The Mirage, an iconic Las Vegas Strip resort, is facing a significant drop in room rates as it approaches its imminent closure in mid-July. The property, currently operated by Hard Rock International, will soon undergo reconstruction, with plans to reopen as the Hard Rock Las Vegas in 2027.
The Mirage, known for its grandeur and entertainment, has been a staple of the Las Vegas landscape. However, the hotel’s fortunes have taken a downturn as it prepares to shut its doors. The impending closure has sparked speculation about the impact on the local market and the redistribution of guests to other properties.
Room Rates Plummet
Analysts report that room rates at The Mirage have plummeted year over year for both June and July. Specifically, rates have declined by 46% and 44%, respectively. This sharp decrease suggests a lack of demand as the property approaches its closure. With approximately 3,000 rooms being eliminated from the market, the Las Vegas Strip will experience a shortage of available accommodations. The recent demolition of the Tropicana Las Vegas further exacerbates this situation.
Winners and Losers
While The Mirage’s closure may negatively affect its own business, other major players in the Las Vegas hospitality scene stand to benefit. MGM Resorts and Caesars Entertainment, having likely already attracted their best players from The Mirage, are well-positioned to absorb the displaced guests. Additionally, minimal disruptions are expected from Fontainebleau’s early months, and Venetian’s ongoing renovations are unlikely to cause significant issues in 2024/25.
Room Rate Trends
Despite The Mirage’s struggles, Las Vegas Strip operators are finishing the second quarter with solid room rate trends. Truist Securities’ survey indicates that second-quarter rates are up 15% year over year for the Strip overall, with MGM Resorts International and Caesars Entertainment showing increases of 10% and 6%, respectively. Weekend rates have also seen growth, with MGM and Caesars up 17% and 11%, while weekdays are up 11% and 7%. Wynn Las Vegas, in particular, has experienced significant rate growth, trending up 36% for the second quarter.
Looking Ahead
As the Mirage closure looms, the third quarter awaits the full impact. Preliminary rates for July and August suggest flattish year-over-year comparisons across Strip properties, despite tougher comps. However, shorter booking windows may lead to rate improvements after the closure. Overall, the second quarter remains solid for Strip operators, but further data points are needed to assess the third quarter.
