For a comprehensive review of the United States market, click below:
HVS In-Depth United States Hotel Valuation Index:
The Southern Nevada economy remains largely dependent on the leisure and hospitality industry. Las Vegas is a world-class destination with significant depth and breadth, welcoming over 42.1 million visitors in 2018, a slight decline from 42.2 million in 2017. The market area is well served by McCarran International Airport, which has recorded notable growth in passenger traffic in recent years. Anticipated future growth and planned developments, such as the expansion and renovation of the Las Vegas Convention Center, construction of the NFL stadium, and the opening of the MSG Sphere Las Vegas, bode well for increased visitation. Overall, Las Vegas is expected to continue benefitting from high visitation from local, national, and international sources due to its appeal to multiple generations.
Occupancy remained at high levels in 2018. According to the Las Vegas Convention and Visitors Authority (LVCVA), citywide occupancy in 2018 was 88.2%, declining slightly from 88.7% in 2017; we note that STR data reflects a decline in occupancy, as well, from 72.1% in 2017 to 70.4% in 2018, but STR includes 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 89.5%, according to the LVCVA, with weekend demand for all hotels at 94.5%. The LVCVA reported growth in ADR of 1.2% during 2018, resulting in RevPAR growth of 0.7%. LVCVA’s 2018 Las Vegas Visitor Profile reported that 86% of visitors who spent the night in Las Vegas stayed in a hotel, which is a significant decline from the 94% registered in 2014. Added competition from alternative transient lodging, such as Airbnb, and higher expenses to stay on the Las Vegas Strip, including resort fees and parking, are pushing visitors to seek cheaper alternatives and putting operators in the position of lowering room rates in order to maximize total property revenues.
As of December 2018, Las Vegas' room inventory was 147,238, according to the LVCVA (approximately 166,600 rooms, according to STR). Seven new non-gaming hotel projects (totaling 933 rooms) were expected to open in 2019. Three additional non-gaming hotels totaling 656 rooms, which are in various development stages, are slated to open in 2020. Three major casino-hotel projects, the Circa Resort & Casino (777 rooms), Resorts World Las Vegas (3,400 rooms), and The Drew Las Vegas (3,780 rooms), are new developments that are scheduled to add new guestroom inventory to the market in 2020, 2021, and 2022, respectively.
Transaction activity in Las Vegas slowed in 2018. The Westin Las Vegas Hotel & Spa and the Renaissance Las Vegas, at $213 million and $178 million, respectively, represent the two largest single-asset transactions in 2018. These two non-gaming properties are located near the Las Vegas Strip. The 826-room Westin Las Vegas Hotel & Spa was purchased for $247,264 per room, while the 548-room Renaissance Las Vegas was purchased for $324,673 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.
The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide.
Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the
hospitality investment market.
In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely
insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related
restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.
Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with
an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide
insights on the likely trajectory of decline and recovery for hotel values.
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ADR, Demand, Occupancy, RevPAR, and Supply Projections:
|Market Demand Change
|Hotel Occupancy Increase/Decrease
|Market Supply Growth