One of the 2 towers that make up the Cosmopolitan Las Vegas

It’s been a very interesting journey for the Cosmopolitan – starting back in 2005 with the announcement that it would be managed by Hyatt Hotels, then after the original foreclosure and take over by Deutsche Bank, it was heavily rumored to be turned into a W Hotel.. Then after Ross Klein left Starwood to join Hilton Hotels – it was an open secret that the Cosmopolitan would end up being one of the first Denizen hotels, and well – we all know where that went.

It’s a huge win for Marriott, a big loss for Hilton – who was originally hoping to come into the marketplace swinging with the Cosmopolitan as a Flagship Denizen property, and Starwood still doesn’t have a presence in Vegas for its W Hotel brand, a location which would be perfect for the W.

This is a huge step for Marriott because it gives them a huge appearance front and center on the Vegas Strip – up until now Marriott had no boutique or architecturally significant properties in Vegas. It’s also going to assure that the property will be managed by an experienced group and will be frequented by many people who are just looking for a place to utilize their Marriott Rewards points.

I’m really curious to see how the Ritz-Carlton tie in will appear, I have a feeling that one of the two towers may be catered toward Ritz-Carlton guests, be a bit more high end, but we’ll see how that ends up playing out as time goes on.

andrew@alconic-inc.com

My friends over at VegasChatter seem to think this could be the first Barry Sternlicht-ing of Vegas since the days he used to operate CaesarsWorld in the 90s. I’m not so convinced.

Sure, Sternlicht and Starwood have been involved with trying to take over the Riveria for years now.. Just do a Google search for Rig Acquisitions Sternlicht and you’ll see what I mean. But there is something else that Sternlicht sees in the property – it can’t be the building, its small compared to the rest of the Vegas casinos, its not in the ‘heart’ of the Strip – in fact its almost in no-man’s land compared to CityCenter and other ‘it’ casinos; its surrounded by the unfinished shells of Echelon Place & the Fontainebleau and casinos of yesteryear like the Las Vegas Hilton & Circus Circus.

It could very well be that Sternlicht sees the potential in the site come, 10 – 20 years when projects like Echelons Place or The Plaza ever get off the ground (if they ever do that is!)

Or.

Sternlicht could just see a good deal.. after all, the Riveria has been on its last legs for a few years now – before any economic downturn even started, and buying a mortgage for 50 cents on the dollar, well.. that’s just a good investment, and that’s really what Starwood Capital is all about.

andrew@alconic-inc.com

To amend and restate the Certificate of Incorporation of the Company to change the name of the Company from “MGM MIRAGE” to “MGM Resorts International” 

This change, if approved (and it most likely will) will take effect immediately – in fact MGM Mirage already has the new domain name up and running – just redirecting to their current site. (http://www.mgmresortsinternational.com) 

As companies grow and evolve over the years – its sometimes necessary for them to change their name to better reflect the direction they are heading in. Some examples which come to mind are Apple Computer changing to Apple, Inc. in January 2007, or who could forget Radio Shack’s corporate name from 1963 until May 2000 - Tandy Corporation. 

There has been some speculation that the reason MGM is dropping the Mirage name is to distance itself from Steve Wynn, who sold Mirage Resorts to MGM Grand, but that sounds too much like a conspiracy theory when it looks like all MGM is trying to do is better reflect their growing stable of businesses and international footprint. 

When MGM Grand, Inc and Mirage Resorts, Inc first merged, each property contained gambling, and was located within the Continental US. Now, MGM-MIRAGE now has a number of non-gambling properties in the planning stages, and they’ve also started to franchise some of their brands through MGM-MIRAGE Hospitality. Plus their footprint now reaches beyond the shores of America from Dubai, to Vietnam and Macau. 

An example of the MGM brands being franchised can be found in the Dubai Pearl development, where they are constructing Bellagio Residences and Hotel, MGM Grand Hote and a Skyloft Hotel (based upon the Skylofts at MGM Grand in Las Vegas.) Two brands that MGM-MIRAGE Hospitality has not really provided details on is their mx and emblem brands which were mentioned in a profile done by Hotels Magazine back in 2008, but that magazine has since shut down their website. 

While I’m sure the brand recognition will help fill these hotel-only resort properties, I think it will be interesting to see how people will respond to going into an MGM Grand w/o being able to gamble. 

andrew@alconic-inc.com 

I just came across this short article from the NYPost this afternoon which says that the designers of the Long Branch Beachfront Boutique Hotel Bungalow is creating a second hotel to be called “Cabana”.

One thing the article doesnt mention is where on the Jersey Shore this second hotel will be built, but I can guess that it will be built on the same property of Bungalow within Pier Village III. The only other location I can picture it is Long Beach Island or even in Asbury Park. (That would be huge!)

Two years ago I followed the opening of Bungalow very closely – and it was a very successful hotel fulfilling a niche market right on the beach in Long Branch, hopefully Cabana will further the boutique hotel market on the Jersey Shore

andrew@alconic-inc.com

Not too many details have been released about this transaction – including the cost of the transaction – but both companies claim that Starwood will contribute both capital and deals to Hersha Hospitality Management.

Starwood’s purchase of just less than a controlling interest gives them easy access to a great hotel management company – enabling them to not have to staff up and create the SH Group as a leading management company from scratch, it also provides Hersha, a private company, with some capital as well as great management opportunities that Starwood Capital is privy to due to its own investments.

HHM specializes in select-services brands – as that makes up almost 75% of their portfolio – although in the press release its stated that HHM and Starwood will look for both select and full-service contracts. It’s interesting to note that Barry Sternlicht has said in the past that the opportunities in lodging at this point are more in the mid-scale/select services vs high-end luxury. Most of HHM’s properties are branded by the majors – IHG, Marriott, Hilton and Starwood, but lately they have been managing more independent boutique hotels, especially in New York City.

It’s hard to say exactly what this transaction means for Starwood Capital’s own SH Group, 1 Hotels & Baccarat Hotel brands, but its obvious that this will benefit both Starwood & HHM by providing each party with a service that they need. One change I can see this transaction enabling HHM to do is cast a wider net increasing their geographic service area – currently HMM manages properties encompassed within the triangle which goes from Boston, MA, to Virgina to Pennsylvania.

Today was the first day of the Annual NYU International Hospitality Industry Investment Conference, so this could be the first of a few good deals that are announced, and hopefully more details will be provided.

andrew@alconic-inc.com

Hotel News Now reported:

Charles A. Gilman, an attorney for Starwood, said in a 16 November court memo that “the parties have been exploring the possibility of settlement.” A case management conference scheduled for 18 November has been pushed back to 17 December

Hopefully on December 17th we’ll have more information as to what the status of the Denizen brand will be (99.9999% sure it will be completely canceled) but I’m more interested in seeing what the repercussions will be for Hilton.. Will Starwood simply be happy with the cancellation of the Denizen brand and the firing of all former Starwood employees? Or will they want a monetary payment?

Even though the complete details about the settlement will not be released, Starwood & Hilton will most likely send out some type of a press release giving some details so as to close the book on what could have potentially been huge ramifications to Hilton’s business.

andrew@alconic-inc.com

Louvre Hotels is one of the pioneers of franchised hotels and has long experience, built over 150 years through its parent company Société du Louvre, in the hospitality business and franchise development.

Louvre Hotels dates back to 1855 when the Grand Hôtel du Louvre opened in Paris. In 1879 the owners of the next door clothing store, Les Galeries du Louvre, bought the hotel, expanded the store and moved the hotel operation to where the luxury Hôtel du Louvre stands today.

In 1889 the company opened a second hotel and adopted the name Société du Louvre. Twenty years later, the most famous Concorde property, the Hôtel de Crillon, opened after refurbishment. By 1930 the company was listed on the Paris Stock Exchange.

In 1970 the luxury hotel portfolio was grouped under the Concorde name and six years later Société du Louvre acquired its first budget hotel chain, Campanile. Campanile forms the basis of Louvre Hotels budget hotel offering. It is arguably Europe’s best-known hotel brand, benefiting from a 30 year history, and was joined by Première Classe in 1989 and the brand offer completed by the creation in 2000 of the Kyriad and Kyriad Prestige brands.

Read the article here in its entirety.

The excerpt above doesn’t mention how Golden Tulip was purchased by Starwood Capital earlier this year and has since been merged into the Louvre Hotel Group. They’ll spend the beginning part of next year integrating Golden Tulip’s systems, and I think we’ll see Golden Tulip and Tulip Inn’s become sister brands with the Concord, Kyriad, Kyriad Prestige, Campanile, and Premiere Classe brands which already make up the Societe Du Lovure portfolio..

andrew@alconic-inc.com

Post Card Inn on the Beach is a unique hotel located in St. Pete’s Beach, FL (not St. Petersburg) in what used to be an old TravelLodge. Starwood Capital had purchased the property a number of years ago to build a high end luxury hotel (1 Hotel?) but the town wouldn’t approve it mainly due to the building height they were asking to build.

Since then, Steve Hanson, the President of B.R. Guest Restaurants suggested to Barry Sternlicht to open a smaller hotel on the property – utilizing the existing building, and doing a major cosmetic renovation. The result is the Post Card Inn at the Beach, featuring a WildWood BBQ & Grill Restaurant (the second WWBG in the B.R. Guest Empire) and a hotel which has a very laid back, beach theme – with a price point at about $149 a night. It’s not Super 8 prices – but its not Westin/Hilton at destination location prices either.

Even though B.R. Guest is owned by Starwood Capital – Post Card Inn is mainly a B.R. Guest operation. Steve Hanson created The James hotel in Scottsdale, AZ in 2004, and begun work on its sister property The James Hotel in Chicago. He’s no longer affiliated with The James – of which the Scottsdale one was purchased by Morgans Hotel Group and has been converted into the Mondarian Scottsdale.

Where the Post Card Inn will go from here isn’t really known; Sternlicht inferred in his interview that the Post Card Inn will be a brand, and the press release has inferred that as well. I’m just not sure that you can really replicate a hotel like this (surfing-type) easily in multiple locations – especially within the United States where the ocean can’t be reached for hours. Then again – a brand doesn’t have to mean hundreds of hotels – it could be simply a few locations in towns by the beach up and down the East and West Coast.

With someone like Barry Sternlicht and Starwood Capital involved behind the scenes – crazier things have happened..

andrew@alconic-inc.com

I accidently came across this interview today – live – while looking for a picture of Barry Sternlicht & Steve Hanson ringing the opening bell at the NYSE this morning.

Wow. I’m glad I did. (Archived version of web cast should be available here)

Maria Bartiromo, interviewed Barry for about 15-20 minutes where he gave a lot of interesting insight into how he became successful and how he looks at the world and how he became who he is today.

• Sternlicht started Starwood Capital at 31, after losing his job in real estate, and being completely broke, very humble beginnings.
• He created Starwood Capital because he loved real estate and he loved finance, and he loved design and architecture “if you can make money doing something you love – that’s great”
• Says never give up and keep trying, failure is good. If he didn’t fail with his real estate job before Star Cap, he would not be where he is today.
• When he put together Starwood Hotels, he always dreamed of starting W, a contemporary, modern, hotel chain – the likes of which were not seen before at the time.. Getting Sheraton and Westin together were just a way to the means to be able to build W.
• Made a short comment that I’m still researching.. I thought he said “We launched a new hotel brand, Place Card Hotels..” (I think that’s what he said – then mentioned the city, which I can’t remember) “and just opened the first location on Saturday..” Cant find any information about it anywhere. Anyone have any information?
• Started the Westin Heavenly Bed after his wife fell in love with a mattress from 1-800 Mattress. Thought – why can’t hotels have a mattress this comfortable? They’d pay an extra 20 bucks a room for it. When it would only cost the hotel an extra $.50. Now almost everyone has followed suit.
• Created 1 Hotels as a way to be environmentally conscious. Side benefits – employees & guests would self select.. Employees would search out top work for 1 Hotels to “do good” Guests would go after the brand which actually does good, rather than go to a hotel “which doesn’t wash towels every day and calls themselves environmentally conscious.”
• Guests who go to a 1 Hotel will take the experience home with them – creating the ability to sell things to guests after they leave.
• Sternlicht made an interesting sidenote about 1 Hotels, which demonstrates his humility; while talking about 1 Hotels, he said “We have yet to create one yet.. But you just don’t quit..”
• Made an excellent mention about being passionate about something – and using social media, including blogs to talk about that.. Says.. If you’re passionate about something, talk about it online – social media, create a blog, the people who share your same passion will come to you..

Well said Barry. I’ll hopefully be hearing from you soon.

andrew@alconic-inc.com

The benefits for those hotel owners is the ability to tap into Marriott’s excellent supply chain, taking advantage of the discounts that Marriott gets because of its large buying power. The real benefits that will put actually put more heads in beds is allowing guests to earn or redeem Marriott Rewards points for their stays as well as the exposure the hotel will gain by being part of Marriott’s reservation system.

It’s interesting that Marriott would choose to go this route – historically Marriott prefers to heavily brand their properties and supply each property with plenty of Standards and Procedures. Although hotels in the Autograph Collection will still have to meet certain criteria to be part of the group, they are not requiring every hotel to have the same type of sheets or serve the same type of breakfast selections as you’d find in a Courtyard or Marriott.

I really dont see any major downside to this new “Brand” but I think it will be interesting to see how many people will stay at an Autograph Collection hotel when all they were looking to do was stay at a Marriott or Courtyard. Marriott has owned Ritz-Carlton for years, and has not really integrated Ritz Carlton’s marketing and reservations with that of Marriott’s. I think the reason being that associating Ritz Carlton so close with Marriott may cheapen the brand.

On the other hand, I can see a hotel which is part of the Autograph Collection emphasizing its affiliation with Marriott – giving a guest who has otherwise never heard of the hotel enough trust (via the Marriott affiliation) to stay at the hotel.

Marriott is saying that they will have at least 25 hotels under the brand by the end of 2010; I’m really interested to see what these hotels will be like. Will the Autograph Collection be similar to Starwood’s Luxury Collection – very high-end properties in spectacular locations – or will it hold it’s own and have a unique mix of everything from 50 room modern boutique hotels, to 200-year-old historic properties?

We’ll have to see.

andrew@alconic-inc.com