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 a news article about a Kmart store in Iowa City, Iowa which is testing a new concept – a laundromat which will be on the side of an existing Kmart, it will be called “Kwash”

The chains intention is to draw additional shoppers and their time by offering low cost laundromat services. While their clothes are being washed, they can shop in the KMart store, or vice versa. In addition the laundromat area will have free wi-fi.

Kmart is testing the concept in Iowa City, Iowa because they feel the demographics are right there for this type of service, and its hoped that more people will shop Kmart because of the service. It’s interesting that Kmart is pursuing this because the type of demographic which utilizes laundromats is typically on the lower end of the income spectrum.

Its no secret that Kmart is quickly losing the battle of the discount stores, with WalMart & Target putting more and more money into their stores to make them appealing tot he customer, whereas Kmart is essentially letting their stores rot.

WalMart & Target also are increasingly going toward the higher end customer – WalMart is starting to bring in name brands that typically would not be found in a discount store and Target (often referred to as ‘TarJay’) has been catering toward the higher end clientele during its exponetnal growth over the past few years.

Kmart and Sears Holdings are beating to their own drum, and it will be interesting to see how the chain/company hold up a year or so down the line, – especially since their recent earnings showed over a 25% drop in income. Trying to bring in more and more customers who are only looking for bargains is not going to bring them out of their doldrums.

Although, it may give them good exposure for their Kenmore washer and dryers – but then again, those are the same people who probably won’t be buying them anytime soon either.

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

From their press release:

Starwood Capital, through an affiliate, announces today that it has completed the acquisition of Golden Tulip Hospitality BV’s Franchise business, its Development & Representation businesses, Joint Venture interests, and the brands, trademarks and intellectual property of Golden Tulip, Tulip Inn and its related brands.

There still needs to be integration done to combine Golden Tulip into the Louvre Hotel Group’s franchise business – but I’m sure that will happen in due time.

One item the press release didn’t touch on is if Starwood Capital is actually going to be owning any of the actual Golden Tulip hotels. Originally it was stated that they were purchasing around 250 Golden Tulip locations (out of over 700 which the Golden Tulip brand managed), or if its purely a non-real estate purchase.

Starwood Capital is a very real estate heavy company, but their hotel group has been leaning more toward the franchise and management end of the business – and less on actually having complete ownership of the properties.

andrew@alconic-inc.com

Yes, that’s correct, and that’s the same thing that Sillerman stated – although I didn’t make it sound as bad as he did.

I came across this story in the NYPost where Sillerman stated:

I think I have shown conclusively that I am not knowledgeable enough about the real estate business..

That’s not to say that he had bad ideas – one idea, which consisted of building a huge Elvis themed resort on land his company owned on the Las Vegas Strip – directly across from MGM’s CityCenter sounded like a slam dunk.. I mean what else would be better in Vegas than a high quality Elvis themed resort from the person who owns Graceland and the rights to Elvis Memorabilia?

His second project was a resort to be built in Anguilla; this is how I first learned of Sillerman and Flag Luxury as the project was initially going to be a St Regis Resort, then a Baccarat Resort. Now the project is all but dead – construction has not started, and the golf course which was to be the centerpiece of the resort destroyed because Sillerman decided to stop spending $200,000 a month to water the course. Not only that but he claims he has put over $200 million of his own money into the project – much more than the original $15 million he had agreed upon.

I give Sillerman alot of credit for having the guts to stand up and admit defeat, something that’s very hard to do especially in such high profile developments such as these.

There is no word on what Sillerman will do next, but it sounds as though his entire investment in the Anguilla property and the Las Vegas Strip property will be lost. The strip property was foreclosed upon a few months ago and the Anguilla property is going through the same property.

Most likely the strip property will be purchased very inexpensively by an investor and held onto for a number of years until the Las Vegas economy picks up – then the next biggest thing will be built. As for the Anguilla property, it sounds like that will go the same route.

andrew@alconic-inc.com

Back in April, Starwood Hotels sued Hilton Hotels, and two of their employees – Ross Klein and Amar Lalvani for taking trade secrets and confidential information to build the Denizen hotel brand. At the time Hilton came back with their standard boiler plate response to a lawsuit “we feel this suit has no merit and will vigorously defend it” – but I think it was clear that they really had no leg to stand on.

Since that lawsuit was filed Hilton was ordered to stop all further development or marketing of the Denizen brand and they put alot of the employees within Hilton’s Prestige Portfolio’s development team on paid administrative leave – the same employees who had worked at Starwood’s Luxury Brands Group under Ross Klein.

Hilton has pretty much removed all references to Denizen from their websites and press releases and taken down the Denizen Hotels website – but no official word from Hilton or Starwood has come out about Denizens actual fate.

For a comparison – Hilton’s other recently announced brand – Home2Suites has already been integrated into the brand bar at the bottom of all Hilton Family web pages.

Most likely Starwood & Hilton will do an out-of-court settlement which will force Hilton to scrap anything having to do with the Denizen brand, start from scratch on a new boutique brand, and fire the employees who used to work at Starwood then moved over to Hilton. The alternative is a long and protracted legal battle that Starwood is almost definitely going to win.

Hilton was dumb, they put themselves in a precarious position and because of that will end up having a black-eye within the industry and end up even further behind in creating a boutique hotel brand. At this point Marriott’s Edition is looking better than Denizen, even though Denizen apparently had more contracts under negotiation and more work done Edition did in less time. Then again – Denizen’s development was sped up by the use of Starwood’s confidential documents.

It also leaves to question the status of the projects which were expected to include a Denizen – first and foremost, the Cosmopolitan Resort & Casino in Vegas. That project has seen more high-profile problems and issues than anything I’ve ever seen before. I suspect yet another delay in the project and yet another hotel brand (perhaps W?!).

My friends over at HotelChatter have also been following the Denizen saga, so you might want to read up on it over there as well.

andrew@alconic-inc.com

MGM Mirage MX Logo

The first is MX which will be MGM Mirage’s lifestyle hotel brand.

Think: MGM Mirage’s version of the W.

There is very little information about the MX brand, but one of the most forthcoming sources is MMH’s website where a brochure can be downloaded that includes the logo and a few paragraphs on the brand. I’ve cut and pasted the description of the brand below

MX will be the contemporary, design forward, urban-chic hotel of the new century with a young,
edgy and energetic vibe. Created to stimulate the imagination and push the boundaries of art
and design, MX provides an experience filled with novelty, discovery and surprise. In doing so,
MX becomes the clear choice for a distinct and powerful crowd of progressive thinkers. The
bold and edgy surroundings challenge the senses and invite guests to explore the sensory
playground of MX.
MX will delight culturally savvy visitors with a five-star experience built on thought-provoking
design and studded with awe-inspiring details. From the spa to the restaurant to the bar, each
space offers a new twist to discover. Guests are kept in constant exploration, which is in itself
exciting, fulfilling and unique.
To complete the experience, MX is staffed by extroverted and knowledgeable people who
are able to make relevant suggestions and contribute to each guest’s quest for discovery and
conversational content. They achieve this while simultaneously delivering flawless service
and savoir-faire. Those who stay at MX may leave with the impression that they have finally
seen it all, but when they return a few months later, they quickly find that a whole new
experience awaits.

The text above isn’t all marketing speak using big words (very odd in the hotel industry), as it sets some definite goals they have for the brand, and wow – they have set the bar pretty high.

There are three points that stick out to me in the description of the brand: Extroverted employees, different experience upon return, focus on the senses.

Extroverted Employees

W Hotels is famous for having unique employees who believe in the brand and are a major part of the brand, so much that their vocabulary focuses on words that start with “W”.  The Industry Standard is also unique by having some of their employees dress as nerds (in my opinion, others would have another word for it).

But MGM is looking for extroverted people to work here, (for those who need a refresher, the definition for extroverted is: “Marked by interest in and behavior directed toward others or the environment as opposed to or to the exclusion of self; gregarious or outgoing”)

Maybe I’m reading into it a little too much – as every hotel really would like all of their employees to be extroverted, I mean who would want an introverted front desk employee, or bellhop? But MGM is taking it to a new level by actually stating that front and center. It also leaves those who are introverted on the sidelines – should they even consider applying? Not everyone is an extrovert, and that’s ok – not everyone has a Type-A personality. I’m curious to see how that will pan out once something comes of the MX brand.

Different Experiences Upon Return

This point is interesting because from the way its written, it seems as though every few months the hotel will go through a top down renovation – new colors, furniture, smells, artwork, art, etc. Is that even possible? How cost effective would that be? W Hotels once again is the example I’m going to use, every few years each W seems to go through a complete renovation of the rooms and public areas, W Chicago City Center was one, W New York, & Times Square are some examples which just completed their renovations in the last year – but even W only does it every few years, and I’m sure that cost plays a big part in that.

I’m really interested to see what these “experiences” will be, and how will they will integrate into the whole brand and the physical space that the hotel is built in. If MGM is somehow able to successfully and cost effectively change the hotel a few times a year without the hotel’s price point being sky high it’s a hotel industry game changer.

Focus on the Senses

Reading the description of MX reminded me of LeMeridien’s focus on LM100, which was their way of becoming a cultural hotel, having artwork, sculptures, food, music – everything that touches the senses come alive inside the hotel. It seems as though MGM Mirage is trying to do the same for their MX brand, which is great, but I’m curious as to what the marketing speak of “surprises” will entail. Will butlers pop out of the walls with champagne? Will you walk in the room and wonder what music will be playing this time?

Lastly, is it any coincidence that the MX logo (above) slightly resembles a lion, which is MGM Grand’s famous emblem?

Which is once again ironic, because that’s the the name of their second brand..

The second brand is “Emblem”.

I’ve found even less information about Emblem – the last mention of it occurred in May 08 in a blog post from Hotels Magazine, where it was mentioned as an “ultra-luxury” brand. I haven’t seen anything else about it, so its possible that it was canceled due to the economy – its worth mentioning that MGM already has an ultra luxury brand – “The Mansion” which is a part of the MGM Grand in Las Vegas, it has its own private entrance and is completely separate from the main building. Perhaps this was to be a re-branding of The Mansion?

Conclusion

It’s interesting that MGM Mirage is putting so much into their MGM Mirage Hospitality division by coming up with new hotel brands that they can open throughout the world that don’t have a casino component like all of MGM’s current properties do (or at least are closely affiliated with). Once the economy and travel picks up again – MGM Mirage may be a viable competitor in the non-gaming lodging industry, although it will take years for them to get to the scale of any of the majors.

andrew@alconic-inc.com

Not much has been said about these new positions – the information was gleaned from an interview that Derek Gale, a writer from Hotels Magazine had with W’s Vice President of Brand Management.

W’s marketing focus will move even further toward events, with more fashion programming (like W’s backstage lounge at New York’s Fashion Week) and music release parties in cities across the globe.

The fact that they are willing to hire someone to be a music curator and a fashion director – for a hotel brand – speaks volumes about the direction Starwood sees W going in. It’s similar to what Starwood did with the LeMeridien brand when they started LM100, and its no coincidence that W’s new boss is Eva Ziegler, whose previous position was brand director at LeMeridien.

Alot of people may ridicule the W brand because of their attempt to be trendy and as well as their “commercialization” of the boutique hotel concept, but no matter what anyone says – they are very successful at it. Unlike some hotel brands that attempt to open hundreds of hotels a year, W sticks to opening just enough hotels that its still able to capture the feeling and the essence of W.

Some boutique hotel companies may do the boutique feel a little better – Thompson Hotels is the first that comes to mind, but their individual hotels are not part of one name-brand. Indigo Hotels is another brand that claims it’s a boutique and tries to give the boutique look and feel – but the segment the brand is in, and the acceptable standards that the hotel has would never reflect a true boutique brand. Not to say that Hotel Indigo is not a quality brand – it is, but it doesnt have the amenities that W would have.

For the majors, Starwood, Marriott, Hilton, Choice, Intercontinental, Wyndham - Starwood is still the only hotel company that has a real boutique hotel product in the market today. Hilton’s Denizen seems DOA, Marriott’s Edition is taking so long to get off the ground I’m wondering if it’s going through some major modifications, Wyndham & Choice don’t even look to be interested in a high-end brand, and Intercontinental has Hotel Indigo.

It’s going to take a lot of catching up to do for any new or existing hotel brand to eclipse the W as hotel brand that’s easy to replicate (relatively speaking of course) and has so many tie ins and marketing kicks that one-up W in the marketplace. The experience and the knowledge that Starwood has on W is tremendous – and a perfect example of that is the value placed on it in the pending Starwood/Hilton lawsuit.

andrew@alconic-inc.com

Apparently, it’s become a huge failure and embarrassment.

Within minutes of my post yesterday I received a number of comments, describing some problems – not just minor ones mind you, major problems for people who do their banking with Metro Bank. We’re talking about debit cards suddenly being canceled for no reason and with no warning, scheduled bill payments lost, bill payments being credited to accounts more than once, direct deposit paychecks not appearing and worst of all – customer service wait times of an hour, and then when you do get a hold of someone – no one has any idea of whats going on.

I even found a blog post where someone described his personal experiences in detail – and it was one problem after another – even the Updates he posted later in the day were additional problems!

I’m really surprised the mainstream press hasn’t picked up on this story yet.

Whats so crazy about this is how a bank can go from full working order on Friday, to being in complete in disarray by Saturday – its not like it was two banks being merged into one (understandable – but still – unacceptable), the employees are the same, the physical banks are the same – it was a complete computer meltdown. Not only that, but there was absolutely no warning that the website would be down on Saturday, and the general public had no idea that there could be issues like this.

Sounds like this is all due to their computer systems being switched to fiserve - an announcement made in mid-January of 2009 when Gary L. Nalbandian, Chairman, President and CEO of Commerce Bank/Harrisburg-Metrobank said

“Our challenge was to identify a partner that could provide a complete solution — from core system hosting to item processing, from electronic banking to data warehousing — with a conversion process that enables us to uphold our renowned level of customer service,”

It seems as though the fiserve conversion occured on Friday after business close and was expected to be finished on Saturday or Sunday, but just ended up being a disaster.

Hmm.. Looks like fiserve and MetroBank have a huge PR issue on their hands now. Which is unfortunate for both companies – because fiserve seems to have done this type of conversion before (looking at their news announcements shows a lot of similar deals to this one) and MetroBank is known for their customer service.

Hopefully Metro Bank will be able to recover quickly, and wont lose too many customers, because issues such as losing paychecks, over debiting accounts, and shutting off debit cards without warning is just unacceptable.

andrew@alconic-inc.com