Hotel muscle sells Strip

Various room rate promotions offered along the Strip boosted business but not profits.

A night at the Bellagio now costs the same price that a night at the Sahara cost a few years ago. However, extra dollars left over aren’t ending up inside slot machines or on gaming tables.

Revenue per available room — a nontraditional figure Wall Street uses to gauge Strip profitability — has remained stagnant.

That’s why agreements allowing Strip hotel-casinos to attach themselves to large hotel corporations with domestic and international reach is a growing trend.

In August, Cosmopolitan of Las Vegas leaders signed a deal with Marriott International to list the property with the hotel chain’s luxury resort Autograph Collection.

Analysts said the move was genius.

The Cosmopolitan opens Dec. 15 without a database and is not run by a major hotel-casino company with multiple properties. The resort is now part of the 32 million-member Marriott customer loyalty and rewards program.

Last week’s announced alliance between Las Vegas Sands Corp. and InterContinental Hotels operator IHG is receiving similar plaudits.

InterContinental has a database of 52 million members in its rewards program. The company has 4,500 hotels worldwide. Now, customers can redeem their points at either The Venetian or Palazzo.

InterContinental’s Americas President Jim Abrahamson said Las Vegas is the No. 1 requested destination by his company’s guests. The 10-year deal with Las Vegas Sands gives InterContinental clientele access to 7,000 hotel rooms on the Strip.

It didn’t take Las Vegas Sands executives long to recognize the relationship’s potential.

“This will be the difference between lower occupancy and full occupancy,” Las Vegas Sands Chairman Sheldon Adelson said.

Through August, hotel occupancy in Las Vegas averaged 81 percent. There are 148,422 rooms, 5 percent more than in 2009. The average daily room rate for the year is $94.02, up 1.3 percent. In 2007, room rates hit a peak average of $132.09 a night.

Las Vegas Sands President Michael Leven said increased demand from InterContinental could boost the price of rooms at The Venetian and Palazzo. Also, the Strip casinos will gain exposure from IHG’s global sales staff of 8,000.

In both the Cosmopolitan and Venetian-Palazzo deals, the hotel companies will market the Strip resorts through their websites. Casino customers can also join the different rewards programs and receive added benefits.

“This is an agreement that can produce a lot of business,” Leven said.

Howard Stutz’s Inside Gaming column appears Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. He blogs at lvrj.com/blogs/stutz.