Tough Times for Vegas

The competition stems from online hotel discount reservations and not from online gambling itself. According to a Bear, Stearns and Company analyst, Jason Ader, the casino market is facing stiff competition in that low cost vacation packages of different types are being offered, forcing Las Vegas to cut prices to woo customers back.

Ader said, "At the mid-tier and low-end levels, we believe hotels particularly in Las Vegas, are in a price war."

A further problem at hand says Micahel Tew of Bear, Stearns, is that no new Las Vegas resorts have been established.

Some hotel facilities such as Bellagio, Mandalay Bay and Venetian have added rooms but slashed prices because they have nothing new to add to their package. In the more popular area of Las Vegas according to Bears, a 10% price cut to $135 a night during the week was reported for the Chinese New Year season and weekend rates were cut 20% to $195 as opposed to last year.

From February 17-23 rates were down by 3% from last year. The overriding problem is that fewer requests are being made to book reservations which lead analysts to question what is in store for the near future.