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July 24, 2016

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MGM to start charging for parking at Strip casinos

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John Locher / AP

The entrance to parking at Bellagio on Thursday, Jan. 14, 2016, on the Las Vegas Strip.

Updated Friday, Jan. 15, 2016 | 6:30 p.m.

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This architectural rendering provided by MGM Resorts International shows a proposed new MGM Resorts parking garage. Casino giant MGM Resorts International will announce Friday, Jan. 15, 2016, that it plans to begin charging visitors for parking this year at some of its properties in Las Vegas.

Click to enlarge photo

MGM Resorts International, of which Mandalay Bay is a part, announced Friday, Jan. 15, 2016, that it will become the first major casino company to start charging visitors for parking on the Strip.

In a city built on luring tourists with cheap thrills and free cocktails, a big part of the Las Vegas Strip will soon slash away its most basic freebie: parking.

MGM Resorts International announced Friday that it will become the first major casino company to start charging visitors for parking this year. The move could bring in millions of dollars annually and dramatically change a tourism hotspot that increasingly caters to visitors who come for pricey attractions besides gambling.

Both local residents and drive-in visitors had grown accustomed to the perk of free parking when most big-city venues attach a fee.

Sin City's largest hotel-casino operator said it will charge $10 or less for overnight self-parking at most of its Strip properties starting this spring, coinciding with the April opening of the Las Vegas-based company's T-Mobile Arena.

MGM Resorts has 35,310 rooms and 37,000 parking spots on the Strip, which come at a premium during major events. The parking fees will come at Mandalay Bay, Delano, Luxor, Excalibur, Monte Carlo, New York-New York, Vdara, Aria, Bellagio, The Mirage and MGM Grand.

Valet parking will cost more, but some parking at the Circus Circus hotel and the Crystals and Mandalay Bay Place shopping centers will still be free.

The company did not provide details on short-term parking fees and said its other properties, in Mississippi, Michigan and China, won't be affected. Parking at some hotels will be cheaper than others, and Clark County residents will get a grace period. Those in MGM's loyalty program can earn free parking rewards.

The fees were a surprise, but they fall in line with casinos' focus on growing their database of gamblers through reward programs, according to gambling analyst Alex Bumazhny with Fitch Ratings. As a leader in the convention business, MGM also may see the fees as a small addition for business travelers with expense accounts, though $10 is much higher than the $4 charged by casinos in rival Atlantic City, Bumazhny said.

Many of the MGM properties charging for parking are on the southern end of the Strip, which could make it less likely that a visitor heading to a specific restaurant or show would park elsewhere.

"I don't know that people will try to game the system. ... People will accept it or (it'll) turn them off and they may try another property," said Bumazhny, predicting that the fees will cut into MGM revenue from its restaurants and hotels.

Michael Green, a history professor at the University of Nevada, Las Vegas, said the move shakes up a long-held entitlement of free parking among Las Vegans. They expect tourists to foot the bill on amenities that locals enjoy, he said.

It used to be that gambling revenue could easily offset those costs, but the focus has increasingly shifted to other offerings since Nevada stopped being the only state with legal gambling in 1978, the professor said.

That's one reason to move to fee-based parking — 70 percent of MGM's revenue comes from outside the casino, including celebrity restaurants, high-end shops, shows and nightclubs, said Corey Sanders, the company's chief operating officer.

Though MGM may be the first to disrupt the Strip's parking model, Sanders said he believes competitors will follow suit.

"There'll be initial backlash, but a month from now, three months from now, people will completely forget about it," he said. "In general, these decisions are really hard decisions to make, but I think we have enough positive things to say about it and are creating enough enhancements to justify it."

MGM said it is building a 3,000-space parking garage at the Excalibur site and making $36 million in upgrades to existing ones, using the new parking revenue to help offset some of its costs.

Across the Strip, it remains to be seen whether competitors will take up the concept. Other major casino operators have not commented, but Bumazhny said the tide can turn fast. It took about five years for Strip properties to make "resort fees" the standard.

Green, the historian, warned the parking costs would likely further alienate residents.

"Locals tend to increasingly feel priced out of the Strip," he said. "It's catering to big-money visitors, but actually it always did that. Locals just happen to get the benefits. Now there seem to be fewer benefits."

Britney Gay, 24, of Las Vegas, said she usually chooses to park at MGM Grand's garage but would go elsewhere because of the fee.

"Nothing is free, but still, parking is," she said. "They need to do something free here for once in a while, cause people come and pay their money to stay in these nice hotels. Can I get some free parking instead of free bottles of water?"

Las Vegan Anita Sanchez, 26, said a parking fee would hit locals the hardest, as they routinely visit the Strip for food and entertainment.

"All I know is I'll be out here a lot less when they start charging," Sanchez said.

Cam Bender, 38, a Vancouver, Wash., native who said he visits the valley twice annually with his wife and two teenage sons, also opposed the announcement.

"I think we pay enough to stay at the hotels, gamble and see the shows," Bender said Friday afternoon on Las Vegas Boulevard. "It just feels like this is completely unnecessary."

Others on the Strip said that while they don't necessarily appreciate the fee, they doubted the change would have a big effect.

"I don't think you're going to care about 10 bucks for parking when you're planning on spending a few hundred or a few grand," said Kevin Woo, a tourist from Palo Alto, Calif.

Sun reporter Chris Kudialis contributed to this report.

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