Despite Early Struggles, Vegas Grand Prix Hotel Room Revenue Nears $220 Million

Despite the mixed reviews of the inaugural Formula 1 Las Vegas Grand Prix and its success, hotels on the Las Vegas Strip performed well during the inaugural Formula 1 Las Vegas Grand Prix.

Unlike the Formula 1 races in Austin and Miami, hotel performance in Las Vegas began to improve on Wednesday night, suggesting that event-goers were staying longer to enjoy what Las Vegas has to offer. Since this was their first time in Las Vegas, people were also interested in what the Formula 1 car would look like while racing on the Strip.

Competitors may have arrived on Wednesday to ensure they are in an ideal position to see the cars for the first time in the Las Vegas area during Thursday night's testing. This may also have been the reason for this disastrous defeat, as track problems caused practice sessions to be canceled. However, hotel analytics firm CoStar STR estimates Wednesday-Sunday hotel revenue was closer to $220 million, based on confirmed hotel performance and simulated performance for hotels that were not reported In the weeks leading up to the event.

There were headlines about hotels cutting their rates. However, the average daily room rate at Las Vegas Strip hotels increased significantly from Monday to Sunday, the week of the event. Hotel room rates and occupancy rates are highest on Thursday through Saturday nights.

During this period, the daily clearance price was $629, an increase of $360, or 134%, from the previous year. The average hotel room rate peaked Saturday at $655, but the biggest year-over-year increase came Thursday, up 207 percent, or $390.

Rates for luxury hotels, which account for more than 40 percent of hotel rooms on the Las Vegas Strip, were $952 and $962 on Friday and Saturday nights, respectively, up more than $500 year over year past. 

The hotel occupancy rate during the period from Thursday to Saturday reached 89.4%, compared to 92.5% last year. This is not unusual, as some large events prevent visitors from avoiding crowds. Occupancy rates were slightly different, with rates exceeding 90% on Friday and Saturday, equivalent to about 95,000 hotel rooms occupied each month. one night.

The Las Vegas Grand Prix is ​​expected to be held annually until 2032, spurring capital investment in the region.