Cosmopolitan of Las Vegas to link with Marriott for customers as part of hotelier’s portfolio

Cosmopolitan in Vegas partners with Marriott Int’l

LAS VEGAS — The Cosmopolitan of Las Vegas hotel-casino is joining forces with Marriott International Inc., giving Marriott loyalists an option to stay on the Las Vegas Strip and the Cosmopolitan a head start on attracting customers.

The under-construction resort on Wednesday said it has sealed a distribution agreement with Marriott to be part of its Autograph Collection, a set of independent upscale hotels the franchiser launched last year.

The partnership gives the nearly 3,000-room Cosmopolitan access to Marriott’s vast customer database, and gives its 33 million members their first Las Vegas Strip option to stay and win rewards points.

“A lot of those customers are going to Las Vegas every year and not staying in a Marriott product,” J.W. Marriott, Marriott International’s CEO, told The Associated Press. “Now they can go and stay in a Marriott product.”

John Unwin, Cosmopolitan’s chief executive, said the deal would broaden its share of customers and drive its growth.

“I have direct marketing access to those folks and that’s across all their brands, including the Ritz-Carlton,” Unwin said in an interview. “It gets me a position on the seventh largest retail website in the world and by far the largest in terms of hotels.”

Cosmopolitan officials say it will be the largest resort in the Autograph Collection and its only property with gambling.

Marriott International has more than 3,400 properties in 70 countries and territories. It franchises hotels under several brands, including Marriott, Renaissance and Ritz-Carlton.

Unwin, Marriott and Marriott International COO Arne Sorenson declined to disclose details of the deal, but Sorenson said Marriott would earn a portion of the hotel’s room revenue as a fee.

Sorenson said typical distribution deals end up at roughly 5 percent to 6 percent of room revenue, but can vary.

Sorenson said Marriott would not get any of the Cosmopolitan’s gambling revenue.

Unwin said the Cosmopolitan, which plans a 100,000-square-foot casino, would have a separate loyalty program for gamblers.

The $3.9 billion Cosmopolitan is owned by Deutsche Bank. It is expected to open Dec. 15, although one-third of its rooms won’t be completed until later.

Observers of the tourism industry in Las Vegas are keeping a close eye on the Cosmopolitan because it’s likely to be the last new casino-resort to open for a few years, and it’s opening in a market struggling to attract customers and maintain profitable room rates.

Most of the properties on the Las Vegas Strip are owned by the world’s four largest gambling companies: Harrah’s Entertainment Inc., Las Vegas Sands Corp., MGM Resorts International and Wynn Resorts Ltd. That means the Cosmopolitan is opening amid fierce competition in a market that drew 18.5 million customers during the first six months this year.

The Cosmopolitan’s opening will push Las Vegas to more than 151,000 hotel rooms, and before the Marriott deal, it was starting from scratch on customers.

Analyst Bill Lerner of Union Gaming Group said the partnership makes sense for a resort that has decided to handle the casino on its own.

“Having access to the Marriott database is likely to put some incremental pressure on incumbent high-end operators who would likely have fared better under a scenario where the Cosmopolitan operated the hotel with no affiliation,” Lerner said.

Lerner said the move could also mean the Cosmopolitan’s room prices will shift upward.

Marriott earned $119 million, or 31 cents per share, during the second quarter, tripling its profit from the same period one year ago.

Shares of Marriott rose 15 cents, less than 1 percent, to close at $32.16 on Wednesday.