My source that says the The Mirage has been sold also says that they will have a new hotel partner once they’re no longer be a part of M Life, MGM Resorts’ players club.
It’s rumored that Marriott will be the hotel partner for The Mirage once the sale goes through.
It’s difficult to be an independent hotel-casino operator on the Vegas Strip so Starwood Capital Group is taking steps to bring in a partner to help fill the hotel. Marriott was just voted the #1 national hotel chain rewards program by US News and World Report.
Starwood is also rumored to bringing in Paragon Gaming to operate the casino. Paragon currently operates the Westgate casino and used to operate the Riviera casino.
SLS Las Vegas is off to a rocky start with employees being let go and restaurants being closed or rebranded. Their business model is similar to the Cosmopolitan where the casino generates 20-30% of the revenue and the rest comes from clubs, restaurants, bars, hotel rooms, etc.
If the financial woes continue at SLS Las Vegas throughout the year their owner, Stockbridge (90% owners of SLS), may look to cut their losses. If Blackstone can turn around the Cosmo’s financial woes to become profitable they may look to target SLS Las Vegas. The property is new and business model is similar to the Cosmo that it might be a perfect addition.
The two hotels are already linked through Blackstone. Blackstone owns Hilton and SLS Las Vegas is already a part of the Hilton Curio collection of hotels. Cosmopolitan is without an outside hotel partner for the time being but a Vegas Curio combo could help the collection.
Hotel room rates are rising rapidly and capacity is shrinking with the Riviera closing. Adding a second property to their Las Vegas portfolio makes sense to create more value for when Blackstone decides to sell. SLS Las Vegas might be the quickest property to turn around and sell again for a larger profit.
I see this potentially as a 1+1=3 scenario if A) Blackstone can create positive revenue at the Cosmo B) Stockbridge decides to sell SLS Las Vegas C) Blackstone can repeat a turnaround at Cosmo at SLS.
(Jonathan) Gray (Global Head of Real Estate) said Blackstone has a “very simple” business model of “buy it, fix it, sell it.”
Buy it – Check. Now it’s time for the “fix it” stage.
Plans are sparse but here’s what I can put together right now. Blackstone will make some changes you can see and some that you can’t see.
Casino – Blackstone is “acutely focused” on fixing the casino although no specific plans have been revealed besides that they want to “reinvigorate” the ground floor. Maybe this means expanding the concept of the popular Bond Bar area to other parts of the casino. (see details on Bond Bar pit at Vegas Chatter)
New Rooms – 46 new hotel rooms will be added in the west tower. This is smart since they control all of the revenue, unlike clubs and restaurants. The Cosmo also has the highest ADR (Average Daily Room) prices in Vegas. This could generate about $10,000 a week. Not much in the overall budget but it can’t hurt.
Expect Something New At The Top Of The East Tower – Blackstone says to expect “something creative with unused space at the top of the east tower”. Another club or restaurant with amazing views of Vegas sounds like a good fit here.
The Cosmopolitan is one of my favorite casinos in Vegas. I love hanging out here and am really looking forward to seeing what kind of changes Blackstone has in mind. We can discuss potential buyers next holiday season.
Update: Looks like the deal is done and only one tower will become timeshares.
LVH has been on the market for a while now with rumblings on who will buy it. Over the past few weeks the rumblings have gotten louder that Westgate, the timeshare company, would be purchasing LVH.
Since the only people reporting this are gossip columnists like Johnny Kats, Norm Clarke and Robin Leach I wouldn’t consider this a done deal just yet. These aren’t traditional reporters as much as they’re gossip gatherers and rumor mongers. This sale could be true but their job is to share rumors, not report facts.
The rumor that the LVH was sold for $150 million is a bit of a surprise on the low side. For reference, the beautiful Cosmopolitan was sold to Blackstone for 10x that amount, $1.7 billion. The comparison isn’t apples to apples just a point of reference. Since these are just rumors there isn’t any real information about the sale.
Westgate is a timeshare company and not a casino operator. Westgate currently operates the timeshare behind the Flamingo. They took a big swing at opening the 2nd tower at Planet Hollywood but the recession killed that after a short run. It’s now called Elara.
Timeshare’s are typically livable apartments with kitchens, dining rooms and living rooms. They’re not outdated hotel rooms with minimal amenities and a casino with a few restaurants. If the idea is to make LVH into 100% timeshare units Westgate might have to close the hotel and combine two hotel rooms to make one giant suite. That’s a lot of work and a lot of money.
This is an interesting move for Westgate. Will they close the casino and hotel and renovate all of the rooms and casino floor? Will they find a partner to operate the casino and a hotel tower? With the connection to the Las Vegas Convention Center will they operate LVH as a traditional hotel only property?
There really are a lot of options for Westgate if this rumor is true.
When I first saw the news about IGT being for sale I didn’t think much of it. The headline was shaped by IGT’s stock price being up 15%. I’m not in the market, so I wasn’t concerned. Then it hit me that one of the largest slot machine and the biggestvideo poker machine company is on the market and I was full of WOW.
Evidently this wasn’t a surprise to the stock market as IGT’s value has dropped 31% in the past year. They laid off 7% of their staff earlier this year in hopes of cutting enough costs to salvage the company. It doesn’t look like that’s working as the company is rumored to be on the market just to keep it alive. Reuters says IGT has been planning for a sale for the past two months.
Yesterday Hiltonannounced a new brand of hotels for a collection called Curio. The collection was “Created for travelers who seek local discovery and authentic experiences, Curio will be a carefully selected, global collection of distinctive four to five star hotels.”
Sounds cool, but is Curio really going to be what they say? Not if you look at their first Las Vegas hotel.
Curio will be a part of the Hilton HHonorsloyalty club and start with only 4 properties in the collection. It’s strange that SLS Las Vegas is a part of this collection since they’ve been said that they’re not a luxury hotel. SLS PR people have been calling the hotel “accessible luxury” since the project was announced a few years ago. When I hear “accessible luxury”, I think “shabby chic” or “cheap fancy” or “nice stuff at bargain prices” – NOT luxury.
On the flip side of cheap luxury there’s the Cosmopolitan which is 100% luxury in every way. The Cosmo hotel has the highest average daily room rate in Vegas, it has high-end shopping and dining, it’s home to the #1 nightclub (Marquee) in the entire country where they’ll deliver you a bottle of booze by Drone.
The Cosmo oozes cutting edge and luxury from every inch of the property. It’s already rumored that the Cosmo will be a part of the Hilton system. The Cosmopolitan fits the description of Curio to a tee.
Will the Cosmopolitan end up as a Curio hotel? Does it matter where it stands in the Hilton HHonors ecosystem?
Speculating on the future of Vegas is fun. Instead of full-blown posts about specific subjects I think it’s more fun to be short and concise. Here’s my take on two potential moves that would shake things up on the Vegas Strip.
Speculation: I’m going to speculate that Dan Lee’s next job will be something big. If he has a non-compete clause with Palms or just needs time away from work he might look for a major role with Genting as they open Resorts World Las Vegas.
If that’s too far ahead perhaps a move to another independently operated casino in Vegas might make sense.The Cosmopolitan might make sense as they’ll likely add new leadership when Blackstone takes over operations.
If you’re not familiar with Dan Lee, Vegas Tripping had a really detailed post when he was named CEO of Palms last year.
If you’re a Marriott customer and looking to visit to the VegasStrip you might want to make your reservations for a visit soon.
When Cosmopolitan was sold to Blackstone people with common sense assumed that the new Cosmo would be moving away from some of their current partnerships. Well, that’s the case with their hotel partner.
Say goodbye to a Marriott hotel partner on the Vegas Strip.
Since Blackstone owns Hilton, La Quinta, Wyndham and the brands beneath them, like Waldorf Astoria, the common thought was that they’d link the Cosmo with one of their existing hotel businesses. #Synergy.
…they will merge one of their hotel investment affinity programs into the Cosmopolitan to reward frequent players and guests.
“We believe that gaming revenues can increase there very quickly by 50 percent,“ I was told. “We have portfolio positions with other leisure travel properties that can be very beneficial to the future of the Cosmopolitan. There will be changes to ensure the property’s profitability in the short term.”
Changing hotel partners won’t guarantee that kind of gaming revenue increase. Even though Hilton hasn’t been named the hotel partner yet the change would be logical as Hilton and Marriott mirror each other.
The Cosmo has some of the highest room rates in Vegas and are often over 95% capacity. The change in hotel partners won’t help hotel revenue much, if any. Are Hilton customers more likely to gamble? We’ll see.
Going full circle, this changeover won’t happen overnight but if you want to use your Marriott Rewards on a free stay at the Cosmo you should book and stay soon.