Why Are Vegas Hotels So Cheap? (Discovering the Real Deal in Las Vegas)

A trip to Las Vegas can be a memorable experience, and it all starts with where you stay. 

While Vegas isn’t known for being an especially budget-friendly vacation destination, it does offer surprisingly affordable hotel accommodations. 

With a variety of hotel options both on and off The Strip, guests can enjoy luxury and comfort in Vegas without breaking the bank. 

Vegas hotels generally offer inexpensive rooms because of their revenue models. Most properties actually generate their profits from gaming, dining, retail, and entertainment – rather than their hotel rooms. This business model keeps room prices competitive, attracting guests who will ultimately spend more elsewhere on the property. Moreover, Vegas is a prime tourist destination, and hotels compete with each other for the constant flow of guests. Keeping prices affordable ensures high occupancy rates even during low seasons.

The following explains why Vegas hotels are so cheap, including what affects pricing and how Vegas hotels make money. 

Key Takeaways

  • Vegas hotels generate revenue from multiple sources, such as gaming, dining, and entertainment, which keeps room prices competitive.
  • Las Vegas hotels are also cheap due to the multitude of rooms and the constant flow of tourists.
  • Hotel pricing is influenced by the season as well as the availability of vacation packages.

Why Are Vegas Hotels So Cheap?

Replica of Statue of Liberty in front of a building in Las Vegas.

Vegas hotels are so cheap because they make money in other ways – primarily from on-site gaming, dining, retail, and entertainment. 

Because profits are earned from these other areas, Vegas hotels entice guests to their properties with affordable room rates.  

However, in addition to this overarching business model, four other factors affect hotel room prices in Las Vegas.

1. There Are A Lot of Hotel Rooms in Vegas

Vegas is known as the “Entertainment Capital of the World,” and to keep up with the millions of tourists visiting each year, it boasts nearly 150,000 hotel rooms available both on and off The Strip.

There are upscale hotels with luxurious amenities, as well as budget hotels that provide a comfortable stay without breaking the bank. 

The biggest resort on The Strip, the MGM Grand, has over 6,800 rooms; however, most Vegas hotels have between 2000 and 4000 rooms available. 

For example, one of the most affordable properties in Vegas, the Flamingo, has just under 3700 rooms.

Also, remember that Vegas hotels aim to optimize room occupancy – empty rooms don’t generate revenue, so it’s better to fill them at a lower price than to keep them vacant. 

2. There Are Always Tourists in Vegas

Another factor influencing the price of accommodations in Vegas is the fact it’s always busy. 

The city is known for its unique plethora of attractions that cater to everyone from the very young to the very old. 

Essentially, the high demand for accommodation means hotels must compete for your business. As a result, they often offer lower room rates to attract guests. 

There are also times of the week and times of the year when tourism levels dip, and hotels are even cheaper. 

For example, the summer is often slightly less busy than other times of the year, and booking a room on weekdays (Sun-Thurs) can help save money too.

3. Conferences and Conventions Affect Prices in Vegas

One reason Vegas hotels can be so affordable is the impact of conferences and conventions on their pricing. 

These events bring in a substantial number of visitors, which results in higher hotel room rates during the event periods. 

However, hotels lower their prices when there are fewer of these events or during off-peak seasons.

Moreover, hotels in Vegas often use dynamic pricing, adjusting their rates based on factors such as demand, time of year, and the type of visitors they want to attract. 

This approach ensures a balance between supply and demand, making it easier for potential guests to find affordable accommodation – especially if their dates are flexible.

4. There Are Usually Vacation Packages Available for Vegas

One of the most convenient reasons Vegas hotels are cheap is the availability of vacation packages. 

Many resorts and third-party travel platforms offer deals for Las Vegas stays. 

These packages typically include flights, accommodations, and other amenities at a discounted rate.

Additionally, travel agents and third-party sites often negotiate with hotels to provide lower rates in exchange for bundling deals. 

Hotels can offer even better rates to consumers through these collaborations, making them more attractive to potential guests. 

For instance, Caesars might sell a room to the public for $150, but through a third-party website, they would sell the same room for just $100.

Remember, Vegas hotels make their money from everything other than their rooms, so they’d rather lower their prices and get people in the door than have too many vacant rooms. 

How Do Las Vegas Hotels Make Money?

A city with tall buildings and cars on the highway.

Las Vegas hotels have mastered the art of making money, even with their affordable room rates. 

Vegas hotels earn profits through various revenue streams – mainly casinos, restaurants, entertainment, retail, and resort fees. 

So while cheap room rates may entice you, don’t forget to consider the additional expenses you might incur during your stay.

Vegas Hotels Make Money From Gaming 

One reason for the low room prices at Vegas hotels is the gaming income they generate from their casinos. 

Due to the significant amount of money made from gambling, they can afford to maintain low pricing on hotel rooms without sacrificing profit. 

As a result, you’ll often find deals on upscale properties like the MGM Grand for less than $100 a night.

Additionally, high rollers often get their rooms for free as a ‘perk’ for spending big in the casinos.

Vegas Hotels Make Money From Retail, Entertainment, and Dining

Hotels in Vegas strive to attract guests with the promise of a great experience, delivering remarkable entertainment, diverse retail options, and exquisite dining. 

Most properties, especially those on The Strip, feature performances from renowned artists, offer one-of-a-kind retail outlets and boast a wide variety of chef-driven/award-winning restaurants.

To ensure optimal room occupancy rates, Vegas hotels often offer lower room rates, hoping guests will spend their entertainment, retail, and dining dollars on the property they stay at.

Vegas Hotels Make Money From Resort Fees

So while Vegas hotel rates may be inexpensive on the surface, there are often additional nightly costs known as resort fees. 

Resort fees cover amenities like Wi-Fi, gym access, and pool use and might be listed under different names, such as “destination charge” or “service charge.” 

The initial low room rate is a marketing strategy to attract tourists, and these mandatory fees can significantly increase the overall price.

For example, a $40 fee per night isn’t uncommon, and a one-time deposit of $50-$150 might also be required, usually paid with a credit card.

However, while resort fees may add to the costs, Vegas hotels can still be more affordable than hotels in other major cities like New York, Los Angeles, and Miami, often offering an overall better experience.