Hate Fees? Why Vegas Doesn’t Care

Hate Resort Fees? Las Vegas Executives Don’t Care.  

Resort Fees. The traveling public despises them, however, Las Vegas executives have embraced them with the sheer passion and vigor that can only be compared to newlyweds on a honeymoon.

Vegas regulars have been screaming from the rooftops that a tipping point is near and many vow that they’ll never return, opting for other, less expensive destinations. I’ll let you in on a little secret though – Vegas casino operators hear your threats and displeasure and frankly, they don’t care. They don’t care because the customers getting priced out by a $30-$50 a night fee aren’t big enough spenders to stress losing.  

They care so little and are so confident that visitors will continue streaming in that they ratchet up the nightly resort fee seemingly every few months. Caesars Entertainment and MGM Resorts just announced that they would again be raising their resort fees almost in lockstep with each other in early 2018. Awesome!

You’d choose this over Vegas becuse of a fee? I’m calling bullshit. There isn’t a casino in sight. Looks awful.

As casino operators don’t break resort fees out on their financial statements as its own line item, I figured I would try to estimate the revenue gathered from “providing” internet and a fitness center. Who the hell uses a fitness center in Vegas anyway? Nobody I want to know.

I figured Las Vegas Sands was a good candidate to dig into as they feature two Las Vegas properties (Palazzo and Venetian) with an identical resort fee making the math pretty straightforward.  

Venetian is gorgeous. Their resort fee is not however.

Venetian and Palazzo have a tad over 7,000 rooms combined, for our purposes, well just use 7,000.  If you multiply that 7,000 rooms by 365 nights in a year, you know that Las Vegas Sands could sell up to 2,555,000 room nights per year.  

In 2017, Las Vegas Sands Las Vegas operation reported a 91.7% hotel occupancy rate. It’s easy to determine then that in 2017 Venetian and Palazzo sold roughly 2,342,935 room nights (91.7% of the total 2,555,000 room nights available for sale). 

Applying the 2017 resort fee of $39 (it’s $45 now!) to those 2,342,935 nights means that Palazzo and Venetian would collect roughly $91,374,465 (or $105,432,075 if you use the new 2018 rate) per year in resort fees. Now, we’re aware that there are situations where resort fees are comped… but the numbers are pretty damn close, and that’s a lot of cash for nothing generated by 2 properties. Can you imagine what operators with a much larger footprint like MGM and Caesars are pulling in? 

The introduction of fees on everything begs the obvious question – When do tourists just stop coming to Las Vegas? When will Las Vegas become too expensive? Las Vegas Sands’ occupancy rate numbers over the years don’t suggest we’re there yet (Gathered from LVS Annual Reports). The graphs below demonstrate occupancy rates rising while the “average daily rate (ADR)” resorts charged for rooms also rising. Note: Resort Fees are not incorporated into the Average Daily Rate figure, however, they have been on the rise as well.

Palazzo and Venetians hotel rates have been rising…
But so does Occupancy – We keep buying.

The occupancy graph tells the story. Venetian and Palazzo aren’t losing room night sales due to rising room rates / resort fees and honestly, those staying home don’t matter. If you are scared off by a $100 – $150 fee over a 3 night stay, you aren’t a big enough spender to be missed. Not to mention, customers that gamble and are valuable to the casino aren’t paying resort fees anyway.  

The hotel lobby. The scene of the Resort Fee Crime.

This excerpt from the MGM Resorts 2017 annual report hits the nail on the head “During the year ended December 31, 2017, Las Vegas visitor volume decreased 2%, Las Vegas Strip REVPAR increased 2% and Las Vegas Strip gaming revenue increased by 1% compared to the prior year”. In lay terms, there may have been a few less visitors to Vegas as a whole, but we made more money per available room and saw an increase in gaming revenue. Sounds like resort fees are working quite nicely for them.

The positive results at MGM Resorts were confirmed in Caesars Entertainment’s 2017 annual report which boasted that they have “Increased rooms revenues of $19 million during 2017 resulting from an increase in resort fees and occupancy rates”.  Again, increase in fees, revenue AND occupancy rates.

Another key benefit to charging resort fees is that resorts don’t pay online travel agents (sites like Travelocity, Expedia, etc) commission on the resort fee as they would if it were part of the room rate.

From the Casino’s perspective, the resort fees are working. After all, money for nothing is a hell of a deal and cold hard cash means more to shareholders than our feelings.  

Without resort fees, you wouldn’t have amenities like this brilliant… chandelier? Anyway, its at Palazzo and it looks spendy.

I digress – Let’s chat through another fee visitors and locals detest.

I bet you also hate paying for parking in Vegas? Again, resort executives hear your cries of anger, but don’t care.

Paid parking in Las Vegas is a play, in part, to capitalize on convention traffic and patrons looking to park for events at T-Mobile Arena as well as the new Raiders Stadium behind Mandalay Bay which is expected to be Monorail Connected to the rest of the strip soon. 

According to the Las Vegas Convention and Visitors Authority, convention attendance in 2017 was up 5.3%, although overall visitation was down 1.7%. Many convention attendees rent cars and are reimbursed for parking (and resort fees) by their employers. Easy way to make a buck if you are a major casino operator.  

It is interesting to note though that in 2016, 59% of Las Vegas visitors got around town using a car – 43% of which using their own personal vehicle and 16% employing a rental. Could “pay for park” in Vegas be the magic elixir that pushes people away from driving and the Las Vegas Monorail to profitability 

The same theory holds true for parking fees. If you are going to be scared off by a $15 daily parking fee, you likely aren’t worth all that much to me as a casino.  

See also: Avoid paid parking by utilizing a casino loyalty program credit card. 

I feel the pain. I despise handing over my Visa for a resort fee while checking in for my Vegas vacation but I work it into my budget and consider it part of the room rate. I understand the need to charge more for rooms as millennials particularly aren’t gambling like previous generations, but I want the resorts to make it transparent. Add resort fees to the room RATE listed instead of making it a separate item.

As it stands, I still find Vegas to be a cheap destination and while I find the pricing strategy to be dishonest, I’ll still pony up for my Vegas fix.  

Little folks like us may not have a lot of pull or a fat bankroll, but we can keep the discussion going and vote with our wallets if we feel compelled. Make noise because the fees are running out of control and  because the practice of resort fees is plain dishonest.

If you feel fees have gone too far don’t give up on Vegas completely. Choose properties off the beaten path that don’t charge for these “amenities” and choose not to support this madness.

See Also:  Where can I still Park for free on the Las Vegas Strip? Here.

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9 thoughts on “Hate Fees? Why Vegas Doesn’t Care”

  1. Interesting article, not sure I agree with all of it.
    If the resort owners don’t care about the low rollers that balk at the resort fees why not list the actual full price? FWIW my wife and I were told by a host that when booking with Orbitz, et al, they get a percentage of the room rate, but not the resort fees. If this is true it would make sense because the resort fees keep going up but the room rates stay about the same.
    I don’t like it, just tell me the full price.

    1. Thanks for the comment!

      I would argue (and it is debatable) that resort fees are an “add on” fee and are a new revenue stream for casinos aimed at replacing declining gaming revenue. Its a nice perk they don’t have to pay commission to travel sites.

      Another huge benefit for the casino (in addition to avoidance of fees) is that resort fees don’t get waived for comped rooms for low – mid rollers.

      I think it is a very true statement though that Vegas doesn’t care about low rollers and how they feel about rising room rates/resort fees/parking fees. I don’t blame them.

      I do hope for more pricing transparency in the future though!

  2. Resort fee ,i understand this not. Ok but degrease than the room price .so that expedia etc, don,t get a part of the room price.

  3. I think Las Vegas was ran better with a lot less gouging being done before it became “legit”. Las Vegas was a better place when it was ran by the mob because then it was honest and there was not all of these fees in fine print. Now it’s ran by politicians and they claim the only way they can make money that doesn’t get cut by the politicians is by adding fees for absolutely no reason. And then there is the pay to park, anywhere else in the country if your staying at the hotel you park at the hotel free!! At least with the “mob” they knew how to treat the customer!!

  4. I was a high roller in Vegas for years. I come MUCH less often now. Even though my rooms are comped, the parking fees piss me off (and I hate what Vegas has become, where upscale clubs and restaurants are the big thing). Loved Vegas in the 70’s to 90’s.
    I do my gaming locally now for the most part. There’s a silent resistance out there….. It’ll bite Vegas in the ass.

  5. I’ve got no problem with any new bullshit fee being tacked on (even mandatory fees for resorts that arent real resorts and for services you arent even using). However, these costs need to be reflected within the total price you search for and when you pay for them online, not “surprise” fees you find about later that appear when you check out.

    These fees are making shopping around for the best priced rooms and total costs involved almost impossible. This is precisely what these hotels are doing and its screwing over the consumer. If they wanted more money they should have simply raised the price of the rooms. Its blatant price manipulation, anti-competitive and should be illegal.

    I love Vegas, but will never go back simply because of these fees.

    1. Hi there. My name is Michael Mendelsohn and I’m a producer for ABC’s World News Tonight. I’m working on a story about these resort fees and appreciate ur passion on the issue! Might u be avail to do a quick interview via Skype or FaceTime? Best to just call me: 347 348 2410.

  6. Should have nipped it in the bud! Now theyve even polluted Laughlin!

    Used to go to Laughin all the time. Now Never!

    Fees started at 1.99 night — now up to 15.00 night. for THIRD RATE

    PROPERTIES!

    what a scam.

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