Las Vegas Hotel Market Q3 2024: Pricing trends, booking patterns, and short-term rental growth

Las Vegas' hotel pricing premium over US continues to grow

Given Las Vegas’ heavy reliance on group and leisure demand, coming out of COVID, the US achieved a fleeting TTM price premium⁽¹⁾ over Las Vegas through September 2021. October 2021 was when the the data flipped, and Las Vegas began growing its price premium ahead of the overall country, a premium which as of TTM September 2024 was approximately 33.9%. Calendar year 2024 marked a time period when Las Vegas’ pricing premium over the US accelerated upwards– in March 2024, the TTM pricing premium, was at 24.9%, and over the ensuing 6 months, the pricing premium gained about 9 percentage points.

TTM pricing for the overall United States, conversely, continued along its steady downward slope. This downtrend began in May 2023, and it has persisted through Q3 2024. When comparing TTM pricing each month on a YOY basis, it is worth noting that the YOY declines were -2.3% or greater from March through June 2024, and most recently in August and September 2024, the YOY declines were each less than -1.8%.

Las Vegas sets the pace in the region for YOY price growth in Q3 2024

Las Vegas hotel pricing, along with the select major regional cities of Los Angeles, Phoenix and San Diego, all experienced positive YOY pricing growth in 3Q 2024. This was a marked turnaround for the major regional cities analyzed - in the first half 2024, all but San Diego and Las Vegas experienced YOY pricing declines compared to H1 2023 (and while San Diego’s H1 growth was indeed positive, it was only up 0.4% YOY). Moreover while Anaheim’s -0.1% YOY price growth in Q3 is technically negative, it is an improvement from the -1.5% YOY price decline from H1.

Starting in Summer 2024, Las Vegas hotel pricing kicked off an 18-week stretch of YOY pricing growth

Through the first half of 2024, while weekly hotel performance in H1 2024 mostly outperformed the equivalent weeks from 2023, there were indeed weeks where the 2023 week outperformed the 2024 equivalent (this was the case for 8 weeks, most of which occurred earlier on in the first half of the year). This was categorically not the case once summer hit - starting the week of June 3rd, there were 18 consecutive weeks when 2024 weekly pricing outperformed the 2023 equivalent week, several times in dramatic fashion, including 7 instances with YOY growth in the 14-18% range, two instances in the 24-28% range, two instances in the 32-35% range, and two instances when the YOY growth was 41% or higher. Advertised pricing for Q4 2024 as of this analysis carries similar patterns of YOY pricing growth relative to Q4 2023, and it will be interesting to see if Las Vegas is able to maintain this degree of YOY price appreciation.

A complete shift in price evolution evident in Q3 2024

Despite the significant YOY pricing gains experienced in the Las Vegas market in Q3 2024, the price evolution curve driving those gains shows a very different strategy than what was employed in Q3 of the prior year. In 3Q 2023, advertised pricing at the 120-day lead time mark represented an approximate 2.9% premium relative to to final price (i.e. the lowest rate bookable on the stay date itself), with the premium gradually ramping downward until around 80-day lead time mark, when the price data shows advertised pricing flipping to a discount relative to final price. This discount grew until the peak discount of approximately -3.2% was reached around a week before the arrival date, after which the discount quickly diminished and price finalized on the stay date.

In 3Q 2024, the pricing curve couldn’t be more different. At the 120-day lead time mark, advertised pricing was at a near 16% discount relative to final price, and this discount burned off until final price was reached on the stay date. At no point during the 120-day lead up was average advertised pricing at a premium relative to final price.

Compared to 90 days ago, Q4 pricing has come down a bit, but mostly driven by mid-week price adjustments

Comparing recent advertised prices for the 90-day stretch from October 16th through January 12th versus advertised pricing for those same dates as of July 1st, we see that the price changes are a bit mixed, with some dates priced higher as of the September 30th pricing outlook, compared to other dates where pricing was higher as of July 1st. Considering the price evolution curve observed for 3Q 2024, this would support increased advertised prices as the stay date comes closer into focus; however the data we see here is a bit mixed. On average, advertised prices for the 90-day window are approximately 3.0% lower as of September 30th relative to where they were on July 1st. It’s worth noting that, in terms of day-of-week adjustments, much of the downward price movement was driven by Sunday through Wednesday nights, which experienced price declines ranging from -4.0% to -5.5% on average. Thursday nights came down in price by an average of -2.1%, and Friday and Saturday nights held fairly constant, experiencing average downward price movements of -0.6% and -0.3%, respectively.

Short-term rental supply in Las Vegas is growing steadily (and rapidly)

It’s worth noting, however, that the total supply of short term rental units is growing at a more rapid clip in comparison to the aggregation of studio + 1 bedroom units (i.e. those most comparable to a traditional hotel room). As it can be seen in the graph, short-term rental supply in Las Vegas was largely stable heading into COVID, and remained stable through much of the summer of 2021. In the fall of 2021, however, short-term rental supply in Las Vegas began accelerating upward, which has continued through current day.

In September 2021, there were approximately 9,400 short-term rental units in Las Vegas, of which, just under half of them were either studio or 1 bedroom units (approximately 4,500). As of September 2024, just 3 years later, total supply of short term rental units has increased to roughly 17,200 – a supply increase of 82.8% over 3 years! While studio + 1 bedroom supply hasn’t increased as rapidly, it has certainly kept pace, increasing by 65.5% to 7,500 units over the same time period.

Market-wide short-term rental ADR and ADR for studio + 1 bedroom units growing at a similar trajectory

For the most part, the TTM ADR⁽²⁾ trend line for the aggregation of studio + 1 bedroom short-term rental units in Las Vegas has historically moved very much in parallel with market-wide TTM ADR for the broader Las Vegas short-term rental market. One noteworthy exception of this was from November 2022 through September 2023. Over this stretch, the studio + 1 bedroom unit aggregation experienced a TTM ADR decline of 7.3%, whereas the broader total short-term rental market experienced appreciation of 2.6%. Since September 2023, both the studio + 1 bedroom unit aggregation and the broader total short-term rental market has experienced stable and consistent rate appreciation, with TTM ADR increasing by 25.3% and 18.9%, respectively.

Occupancy for studio + 1 bedroom units is remarkably similar to market-wide occupancy

Through a year-and-a-half of COVID, market-wide occupancy levels⁽²⁾ for the short-term rental market in Las Vegas achieved a small but consistent occupancy premium over the aggregation of studio + 1 bedroom units. The performance shifted, however, in August 2021, at which point the occupancy trend lines for both the studio + 1 bedroom aggregation, as well as the broader total short-term rental market, appeared to sync up and move very much in unison. In a relatively even split, there have been some months when the broader market achieved an inconsequential occupancy premium, and in other months, the data flipped with the studio + 1 bedroom units aggregation achieving such an unremarkable occupancy premium. On average since August 2021, the studio + 1 bedroom aggregation achieved an average monthly occupancy premium of just 0.1 percentage points.

⁽¹⁾Actualized lowest price for a given time period represents the average of the lowest bookable rates for a standard hotel room for all hotels within Lighthouse’s data set within the given geography, as of 10 days before each stay date within the time period in question

⁽²⁾Lighthouse’s short-term rental performance data is comprised of Airbnb data