Higher transportation costs appear to be squeezing Las Vegas hotels’ pricing power. Yet convention business has helped offset weaker leisure demand in some months
MGM Resorts reported weak summer performance on the Las Vegas Strip, where rising airfares and gasoline prices led to less demand for rooms.
MGM Resorts controls 40% of the Las Vegas Strip's hotel rooms, and visitation softened in late summer. Executives said expensive flights and gasoline ate into room rates, with the damage deepening each month of the third quarter before easing in October.
"We're going to need relief on fuel, gas, and airline pricing," said CEO Bill Hornbuckle on a Wednesday earnings call.
Jonathan Halkyard, chief financial officer, laid out the sliding performance: July room rates were roughly flat with a year earlier.
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Tags: airfares, earnings, las vegas, mgm resorts, price sensitivity, skift intelligence, tourism, wanderlust