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Paradise Misplaced
Estimated Room Income
Income Approach to Value:Estimate of Room Income

In estimating the scheduled gross room rental income attributable to the subject, if the subject is completed in substantial compliance with preliminary plans enclosed, room rental rates in hotels along the Las Vegas “Strip” were analyzed and compared to the subject. The chart following shows a summary of room rates received on existing facilities along the Las Vegas “Strip”. The primary consideration is given to the larger hotels on the Las Vegas “Strip” as compared to the subject which includes Caesar's Palace, the@’’Dunes, The Flamingo, the Frontier, the Landmark, the Hilton, the MGM Grand, the Riviera, the Sahara, the Sands and the Tropicana. The average minimum room income for a double is $27.00 per room per night and the average maximum room rate for a double room is $39.00 per night. Projecting the subject small rooms at $33.00 per night and the larger single subject rooms at $40.00 per night is considered to place the subject in a competitive position, assuming a deluxe quality of furnishings and decor in the subject.

The minimum average rates for the 1-bedroom suites on the above listed hotels is $75.00 and the maximum average for the 1-bedroom suites is--$112.00. Projecting the subject 65 suites at $80.00 per night is considered to place the subject proposed hotel in an extremely competitive position if constructed in the manner proposed. While these rates are below the averages of competing facilities on the “Strip”, subject suites are 1 room and some competing suites are 2 room.

The vacancy estimate to room rentals is based upon reported vacancies in the Las Vegas area for hotels as reported by the Las Vegas Convention Authority and is considered to be substantially in line with vacancies known on existing hotel facilities. While forecasted at 15%, which is- above the 1973 and 1974 actual vacancies, the first 6 months of 1975 show a slightly higher rate. This is prior, however, to the summer months.

The following page sets forth a summary to existing room rental rates on hotels on the Las Vegas "Strip”. In addition to those shown following, new additions to hotel facilities in the general Las Vegas area are planned to have room rates quite substantially above room rates currently being charged by those facilities.

room rates

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Last modified Tuesday, 09-Jun-2009 17:03:00 PDT