On January 29, 2024, the Kansas City Chiefs and San Francisco 49ers secured their places in Super Bowl LVIII, set to take place at Allegiant Stadium, the home of the Las Vegas Raiders. With such a major event on the horizon, analysts are predicting record-breaking room rates for the Las Vegas Strip.
Barry Jonas, an analyst at Truist Securities, noted that the average room prices at Caesars Entertainment and MGM Resorts International properties are currently sitting at $800 per night. This is a significant increase from the $300 per night average in Phoenix during last year’s Super Bowl. Jonas also anticipates that room-rate compression could be substantial across both companies’ property portfolios, with most premium Strip rooms already sold out.
The benefits of the Super Bowl are expected to be more far-reaching compared to the Las Vegas Grand Prix, Formula One’s first visit to the city in 40 years. While the economic upside of the Grand Prix was mainly confined to high-end casino hotels, the Super Bowl could positively impact medium-tier properties as well.
Jonas believes that the Super Bowl could help offset some of the softness in room prices that occurred during the Consumer Electronics Show earlier in the month. Additionally, he suggests that MGM’s decision to increase resort fees at select properties could contribute to higher first-quarter earnings.
In terms of new developments on the Las Vegas Strip, Jonas noted that the debut of Fontainebleau Las Vegas has not had a negative impact on room prices at rival properties. In fact, rates at Fontainebleau are trending close to those at Bellagio and appear to be holding up better than Resorts World Las Vegas, the second-newest integrated resort on the Strip.
Overall, the upcoming Super Bowl is expected to have a significant impact on the Las Vegas hospitality industry, with potential benefits for both high-end and medium-tier properties. The event could also help mitigate any recent challenges faced by the market.