Forging a marketing alliance, MGM Resorts International and Marriott International announced a sweeping new arrangement today. When consummated in October, the partnership will bring 40,000 MGM rooms at 17 resorts under the Marriott hotel-booking umbrella.
“We look forward to increasing our global room distribution by 2.4 percent as we grow our presence on the Las Vegas Strip and in other compelling destinations across the U.S.,” explained Marriott CEO Anthony Capuano.
The gaming-shy Marriott corporation is making its initial major foray into the casino sector with this agreement. The foundation was a co-marketing arrangement between Marriott and MGM at The Cosmopolitan of Las Vegas, inherited from previous ownership.
Said MGM CEO Bill Hornbuckle, “We’ve seen first-hand the strong demand from Marriott International customers through our existing relationship at The Cosmopolitan … and this new agreement will enable us to further optimize our overall profitability. We can now scale the relationship and offer Marriott Bonvoy members greater distribution access to our resorts, as well as exclusive event and entertainment opportunities, in Las Vegas and across the U.S.”
Not all MGM-branded resorts will be immediately available, but should be on tap from Marriott by year’s end. Depending on their luxury bracket, MGM hotels will be flowed into different Marriott portfolios. Bellagio will be in The Luxury Collection, while Aria goes into The Autograph Collection, joining The Cosmopolitan. Park MGM will be a Tribute Portfolio resort.
An “MGM Collection” will subsume the Las Vegas Strip destinations of Vdara, NoMad (part of Park MGM), MGM Grand and its associated Signature suites, Mandalay Bay, New York-New York, Luxor, and bargain-priced Excalibur. A quintet of regional MGM properties — Borgata, MGM National Harbor, MGM Grand Detroit, Beau Rivage and MGM Springfield — will also be MGM Collection members.
Opined Skift.com, “Las Vegas has been a tough market for Marriott to crack, because of the dominance of gaming resorts.” Daily Lodging Report editor Alan Woinski told the news outlet, “MGM is the leader in high-end casino resorts in the U.S. and dominates the Las Vegas Strip in hotel rooms, so it is a natural fit with Marriott.”
The new deal is reciprocal. MGM Mlife members can tap into “select member benefits” at 8,500-odd Marriott hotels and resorts. Reward points will also flow in both directions.
As Marriott enters, Hyatt Hotels exits. The latter’s less-ambitious pact with MGM, now expiring, had enabled Hyatt loyalty-program-enrolled members to advance to higher tiers by joining and spending in Mlife.
Despite Marriott’s traditional aversion to gaming, the company is substantially upping its alliance with the booming casino industry. Marriott members will also be able to wager on selected BetMGM propositions and receive loyalty points for it.
In addition to Woinski, Truist Securities analyst Barry Jonas was quick to weigh in on the transaction. “While some investors have questioned what drives the story beyond [Formula One] and the Super Bowl in February, we think this partnership should drive longer-term sustainable growth,” he wrote. Noting that Las Vegas hotel occupancy had returned to pre-COVID altitudes, Jonas predicted that MGM/Marriott alliance had the potential to push room occupancies even higher.
“MGM expects Marriott-generated room nights to drive incremental profitability, replacing MGM’s lowest-yielding package rooms,” Jonas anticipated. He added that further details would surely be forthcoming in MGM’s August 2 earnings call.
