UPDATE 2-Las Vegas Cosmopolitan partners with Marriott
By Deena Beasley LOS ANGELES, Aug 25 (Reuters) - The Cosmopolitan of Las Vegas, which plans to open 2,000 of its Las Vegas Strip hotel rooms in mid-December, has linked up with Marriott International Inc, giving it much-needed access to a database of customers. The Cosmopolitan, which was acquired by Deutsche Bank AG in a 2008 foreclosure, will be the largest property and first casino resort in Marriott's luxury "Autograph Collection," the companies said on Wednesday. The bank has chosen to run the $3.9 billion resort without an established casino partner, but at one point was thought to have a deal with Hilton Worldwide to operate the 3,000-room hotel. The property's original developer, Bruce Eichner, had a deal with Hyatt Hotels Corp. "Marriott has been looking for some time for an iconic property in the heart of the Las Vegas Strip," J.W. Marriott, Jr, the hotel company's chairman and chief executive officer, said in a statement. The deal is a distribution agreement under which the Cosmopolitan will be listed on Marriott's websites and have access to the hotelier's convention sales organization. "We have millions and millions of loyal customers ... and many of them are attracted to Las Vegas," said Marriott President Arne Sorenson. The Cosmopolitan's still unfinished twin 50-story towers are wedged between two properties run by MGM Resorts International -- the multi-tower CityCenter and the Bellagio -- on the west side of the Las Vegas Strip. "It makes sense that the Cosmo at least has a hotel partner to help fill the rooms," Union Gaming analyst Bill Lerner said in a research note. "Having access to the Marriott database is likely to put some incremental pressure on incumbent high-end operators who would likely have fared better (for both rate and occupancy) under a scenario where Cosmo operated the hotel with no affiliation." Strip operators have struggled to keep hotel rooms full as the recession hit consumer and business spending at the same time new resorts have opened.
Most of the gambling corridor's resorts are run by four companies -- MGM, Harrah's Entertainment Inc, Las Vegas Sands Corp and Wynn Resorts Ltd. John Unwin, the Cosmopolitan's CEO, said he plans to price rooms near the level seen at peer properties like the Bellagio, Sands' Palazzo and Venetian, and Wynn. He expects the new resort to draw business with its unique, compact footprint -- 8.5 acres, compared with the nearly 80-acre size of some nearby resorts -- as well as its terraced rooms and Strip-front placement. "The casino literally goes right to the sidewalk," Unwin said. "You don't have to walk up a long hill or a ramp." CityCenter's December 2009 debut added 6,000 high-end rooms to the Strip.
Other projects, such as the partially built Fontainebleau, are expected to remain on hold, maybe for years, until the market recovers. The number of hotel rooms in Las Vegas rose 5.3 percent from a year earlier to 148,524 at the end of June, according to the Las Vegas Convention and Visitors Authority. Average daily room rates were nearly flat year-over-year in the first six months of this year at about $96, but were down more than 27 percent when compared with 2007's average of $132, according to the city's travel bureau. "Pricing is certainly not what it was in 2007, but there are a lot of good signs," Unwin said. "Group and convention business has been picking up." Marriott, the largest U.S hotelier by market value, operates more than 3,400 lodging properties in 70 countries and territories. (Reporting by Deena Beasley; Editing by Richard Chang and Robert MacMillan) Keywords: MARRIOTT LASVEGAS/ (deena.beasley@thomsonreuters.com; + 1 213-955-6746) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.
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