Whew, what a week for the Cosmopolitan Hotel in Las Vegas. This project never ceases to amaze me because right when you think that something is set, another event occurs, throwing everything into disarray.

The big news earlier this week were reports that Deutsche Bank was going to exchange the Cosmopolitan property with MGMMirage, and in return Deutsche would receive an equity interest in the MGM City Center development. By the end of the week it looks as though talks broke down and Deutche Bank wasn’t able to come to agreement about the transaction – but it would be a great combination of assets. Deutsche Bank would finally be happy with an investment that makes sense and combining CityCenter with the Cosmopolitan would add to the value of the Cosmopolitan and make them all one property – which I think they should have been from the start. Unfortunately, some of the marketing aspects of CityCenter will not be realized with the Cosmopolitan – for example the LEED Certification and the sharing of services between CityCenter and Cosmo.

MGM’s credit situation is a little scary, they’ve had to borrow from their credit line recently, and the overall economy – especially in Las Vegas is not getting any better. I’m not sure what this means for the future of MGM, besides the fact that CityCenter will still be completed, but the company may look different in a year or two – probably smaller through the sale of additional properties.

The next big story about the Cosmopolitan is made up of two seperate, but probably related events. The first is reports have come out saying that Deutsche Bank is “displeased” with the interior decor of the Cosmopolitan, thus are redoing the interior of the buildings, laying off alot of construction workers. From the Las Vegas Sun, this would be the third redesign of the Cosmo’s interior, the new designs are supposed to be released this coming week..

Which brings me to another event; who will manage and brand the hotel component of the Cosmopolitan? Hyatt has been out for months, and it was widely expected that Starwood would be taking over, they have a good relationship with the Related Co’s which is now in charge of finishing the construction, and Starwood is probably dying for a W outpost on the Strip since the W Las Vegas was canceled a few years back. I received a comment on my blog about Hilton taking over the management, and then VegasTodayandTomorrow.com has also reported that Hilton is going to be doing the management, predicting that it will be a Conrad hotel..

But I differ.

Am I the only one who has noticed the timing of all these announcements suddenly?

1. Deutsche Bank is ordering a redo the interiors which are supposedly being finalized this week (what does a bank really know about interiors of a resort?)  – plus it’s odd the design changes are being attributed to Deutsche Bank and not Related Co’s who is in charge of the construction.
2. Hilton signing for the management of the hotel.
3. March 10th – the announcement of Hilton’s Project Global 21.

I have a feeling that the Cosmopolitan will be one of the first locations of Hilton’s Project Global 21 hotel brand. It makes sense, plus all talk of the W at the Cosmopolitan stopped when Ross Klein went from Starwood to Hilton last year

I could be completely off – but my deductive reasoning says otherwise.

andrew@alconic-inc.com

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