- Las Vegas Sands Corporation is temporarily closing the Palazzo tower suites due to the continued weakness in the Las Vegas tourism and gaming market.
- In July, the Palazzo went to a weekend only schedule for their accommodations.
- The closure is effective immediately and presumably will continue until a rebound in business justifies reopening.
In another sign of the continuing weakness in the Las Vegas tourism and gaming economy Las Vegas Sands Corporation is closing the Palazzo tower suites effective immediately.
This is the second major cutback in accommodations at the sister tower of The Venetian. Both properties reopened with the rest of the Las Vegas gaming industry on June 4 following an unprecedented shutdown of more than two months due to the COVID-19 pandemic. Six weeks later, it was apparent that the market demand–particularly midweek market demand–was nowhere near sufficient to justify keeping both properties open 24/7. The Palazzo went to a ‘weekend only’ accommodations schedule in July in a reflection of the struggle to fill rooms midweek with no convention business.
A spokesperson from Las Vegas Sands told several local media outlets that the change was being implemented to “better reflect occupancy patterns.” If that sounds like ‘deja vu all over again’ it is–when the Palazzo went to a ‘weekend only’ schedule in July Sands spokesman Keith Salwoski said it was a “response to travel demand for the summer … to better reflect occupancy patterns.”
In an article by Las Vegas Review-Journal business reporter Bailey Schulz the company spokesman indicated that ‘reservations will be offered exclusively at the Sands’ Venetian tower through December 23′. What will happen after that is unclear but barring some type of dramatic surge in midweek accommodation rates I’m thinking that the Palazzo will remain closed–possibly reopening to accommodate New Years travel (assuming that there is a significant influx of visitors with much of the US experiencing a massive surge in COVID-19 cases).
If you’ve ever been to The Venetian midweek you’re no doubt aware that it is usually convention goers as far as the eye can see. Of any major Strip property it’s very likely that The Venetian/Palazzo has a more significant exposure to conventions than any other. With the Las Vegas Convention & Visitors Authority currently listing convention attendance as ‘N/A’ on their monthly reports and that influx of visitors being such a crucial component of midweek occupancy I can’t imagine that The Palazzo won’t remain closed or at least return to the ‘weekend only’ schedule for the foreseeable future.
The last full month of data (October 2020) reported by the LVCVA offers a sobering view of the state of convention business–or more appropriately, the lack thereof. In the past five years, each October has brought in excess of a half million convention visitors to Las Vegas. In the past four years, Las Vegas’s convention visitor count has been at 6.3 million or more annually.
This report reflects 7 straight months of zero convention attendance but the city is now in the ninth month without this essential source of midweek revenue. There’s every reason to think that by the time there’s any revival of convention travel Las Vegas will have dropped a zero in this visitor category every month for a year or more.
On a macro level, Las Vegas attracted 1.86 million visitors in October which is a 9% increase over September’s total but a -49.4% drop from the same month a year ago. The total occupancy rate for October was 46.9%–essentially unchanged from the previous month but down -43.1% from a year ago. RevPAR (revenue per available room) was down -3.1% from September and down a whopping -59.7% from the same month last year.
Weekend occupancy came in at 64.2% in October which is down -1.9% month over month and down -33.8% from last year. Midweek occupancy ticked slightly upward from September to October increasing 0.1% to 38.6% but the drop from the same time last year is staggering–in October 2019, the midweek occupancy rate was 87.1% representing a drop of -48.5%. Between travel restrictions that keep out of state and foreign visitors away and the continued lack of conventions, nightclubs and large scale entertainment it looks like there won’t be any quick fix to the midweek occupancy woes.