million passengers in 2016, slightly below the record set in 2007. Overall, Las Vegas is expected to experience continued growth that will provide increasing demand from local, national, and international sources. New attractions and developments, such as The Park, The Linq, and T-Mobile Arena, as well as the addition of professional sports (NHL’s Golden Knights and NFL Las Vegas Raiders), bode well for increased leisure visitation. Las Vegas is consistently ranked among the nation's top convention and meeting destinations. The Las Vegas Convention Center has re-ignited an expansion that will increase its meeting space and improve the building's overall design; the Riviera Hotel and Casino was imploded in 2016 to make room for the expansion. Furthermore, most casino-resorts feature their own public and meeting space. As of year-end 2016, meeting space at Las Vegas lodging properties spanned approximately 8.7 million square feet, which is in addition to the approximately 2.3 million square feet at the Las Vegas Convention Center and Cashman Center.

Occupancy remained at high levels in 2016. According to the Las Vegas Convention and Visitors Authority (LVCVA), citywide occupancy grew in 2016 to 89.1% from 87.7% in 2015; we note that STR data reflect occupancy growth as well, from 71.7% in 2015 to 72.4% in 2016, 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 90.5%, according to the LVCVA, with weekend demand for all hotels at 95.0%. Non-gaming operators also reported higher occupancy levels in 2016, and this trend is expected to continue in the near future. Both gaming and non-gaming operators reported growth in ADR during 2016, and this trend is anticipated to continue, as well; yield-management strategies that are taking advantage of the growth in occupancy levels to increase revenues will continue to be employed.

As of December 2016, Las Vegas room inventory was 149,339, according to the LVCVA (approximately 165,000 rooms, according to STR). Five new hotel projects (totaling 615 rooms), including a 51-room hotel building adjacent to an existing gaming property, were expected to open in 2017. Four additional hotels that are in various development stages are slated to open in 2018. Two casino-related projects, the Resorts World Las Vegas and Wynn Resorts Paradise Park, are new developments being considered but are not expected to open until 2019 or beyond.

Transaction activity in Las Vegas slowed in 2016 compared to 2015. The sales of two casino-hotels, the Aliante Casino Hotel & Spa and the Palms Casino Resort, at $380 million and $312.5 million, respectively, represent the two largest single-asset transactions during the year. The two largest single-asset transactions of non-gaming properties were the Hampton Inn Tropicana at $28.9 million, or $86,752 per room, and the Rumor Las Vegas at $18.0 million, or $120,000 per room. On a per-room basis, the Element Las Vegas represented the largest single-asset sale of a non-gaming property, at $139,024 per room.

* 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
2006 76.55
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 (f) 87.76
2018 (f) 93.07
2019 (f) 97.29

For more information, please contact:

Shannon Okada
sokada@hvs.com
  • +1 702 280-1405 (w)