With nightly rates as low as $20, Las Vegas is known for having some of the most affordable hotel prices in the country. If you’ve ever booked a Vegas vacation, you may wonder how prices can be so low for rooms in America’s playground.

In short, cheap room rates are a strategic part of Las Vegas’ business model, designed to get more visitors spending money on the casino floor and amenities. Competition also plays a major role in driving down prices.

This article dives into the economics, competitive landscape, and marketing tactics that allow Vegas hotels to offer dirt-cheap room rates, even at the most luxurious resorts on The Strip.

Supply and Demand Factors

When it comes to understanding why hotels in Las Vegas are so cheap, one must consider the various supply and demand factors at play. These factors can help shed light on the affordability of accommodations in this bustling city.

Oversupply of Hotel Rooms

One major factor contributing to the affordability of hotels in Las Vegas is the oversupply of hotel rooms. Over the years, the city has seen a rapid expansion in the number of hotels and resorts. As a result, there is fierce competition among these establishments to attract guests.

This competition often leads to lower prices as hotels try to fill their rooms.

According to a report by Las Vegas Convention and Visitors Authority, as of 2020, there are over 150,000 hotel rooms available in Las Vegas. This abundance of options gives travelers the opportunity to find great deals and discounts on accommodations.

Seasonal Tourism Cycles

The seasonal nature of tourism in Las Vegas also plays a role in the affordability of hotels. The city experiences fluctuations in visitor numbers throughout the year, with certain periods being more popular than others.

During the off-peak seasons, such as the hot summer months or weekdays, hotels often struggle to fill their rooms. To entice visitors during these slower periods, hotels offer discounted rates and special promotions.

This can result in significant savings for travelers looking to visit Las Vegas during these times.

However, it’s worth noting that during peak seasons, such as major holidays or popular events, hotel prices may increase due to higher demand. It’s always a good idea to plan your trip and book accommodations in advance to secure the best deals.

The City’s Business Model

Las Vegas, often referred to as the “Entertainment Capital of the World,” is known for its vibrant nightlife, luxurious hotels, and of course, its world-class casinos. However, one may wonder why hotels in Las Vegas are surprisingly affordable compared to other major cities.

The answer lies in the city’s unique business model.

Low Room Rates Get People in Casinos

One of the main reasons hotels in Las Vegas can offer such cheap rates is because they rely heavily on revenue generated from their casinos. These hotels understand that by attracting guests with affordable room rates, they can encourage visitors to spend more money in their casinos, restaurants, and entertainment venues.

The goal is to entice guests to stay and play, ultimately making up for the lower room rates through increased revenue from other areas.

The competition among hotels in Las Vegas is fierce, with each establishment vying for a share of the lucrative casino market. This competition drives down room rates, making it more affordable for visitors to experience the luxury and excitement that Las Vegas has to offer.

The hotels understand that by offering competitive prices, they can attract a larger customer base and increase their overall profits.

Revenue Mainly from Non-Gaming Areas

Contrary to popular belief, the majority of revenue generated by hotels in Las Vegas does not come from gambling activities. In fact, non-gaming areas such as hotel room bookings, food and beverage sales, and entertainment events account for a significant portion of their earnings.

This diversification of revenue streams allows hotels to offer lower room rates while still maintaining a profitable business.

Hotels in Las Vegas invest heavily in creating a wide range of non-gaming attractions to attract visitors. From world-class restaurants helmed by renowned chefs to spectacular live performances by famous entertainers, there is something for everyone in the city.

These additional amenities not only enhance the overall guest experience but also provide an additional source of revenue for the hotels.

Competition for Visitors

One of the main reasons why hotels in Las Vegas are so cheap is the intense competition for visitors. The city is well-known for its vibrant nightlife, world-class entertainment, and luxurious accommodations.

With a plethora of hotels lining the famous Las Vegas Strip, each establishment strives to attract as many guests as possible. This fierce competition drives hotel prices down, making it more affordable for travelers to experience the glitz and glamour of Las Vegas.

Range of Choices on The Strip

Las Vegas is home to a wide range of hotels, catering to every budget and preference. From extravagant and opulent resorts to more budget-friendly options, there is something for everyone. The sheer number of hotels on the Strip means that visitors have numerous choices when it comes to finding accommodations.

This variety allows hotels to compete with each other by offering competitive rates, enticing packages, and special promotions to attract guests.

Battle for Bargain-Hunters

The battle for bargain-hunters is another reason why hotels in Las Vegas are so cheap. Many visitors to Las Vegas are looking for great deals and discounts, and hotels are well aware of this. In order to attract these budget-conscious travelers, hotels often offer heavily discounted room rates, freebies, and other incentives.

These deals can be found throughout the year, as hotels try to fill their rooms during slower periods or weekdays. Savvy travelers can take advantage of these bargains and enjoy a luxurious stay in Las Vegas without breaking the bank.

According to a survey conducted by Vegas.com, the average nightly rate for a hotel in Las Vegas is significantly lower compared to other major tourist destinations in the United States. This is due to the high level of competition and the abundance of hotel options in the city.

Additionally, the revenue generated by casinos and other attractions in Las Vegas allows hotels to offer lower room rates. The hotels understand that visitors are likely to spend money on gambling, entertainment, dining, and shopping during their stay, so they can afford to offer cheaper accommodations as a way to attract more guests.

Marketing and Promotions

One of the reasons why hotels in Las Vegas are so cheap is due to their strategic marketing and promotional efforts. These hotels understand the importance of attracting a large number of guests to fill their rooms, and they use various tactics to entice potential visitors.

Loyalty Programs and Packages

Hotels in Las Vegas often offer loyalty programs and packages to encourage repeat business. These programs reward guests with special perks, such as discounted room rates, complimentary meals, show tickets, or even free stays.

By offering these incentives, hotels can build a loyal customer base and ensure a steady stream of bookings throughout the year.

For example, the MGM Resorts International, one of the largest hotel chains in Las Vegas, has a loyalty program called M life Rewards. This program allows members to earn points for every dollar spent on hotel stays, dining, entertainment, and more.

These points can then be redeemed for various rewards, including discounted room rates and exclusive experiences.

Ads Targeting Low Rollers

Another marketing strategy employed by hotels in Las Vegas is targeting low rollers. While the city is known for its luxurious and high-end resorts, there is also a market for budget-conscious travelers who are looking for affordable accommodations.

Hotels catering to this market segment often advertise heavily, targeting potential guests who are seeking affordable options. They may offer special promotions or discounts through online travel agencies, social media platforms, or even direct mail campaigns.

These ads highlight the affordability of their rooms and amenities, enticing budget travelers to choose their hotel over more expensive options.

Additionally, hotels may partner with airlines or other travel companies to create bundled packages that include both flights and accommodations. This allows them to attract a wider audience and offer more competitive prices to potential guests.


While a Las Vegas vacation may be easy on your wallet, the hotels and casinos still find ways to profit from package deals and rock-bottom room rates. Understanding the economic forces and marketing tactics in play can help you find the best hotel value on your next Sin City getaway.

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