Hotels generally have been seeing low occupancy, with declines in business travel and also leisure travel which tends to be discretionary. This is great for those who are continuing to travel, there are some real bargains out there.

This also should mean less pressure to raise redemption rates at hotel chains (and yet Hilton has increased the number of points required on the outstanding value AXON awards, 4 nights in a category 6 Hhonors property has gone from 125,000 to 145,000 with no notice).

And it should mean more inventory available on opaque channels like Priceline, and at lower price points. 2002, here we come!

One of the most hrad hit of markets is Las Vegas, with conventions being among the most economically-sensitive segment of the business travel market and where leisure stays dry up quickly. Couple that with being the city with the most hotel rooms in the United States and a spurt of recent growth and you have a real ailing hotel town.

The casino hotel strategy has been to massively discount rooms, going as low as necessary to get occupancy rates up, since these properties tend to extract significant ancillary revenue from hotel guests entirely apart from room rate. While these hotels do want to use room rate to some extent to differentiate their patrons as ones likely to drop more in gambling, room service, and other expenditures, you do see even the top properties on the strip like the Wynn and Venetian dropping price — it’s not uncommon to see rates at half the level they were a year ago.

This has created an interesting conundrum for the alternative Vegas properties, ones that are ‘off-strip’ and which make their business as a traditional hotel rather than casino. There are several a block off Las Vegas Boulevard, some near the convention center, and they don’t make their money on gambling with rooms as a loss leader. For them it doesn’t make sense to price themselves close to zero to fill up their rooms and extract non-room revenue. So it’s seems as though these properties had been holding price a bit better over the last few months. Presumably as properties like the Wynn become available in the $150-range, that draws significant traffic away from off-strip, less luxurious options. So occupancy rates likely suffer at these properties the most.

Thus it was interesting to me to see Marriott begin their discounting, even in a bit of a targeted way. Take for instance the Marriott Suites hotel by the Convention Center. It’s a block off Las Vegas Boulevard behind the Wynn. They’re still offering their usual rates, which I frequently see in the $160 – $180 range, but they’re also making rates of 1/3rd off available, promoted through select channels. Here’s the offer page, and it’s a deal for every 3rd night free. Some test booking show that this package really does pull up the otherwise-lowest rate when the offer is available, and with 3rd (and 6th, and 9th) available free that brings down the cost significantly.

I recognize the conundrum that properties like this are in, and they really are forced to discount, $100 a night on a 3- or 6-night stay is a pretty good deal here and may fit the bill for someone looking to be off-strip on a more business-oriented stay. Plus the suites, while smallish, are nicely configured.

I admit, I tend towards a bit more of the flash, but traffic on Las Vegas Boulevard can be a bit much even with the downturn, waiting at a cab or valet stand at the big hotels may be an inefficient use of time, and there’s a real role for these properties to play in Vegas. Still, I’d probably take the Wynn )or for my absolute druthers, at the opposite end of the strip, the Four Seasons), though a Marriott elite looking to requalify could easily feel differently…