How many hotel rooms are comp'ed?

Random curiosity topic: what % of hotel rooms at a casino are comp'ed vs being paid "full price?"
And / or, what would be the natural economic going price if comp'ed rooms were not a thing?

Prompted as I was booking a room at the local / regional casino for this weekend, and Saturday night was listed as 'limited availability' with a listed price of $600. Whoooaaaa! A weeknight room was listed at $180. I know many hotels (non-casino) will adjust prices based on supply/demand but it seemed extreme and made me think, at this point is anybody actually paying the list price? Or do they just do that to kill demand to try to preserve rooms for the high rollers who might arrive last minute? But I also bet there are people (with much higher salary than me) who would still pay full price.

Anyway just curious / intrigued.

At destinations with limited options, there are always groups of people who will go in together on a room and cram 6-8 people in. So I'm sure people do pay that rack rate.

Also note that at casinos like Foxwoods, everyone sees a tailored price based on their play history.

Today, I believe a hell of a lot more rooms go for list price than I previously believed. I mentioned before about joining a group that is strictly about Vegas and participation is by people who go or are going there. Most gamble little and get few comps. They go to party and 200 - 500 per night for a premium room on weekends is just part of the partying expense.

There are thousands of members of this group, it's social media BTW. The ones who get comps are TR and Mlife members. But they mostly don't get comped, as in free. Usually just discounted.

It was an eye opener for me.

If someone is willing to paying hundreds of dollars for bottle service, I don't see why they would blink very hard at paying rack rate.

Also in today's business world, I bet that the hotel side of the business also has profits goals to meet to get their bonuses.

Quote: zoobrew

If someone is willing to paying hundreds of dollars for bottle service, I don't see why they would blink very hard at paying rack rate.

Also in today's business world, I bet that the hotel side of the business also has profits goals to meet to get their bonuses.

I'm not certain if that's true with casino hotels. In fairness, I only have information that I have gathered from a higher-up at ONE casino, who would prefer to be unnamed, so this may not Universally apply:

Basically, Marketing has a certain budget and the hotel of the casino has numbers that they are supposed to meet, however, at least in the casino I am referencing, Marketing essentially, "Buys," the room from the hotel at a discounted rate. In other words, monies are literally transferred from the Marketing budget and go in as hotel, "Revenue." No tax is required because it is an entirely in-house transaction. The hotel did have some leeway as to how many rooms could be saved as, "Market," rooms and how many had to be sold to Marketing, and what Marketing, "Bought," them for, even with the discount, also depended on the Market rate, to some degree. The lowest was $50 and he didn't want to say the maximum.

That makes sense to me, having worked in a grocery store of all things. I worked as an evening grocery supervisor, and if the meat department ran out of the, "Bar clothes," as I call them, which are basically washrags, they had to, "Buy," paper towels from the grocery side because the bathroom-type paper towels are hopeless for cleaning up meat blood. Anyway, we obviously, "Sold," other departments items at-cost, but it would be subtracted from said department's budget and added to Grocery Department as revenue. There was a mountain of accompanying paperwork that was both stupid and unnecessary to complete the transaction, at least, in my opinion it was stupid. We're all the same store!!!

Quote: zoobrew

If someone is willing to paying hundreds of dollars for bottle service, I don't see why they would blink very hard at paying rack rate.

Also in today's business world, I bet that the hotel side of the business also has profits goals to meet to get their bonuses.

I mean really now what percent of people are "willing to paying hundreds of dollars for bottle service"?
No one I know.

Quote: cyrus

Prompted as I was booking a room at the local / regional casino for this weekend, and Saturday night was listed as 'limited availability' with a listed price of $600. Whoooaaaa! A weeknight room was listed at $180.

"This weekend" as in Saturday 5/23? I would understand if it was 5/15-16, as that was when Taylor Swift and Bruno Mars were performing at Rock 'n Rio.

Then again, a lot of places appear to be sold out for this weekend; the two big things I see are, Bette Midler is in town (apparently one night only) on Friday and the next UFC event is on Saturday.

I would expect the vast majority of rooms on Friday and Saturday nights to be paid for, since it's mainly tourists coming up I-15. There's nothing new about this; the two things I remember from the old AAA California/Nevada/Baja Guidebook from back in the mid-1970s were, "We're not about to try to list every restaurant in San Francisco," and, "It is pretty much impossible to get a reservation in Las Vegas for just a Saturday night."

I worked about a month and a half at a hotel as night auditor. Rack rate could really vary, it was right in front of the convention center. Convention in town, more expensive room. Sunday night was usually very cheap. Could go from $80 to >$200 depending. Then there were "buddy rooms" for employees in other cities, those were free or cheap. Feds got the fed rate almost all the time.

One guy tried to talk me down on price, thinking I could do something.

It is all supply and demand, and I am sure a lot goes into the algorithms. Plus some guesswork from management.

Quote: bobsims

I mean really now what percent of people are "willing to paying hundreds of dollars for bottle service"?
No one I know.

You haven't noticed line ups at the top clubs?

Well here's one datapoint. Over MOST of my LAS VEGAS history, I have had hardly any comped rooms.

BUT now that I have established a Player's Club card relationship with CZR TR, most of my recent trips ( the past couple of years ) had had comp'd rooms. Not necessarily on weekends, but at least some if not all of the Sun - Thurs nights.

Disclaimer: Mrs. Q decided she likes slots better than VP over the past couple of years.

Quote: cyrus

Random curiosity topi.

I think there are three different questions here:
(1) What is "rack rate". Every room has a rack rate which is the legal maximum they are permitted to charge for a night. The city or state protects visitors against hotels that could charge almost anything for either an emergency or a huge event. The "rack rate" is typically obscene.

(2) What is "full price". These are rates that you pay if they don't know you and you walk in off the street and the hotel has a reasonable percentage of rooms available.

(3) What is the rate that the casino deducts a comped room against your earnings for tax purposes. The free room is part of the cost of doing business. In theory they could have sold it (or at least had the possibility of selling it). They should be able to deduct more than just the cost of cleaning the room.

The Wynn costs US$2.7 billion and has 2,716 rooms. At the simplest that should be $1 million per room. $1 million / 365 / 10 years = $274 /night . But you add the cost of the interest on the resort and add the cleaning and the free chocolates and bath goods. But then you have to subtract the portion of the money that was for public spaces. I am sure it is negotiated with the IRS how much they can allow as a business expense for comped rooms.

Quote: pacomartin

I think there are three different questions here:
(1) What is "rack rate". Every room has a rack rate which is the legal maximum they are permitted to charge for a night. The city or state protects visitors against hotels that could charge almost anything for either an emergency or a huge event. The "rack rate" is typically obscene.

(2) What is "full price". These are rates that you pay if they don't know you and you walk in off the street and the hotel has a reasonable percentage of rooms available.

(3) What is the rate that the casino deducts a comped room against your earnings for tax purposes. The free room is part of the cost of doing business. In theory they could have sold it (or at least had the possibility of selling it). They should be able to deduct more than just the cost of cleaning the room.

The Wynn costs US$2.7 billion and has 2,716 rooms. At the simplest that should be $1 million per room. $1 million / 365 / 10 years = $274 /night . But you add the cost of the interest on the resort and add the cleaning and the free chocolates and bath goods. But then you have to subtract the portion of the money that was for public spaces. I am sure it is negotiated with the IRS how much they can allow as a business expense for comped rooms.

This is great stuff, paco! I guess it would be my inclination to ask what the "casino rate" is, as I've been quoted that as a player when advance comped rooms are not available. I almost always get a quote that beats anything online or walking in off-the-street, then play enough they write it off after the fact anyway. Seems like that might be a valid quote as a professional expensing the room, but I don't know. At least there should be an opportunity to ask when you check in, and maybe they will print out a quote sheet for your records, even if they're comping you.

Quote: ThatDonGuy

"This weekend" as in Saturday 5/23? I would understand if it was 5/15-16, as that was when Taylor Swift and Bruno Mars were performing at Rock 'n Rio.

Then again, a lot of places appear to be sold out for this weekend; the two big things I see are, Bette Midler is in town (apparently one night only) on Friday and the next UFC event is on Saturday.

I would expect the vast majority of rooms on Friday and Saturday nights to be paid for, since it's mainly tourists coming up I-15. There's nothing new about this; the two things I remember from the old AAA California/Nevada/Baja Guidebook from back in the mid-1970s were, "We're not about to try to list every restaurant in San Francisco," and, "It is pretty much impossible to get a reservation in Las Vegas for just a Saturday night."

Yes, 5/23, however this casino is in Louisiana so it's a completely different economic situation. The only calendar driven factor, to my knowledge, is that it's Memorial Day weekend.

Very good insights from all.

Our room was actually comp'ed (received a mailer), but when we called, the lady initially put us on hold for several minutes. I was worried they might revoke or reduce the offer (indeed perhaps due to some factors listed here such as the casino internal funny money rate) but thankfully still free.

It does make me curious what is the rack rate at this particular place? And if it is indeed govt regulated then who decides what it is? What's their incentive to define a rack rate, aka max rate, that is not ridiculously high?

Quote: cyrus

Yes, 5/23, however this casino is in Louisiana so it's a completely different economic situation.

Anywhere near LSU? They're hosting an NCAA softball tournament super-regional (best of 3 against Arizona State) Saturday, Sunday, and Monday.

Quote: pacomartin

I think there are three different questions here:
(1) What is "rack rate". Every room has a rack rate which is the legal maximum they are permitted to charge for a night. The city or state protects visitors against hotels that could charge almost anything for either an emergency or a huge event. The "rack rate" is typically obscene.

Technically, that's a Maximum Rate rather than a, "Rack Rate," at least speaking for the hotels at which I've worked. The Maximum Rate, again, in the hotels in which I have worked is required to be posted on a card that goes on the back of all the room doors and can vary based on room type. The Rack Rate simply means whatever my going rate is for that night based on room type, one-two adults, no pets and no discounts. In actuality, my Rack Rate has never been as high as my Maximum Rate, though I have charged my Maximum Rate on a case-by-case basis in certain situations.

Quote:

(2) What is "full price". These are rates that you pay if they don't know you and you walk in off the street and the hotel has a reasonable percentage of rooms available.

This would be my, "Rack Rate," depending on how I felt looking at the person. If I thought we might be looking at a noise complaint (or any other number of things) I'm going to open with a rate significantly greater than my Rack Rate.

Quote:

(3) What is the rate that the casino deducts a comped room against your earnings for tax purposes. The free room is part of the cost of doing business. In theory they could have sold it (or at least had the possibility of selling it). They should be able to deduct more than just the cost of cleaning the room.

I've never worked in a casino hotel, but that's my understanding from the individual to whom I spoke. The least he said Marketing, "Pays," for the room is $50.

Quote: ThatDonGuy

Anywhere near LSU? They're hosting an NCAA softball tournament super-regional (best of 3 against Arizona State) Saturday, Sunday, and Monday.

Lake Charles. About a 2 hour drive from Baton Rouge. I believe there are other casinos closer to Baton Rouge though I can't say for sure as I live in the other direction.

Don't know, but used to think especially in AC, the casinos figured they make more with empty rooms than full occupancy. $600 a night crack house quality hotel rooms exist nowhere else.

Quote: kenarman

You haven't noticed line ups at the top clubs?

1. Still a small PERCENT.
2. Not my demographic so I don't know them-or want to frankly.
3. Of those lined up I hazard to guess that a small percent of that small percent are both rich enough and foolish enough to pay $300 for a bottle of $30 vodka.

Quote: sabre

there are always groups of people who will go in together on a room and cram 6-8 people in. So I'm sure people do pay that rack rate.

Sounds exciting....NOT! Shades of summer camp with 6 to a cabin. LOL