It’s only a matter of time before Sheldon Adelson decides that Airbnb is evil and should be against the law. Based on the latest findings that the accommodations booking service is taking away revenue from casinos and their hotel rooms, Adelson will certainly try to find some angle or pocket he can use to his advantage.
According to a study by Telsey Group Advisory, a New York-based research firm, Airbnb accommodations took $150 million away from Las Vegas Strip venues. Vegas visitors, as has been the case in other tourist destinations across the globe, have been turning to Airbnb to find less expensive accommodations before setting out on their journey.
Telsey’s Brian McGill explains, “Over the past few years, Airbnb has seen explosive growth in Las Vegas and the recent Google search trends suggest this will only continue in the near-term. This is a major problem during periods of peak demand that seems to have impacted the rates.”
Before this year is over, the number of visitors using Airbnb will reach one million, an increase of almost 300,000 over what was seen in 2018. McGill adds, “Over the past few years, Airbnb has seen explosive growth in Las Vegas and the recent Google search trends suggest this will only continue in the near-term.”
The reason for the switch from casino accommodations to private is simple—the casinos are shooting themselves in the foot. They’re charging higher resort fees than ever, with hotel rooms running, on average $100-$200 with resort fees of $30-$50 tacked on. Using Airbnb, visitors can typically save around $100 a night.
Airbnb bookings only account for 1.7% of all Vegas bookings, so it isn’t yet making a huge impact. However, there are around 150,000 hotel rooms on The Strip. If each charged a resort fee of just $30 at 80% occupancy, in one night, the loss would be over $6,000. Compound that across the year and suddenly the impact is felt.
McGill adds, “This is a major problem during periods of peak demand that seems to have impacted the rates during CES, Super Bowl weekend and other events.” The trend toward more Airbnb bookings will most likely continue, as visitors are tired of being charged everywhere they turn—parking fees, resort fees, etc.