UNLV Economist: Resort Fees Are Hurting Las Vegas

UNLV’s Professor Stephen Miller, who runs their Center for Business and Economic Research, finds that resort and parking fees are driving Southern California visitors from Las Vegas.

There are actually some very basic propositions here, each one of which is completely obvious.

  • Higher prices reduce quantity demanded of Vegas vacation travel or nearly everything else (there are very few Veblen goods)

  • Small price increases matter most where they’re a larger proportion of total cost

  • Travel costs from nearby Southern California are lower so the increases will disproportionately influence whether those consumers come to Las Vegas or not.

  • And higher costs, including parking fees, fall disproportionately on travelers coming from a short distance away (who may drive)

There are “500 fewer automobiles crossing the border” between California and Nevada daily, with I-15 freeway traffic down 1.1% over the last 10 months.

While visits to Las Vegas are up 0.5% (so essentially flat) so far in 2019, they would be higher without these increased costs. Resort fees have recently topped $50 a night at some properties and have been tagged as a detriment to resort casino businesses in the city. Some hotels are now stacking ‘venue fees’ on top of resort fees even.

With 12,000 rooms coming online in Las Vegas over the next 5 years the hotel industry there faces a dilemma. Higher prices drive people away and make it harder to fill rooms especially at non-peak times. Resort fees serve as a price floor, preventing hotels from discounting enough to keep rooms full. Las Vegas is a city where ancillary revenue usually exceeds room rates, so keeping rooms full is crucial at almost any price.

Several states attorneys general are currently investigating fraudulent resort fee practices by hotel chains, and booking sites like Expedia are even frowning on the practice.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. We quit driving from Utah to Vegas some time ago, the resort fees and parking costs are not making us want to return any time soon. The 1990s were fantastic to visit Vegas, free self parking was a must, even back then.

  2. Yeah screw Las Vegas and their ridiculous fee. I was looking at rate for rooms in the strip and the fee per day came out to be as much as the room rate. It’s insane, i guess the only way to avoid that crap is either be a high roller and get the room comp or redeem it.

  3. It’s an absolutely baffling move, really.
    – If I’m really into gambling, I’m going to be more likely to go to Casinos closer to me.
    – If I want to just enjoy myself at an adult-friendly playground, there are an increasing number of alternative options.

    And If I have to fly anyways, then Vegas doesn’t have any draw. It’s blisteringly hot in the summer with no shade and charges for everything. And as soon as I look at all-in costs, I can have more adult-friendly fun for less cash and in more comfort by going to an all-inclusive in DR, Mexico, or Jamaica.

    Vegas is betting big on the LA weekend crowd at the expense of pretty much everyone else.

    Good luck with that.

  4. I’m very prepared to believe that resort fees are hurting business, but contra the headline, a UNLV professor did NOT state that “Resort Fees Are Hurting Las Vegas”

    Nor did UNLV Professor Stephen Miller “find” that resort and parking fees are driving Southern California visitors from Las Vegas.

    The article Gary cites is an article ABOUT another article. If you click all the way through to the actual article that started this game of telephone, you find the economist speculating on why airport business is up but casino visits are down.

    From the article:

    Part of the reason is a decline in visitors driving from California to Las Vegas, Miller said. Numbers from the Las Vegas Convention & Visitors Authority show traffic on the I-15 is down 1.1 percent through October at the California border. It was down 3.7 percent in October alone.

    “That has got to be the answer,” Miller said for the softness. “The question is whether that is parking fees and resort fees. That may play into it but whether it’s big enough to keep the visitor volume soft, I don’t know.”

    So the only definitive thing the professor said is that fewer visitors from Southern California are driving to Las Vegas. (“That has got to be the answer.”)

    From the underlying article it is clear that the professor has not studied the impact of resort fees at all, so he couldn’t have “found” anything. And in case there is any doubt on the issue, he specifically goes on to say “I don’t know” if resort and parking fees are to blame.

    So the actual headline for this post is wishful thinking, and the better headline would be:

    UNLV Professor: “Resort Fees Might Be Hurting Las Vegas But I Don’t Know”

  5. Scrolling through this article I see a Luxor ad offering rooms as low as $39. You’re almost paying that much in resort fees. More people have finally caught on.

  6. I used to visit Vegas annually, but now visit every few years. Value has largely evaporated, which takes a lot of the fun out of a visit there.

  7. Parking fees make sense. Garages are very expensive to build, and only a portion of customers use it. It makes sense to charge those people only. If you dont want to pay it, dont use it.

    Resort fees are a racket because theres no “opting out” of “free phone calls” and whatever other bs amenity they claim it covers.

    I have zero plans on going to Vegas while those are mandatory.

    I’ve heard theyve also raised the prices and lowered the quality at the buffets.

  8. Vegas is gross, full of fat, crass, loud, smoking and drunk idiots. I’m more concerned about resort fees elsewhere.

  9. While not a huge gambler I visited LV at least yearly for years but around 2008 I stopped going. The economy was hit hard, but I could afford to go and my reward for going? Cab drivers trying to screw you, everyone having their hand out because the economy was poor, etc. Hey, I was visiting and helping the economy, don’t take out your poor financial situation on someone who was trying to help the economy.

    Now throw in the resort fees that have been added over the last decade and, except for one road trip where we were passing through the state, I haven’t gone back. There is a ton of competition to Vegas with casinos in many states, and many states starting to allow sports gambling. Take a friendlier and less in the face attitude and people will still visit, otherwise most can do without Vegas. It isn’t so unique anymore.

  10. In the late 1980s, Steve Wynn recognized that hotels did not have to give away rooms and meals to attract visitors. This has now been carried to extreme with many resorts featuring expensive rooms and dining prices that rival SF and LA. Of course there are only so many people who can afford these prices. All it will take is another 2008-style recession and you’ll see more casino bankruptcies and long unemployment lines.

    Resort fees are not unique to Vegas but they do provide Vegas with a way to promote heavily discounted off peak room rates which in reality are actually $40-50 higher per night. I’d bet black friday bargain rates of $100 a night snagged a few borderline customers (myself included) but it is not a sustainable business model as these fees will all be gone within a decade due to legal challenges.

  11. If you’re a video poker player, it’s very hard to find full pay machines in Vegas. Local casinos used to be the place where visitors could play and have a good chance of coming away a winner, but that is no longer the case. Downtown casinos are no better. The strip has become a strip mall with scammers, hustlers etc. I’ve had people tell they don’t feel safe walking on the strip at all. Hotels are no longer unique. Why visit?

  12. Long term damage. The younger generation will find less expensive alternatives to Vegas and sin city will wither away as the older folks die off.

  13. Haven’t been to LV since July 2018. We have no plans to retu6anytime soon either. My family & I used to go 3-4 times per year! The resort, fees & paying for parking are 2 of the big reasons why. We stayed 6 days & only moved our car once. The rest of the time we walked, took the Monorail or the bus. More money spent on resort fees & parking means less money spent everywhere else in LV…the strip properties included.

  14. Five years ago I wound visit Las Vegas 3 to 4 times a year which benefited businesses and casinos, now I’m going once a year and even then I feel the extra costs and (resort fees) adding up way too much taking the fun away from my vacation. Vegas vacations may soon be a thing of the past if this continues

  15. I usually do Vegas at least once a year. Our last 2 trips were disappointments with the experience. Prices of everything are sky high for no reason other than soaking the customer. I predict that Vegas casino business will go way down as the millennial generation does not have the income to gamble.

  16. Yep – We used to go to Vegas two or three times a year, for probably 10 or 15 years. We stopped, entirely, three years ago. There are just so many other better, closer, higher quality, less crowded, alternatives, we have no plans to return any time in the future. That said, they seem busy, so I guess charging for parking, rationing free drinks, assessing $50 resort fees is working for them….

  17. It’s not only the crooked resort fees and overblown parking charges, there are other drawbacks to visiting Vegas compared with resorts in Mexico or the West Indes. Unless you pay extra for a “club” room, every Vegas hotel seems to expect you to wait half an hour in a disorderly line of people trying to check in – compare that with the offshore resorts where you’re greeted on arrival, sat down and given a drink while they do the formalities.

    Worse, when you finally get your key in Vegas you’ll see the only way to get to your room is by walking through that most miserable scene: rows and rows of no-hopers pouring their hard-earned money into the slots.

  18. @JJJ says:
    December 5, 2019 at 1:37 pm
    Parking fees make sense. Garages are very expensive to build, and only a portion of customers use it.

    When Casinos depend on the people who will Drive to them 5 hours to spend money with them….

    Thats just BS – the cost is paid they barely maintain them… bad lighting poor quality…

    (MGM with Vacant slot lights an exception though absent the lights they are a mess of bad ramps and surfaces)

    Garages are already a “sunk cost” have you used a garage in LV? they are horrific…

    Poorly designed layer upon layer …

    Only reason I go to Vegas anymore is to eat and “earn” Amex points. Even that is dying given the politics of who, owns what.

    The complete rapacious nature of LV is one where you keep your Wallet close no matter your socioeconomic level use every benefit you can FHR, or Signature…

    For me to pay a “resort” fee equal to my room rate or 1/2 my room rate to have to sit in the sun and pay $28 for a simple Gin and Tonic is absurd.

    You want people to have money to steal from them at the casino… where they feel they are having “Fun”

    If they have to add 75% for Bullsh*t to their ADR the hotel is killing them by a 1,000 cuts.

    Small but ultimately painful. 25% is unavoidable taxes are taxes… though in many jurisdictions usurious (AKA a $19 rental car rate that is actually $62 after taxes and fees (Seattle)).

    Vegas is losing its mind selling off assets (See SANDS sale in PA) – which is why my Tribe passed on Las Vegas and Bought a Casino outside of the US.

    While Gary’s summation of the UNLV professor’s article may have not been entirely accurate (He does have bias) he is overall correct in the summation that “Resort Fees” are a disgusting blight on hotels tourism and are dishonest at their core.

    I complain consistently to my Attorney General in both the states I live in about the lack of transparency of “resort fees” as should you

  19. I used to visit Vegas 4 times a year. Always renting a car. I now visit once annually, and no longer rent a car because of parking. Value has largely evaporated, which takes a lot of the fun out of a visit there. I find places like LA and Tahoe just as interesting and better value

  20. Laughlin hotels started adding resort fees. I used to go there for a couple of nights every few months because of the cheap rates. No more, haven’t been there in over a year. Don’t even miss it.

  21. @JJJ So build the fees into the cost of the room. I can stay at the Marriott Grand Chateau with no resort fees and no parking fees and be closer to the strip than the Hard Rock

  22. As a frequent visitor to Las Vegas (who gets my rooms comped and doesn’t pay resort fees due to my program status and gambling level) I WELCOME the fact that fewer Californians are coming to Las Vegas. The crowds are still there and overall visitor volume, plus casino take, is at record levels so this is all good!

  23. I used to go to Vegas once a year from NYC, I haven’t been back in three years.
    Pay for parking

  24. I refuse to go to Vegas because of resort & parking fees. I used to go for fun, but I can gamble much closer to home.

  25. We stopped our yearly strip to Vegas due to resort fees and parking fees. Not that our absence will make a difference to Vegas but it makes a difference to us! We have switched to cruises. Something really needs to change in Vegas.

  26. I’m fine with the high prices for unique shows. The buffets are still a good value. Many of the garages are so old they’re long since paid for. Besides almost uniquely there is virtually no other parking. Resort fees are a scam everywhere. The government won’t sacrifice their campaign contributions to regulate anyone, anymore.

  27. Here’s one for the corporate readers. Rather than go to Vegas which is my fun preference, I’m renting a truck camper RV and will the beauty of Utah, Arizona, and California. My preference is boozing in Vegas but I refuse to get ripped off financially at every turn in Vegas. Resort fees. Outrageous hotel feels. Drink fees (yes Google it) and ….I saw this one this morning “mandatory stay charge”. Guess what Vegas? U R REPLACEABLE.

  28. Such a shame love the place and was a regular visitor from the UK but hiking up the prices just feel like we are getting screwed I’ve so Mexico and Caribbean it is.

  29. I’ve been a quasi native of Vegas since 1958. I was stunned to visit a strip hotel and be charged $15 for self parking. The strip sounds like a tourist “money pit” I wonder how long it will take before they close off the strip, cover it with a dome, and throw in a “$30 a ride” zip line

  30. Before retirement in 2004 I visited twice a year for conventions and always arrived a day or two early. Rental cars were dirt cheap, free parking at all the casinos, and no resort fees. I hadn’t been back for 14 years until a family trip last summer. My daughter had been recently, and quickly brought me up to speed. Luckily I found a hotel with free parking and no resort fees, but the car rental was no longer cheap.

    I did go back solo this year, but thanks to getting Caesars diamond status was exempt from resort fees at their property. For me the main attraction of LV is the vast variety of truly exceptional restaurants in close proximity.

  31. I don’t shop or have dinner on the strip because of the parking fees. I would have to pay an extra $15 on top of tax & tip. Would rent a room for fun if there were no resort fees.
    -Local Resident.

  32. If the goal was to keep locals from visiting the Strip or visiting their visitors on the Strip, then resort & parking fees did the trick.

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