How can some Vegas hotel rooms be so cheap?

There are days on the Las Vegas Strip where a visitor could spend as much on fast food as they did on a hotel room.

Las Vegas has long branded itself as a value-driven destination, and that’s apparent some days when properties advertise rooms for around $20, or just over the price of a cold brew coffee and breakfast sandwich at a Starbucks on the Strip.

As the tourism destination goes into winter, many hotel/casino operators are launching special seasonal pricing to entice visitors back. Caesars Entertainment is advertising rooms at the Flamingo as low as $21 during a “winter getaway” sale. Meanwhile, select early and midweek rooms at the Rio were $28 in January and February, according to its booking website. And MGM Resorts International promoted some $20 room nights at Excalibur in January.

Hotel room pricing is dynamic, meaning it changes in response to supply and demand in the market, said Mehmet Erdem, a hospitality professor at the University of Nevada, Las Vegas. Hotels in other markets may depend heavily on room revenue, but Las Vegas resorts’ other revenue streams can fill in the gaps.

“We look at the total revenue generated per guest,” Erdem said. “Maybe a customer is paying only $18 a night plus resort fees, but then he’s dropping $1,000 at the tables.”

If you see a room being advertised at an eyebrow-raising rate, it may not reflect the total cost of the stay. Though hotels and third-party vendors advertise the starting rates, a multi-night stay may not hold at that price. Some hotels will use a low rate on the first night to entice a longer stay in a strategy that revenue managers use called fencing, Erdem said. Attribute-based pricing, where amenities and views are commodified, can also add to the bill by the time you check out.

On top of it all, the advertisement does not include taxes and resort fees, which can add more than $50 to the final invoice.

So, how and when can leisure travelers score the cheapest rooms? Consider traveling at the beginning of the week, when prices are more affordable. Don’t expect an inexpensive bill if you’re visiting during major events, either.

Erdem also recommends shopping around online for the room or offer that best fits your travel needs. Going beyond the paid search results and social media ads will better lead to finding the true reservation cost.

“This access to information is putting consumers in the driver’s seat when it comes to booking,” he said. “Hotels are getting more creative with different revenue strategies to be out there, be present on social media and Google, because you have no choice but to be present. But at the same time, hotels have to generate revenue because you’re not running a church. You need to make profits.”

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