Published by: Michael Friedmann,
The acquisition of MGM Cosmopolitan Las Vegas was a turning point for the company. Not only did MGM consolidate its position on the west side of the Strip, it also chose one of the best hotels with the highest ADR (Average Daily Rate). Your sale of the Mirage helps fund the purchase. In the real world, it's pretty simple. MGM now owns the operations of Cosmo Vegas.
What happens to loyalty programs and partnerships?- Las Vegas cosmopolitan and loyalty
For the rest of us, however, a larger question remains as to what MGM intends to do with its partnership with Cosmo.
First, the Cosmopolitan Identity loyalty program. It is intended for dumping bonus programs. We don't know when, but MGM will eventually get rid of him. It's probably time to reconsider whether to credit your spending to MGM or Cosmo if you decide to go to Cosmopolitan Las Vegas before making the switch. (Bethany in Bougie Miles beforea good analysis.).
Hotel associations are more interesting. For now, Cosmopolitan has a strong relationship with Marriott Bonvoy. Bonvoy members can earn and burn points, receive elite benefits and even use Marriott gift cards to pay the final balance of their bill. Platinums, Titaniums and Ambassadors also have access to the Autograph Lounge, which can speed up your check-in or offer peace and quiet (and coffee!) during the day. Gold members can use the guest line.
It worked very well for Cosmo, taking its hotel to the largest hotel chain in the country, while Marriott benefited from being able to offer an almost luxury property in the center of the Strip. And players can have incentives to bet there, as Marriott and Cosmopolitan Identity members can transfer points between the two programs. Of course, that will end when MGM Identity closes.
The problem is that MGM has a partnership with Hyatt, and it's arguably stronger than the Cosmo-Marriott marriage. There's a win-win between the two of you, and your Hyatt points could land you a room at one of the dozens of hotels on the MGM Strip, including luxury properties like the Delano or Bellagio. But the most important benefit may be the state matching between the two.
Status reconciliation is very valuable, especially when moving from the Hyatt to the MGM. For 10 nights only, World of Hyatt's Discoverist entry level entitles you to the MGM Pearl, which entitles you to free parking. The Explorist, which lasts for 30 nights, translates to gold, resulting in waivers of resort fees, which can add up to a weekday room rate. You can also go the other way (MGM->Hyatt), although the value of the benefits is not as great.
See also: The transition from My Borgata Rewards to MGM Mlife
Did MGM get a good deal? How would we know?Numbers to make geeks.
Gaming company transactions are usually valued as a multiple of EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation and Amortization. Think of it as "a win before all that annoying accounting and governance is done away with." In that case,MGM paid 8x EBITDA, which is usually a very good value. However, there are two things to note:
numbers for geeks
- The number "includes expected operational synergies and identified revenue growth opportunities." This means they expect to lay people off, but still find new ways to make money.
- In fact, MGM does not own the land. They rent to a group of partners who do this. They bought the hotel business and made money there by paying rent to landlords. Even if the casino doesn't make a dime (obviously worst case scenario like a global pandemic or something), they still get a rent bill.
- When selling, Blackstone gave each Cosmo employee $5,000.
What's a casino to do? Not much of anything for now.
For now, MGM said it plans to maintain Marriott's relationship with Cosmopolitan. Without seeing the legal documents, I can't say for sure that Marriott has been in jail for some time, but given the speculation that has always surrounded Cosmo, I doubt that Marriott made it easy for them to get out. an agreement on a change of ownership.
Does MGM really need to bring Cosmo into the Hyatt partnership?
Even take over MGMit couldBringing Cosmo into the Hyatt partnership, do you have any real urgency? Probably not. Integrating even a single hotel will be particularly difficult, and MGM will likely see the partnership issue as a very small tail wagging an awfully big dog.
What will MGM (finally) do? How about harmonizing hotels with Hyatt?- Las Vegas cosmopolitan and loyalty
on aLas Vegas Advisor, Stiff's and George's BlogDavid McKee cited Deutsche Bank gaming and hosting analyst Carlo Santarelli as one of the most experienced analysts. Mr. Santarelli recently met with MGM Resorts management, who indicated that the integration was going better than expected and that the partnership with Marriott was profitable, leading him to believe that "from our point of view, it makes even more sense". given the advantages over a traditional OTA channel.'”*
The consumer expects a certain consistency. Interacting with multiple partners offering different benefits is confusing, and MGM recognizes that. They will eventually transfer Cosmopolitan to the MGM Rewards program, which will spell the end of one of Cosmopolitan Identity's most valuable features, the ability to transfer points to Marriott Bonvoy.
Logically, it makes sense for MGM to merge Cosmopolitan with Hyatt. I suppose you could argue that both Marriott and Hyatt give MGM access to two programs in the system instead of just one, or that the Marriott chain offers many more potential customers than the Hyatt. Both are true. But the cost of maintaining a separate partner just for Cosmo, both in real terms and in terms of customer confusion, will be quite high, and Hyatt is already well integrated into the system. The endgame would be to wait until the Hyatt contract expires and pit them against each other, but MGM will have far more influence over Hyatt than Marriott will, and it probably won't be worth squeezing the juice for our friends in Bethesda. .
Cosmo Plus Marriott has a great benefit: Marriott's Stars and Luminous program
One area where the existing structure has an advantage is the reserve.
The Cosmopolitan is part of Marriott's Autograph Collection, a group of hotels managed by Marriott but not branded. As a luxury hotel, it participates in Marriott's Stars/Luminous program, which is openOnlyto qualified travel agents, includingTravelZork Reisen. Booking your stay through one of these select agencies should offer you the same price as booking online, but also some amazing free perks. Not all full-service properties offer these perks, especially at the Sheraton and Westin level, but anything more luxurious probably does. Even better, you'll still earn miles and elite benefits.
Perks vary by property, but Cosmo is a good example. Receive daily breakfast for two, a $100 resort credit, a welcome gift and free WiFi. And forget the long check-in lines as you can check in at the Autograph Lounge (open 8am-8pm, subject to change). You are also entitled to a room upgrade and early check-in or late check-out, if available.
Virtually all networks offer something similar. ** Hyatt is Prive and Hilton (offers perks at Waldorf, Conrad and LXR only). Again, the benefits are similar.
However, despite its association with Hyatt, MGM did notNOJoin Prive (although you can still book with a qualified travel agent to receive benefits through a network of agents like Virtuoso). If MGM were to integrate Cosmopolitan into its Hyatt partnership, we would likely lose out on these extra perks. Of course, with another luxury property in the pipeline, MGM might decide that Prive perks would make a great marketing tool after all...
Hyatt is the logical partnerto cosmopolitan Las Vegas
There are certainly reasons to keep Cosmopolitan in a parallel network, but doubling it as a partnership with Hyatt seems logical to me. The Hyatt would be happy to have an additional luxury property on the Strip, and MGM wouldn't have to deal with the hassles of hosting multiple shows. In particular, it would avoid confusing MGM customers who could deposit (or use) points at a single hotel chain in the same way that they could eventually use their casino loyalty points at any MGM hotel. Due to the acquisition of MGM Cosmopolitan, there is no rush to make big changes, but that could change in the future.
*In the history of Wall Street, no analyst has ever met with a company and later claimed that integration was underway.worsethan expected, knowing that it could be detrimental to his firm's investment banking revenues.
**These benefits are also available at luxury properties worldwide, when booked through a qualified agent. The Four Seasons offers particularly attractive perks. take a look at thoseTravelZork Reisenpage to get an idea of the types of properties participating.