Rumor Has It: Hotel Chain Merger
Over the past few weeks there have been rumors about a wide variety of companies (ranging from Asian investors to Intercontinental Hotel Group) possibly acquiring Starwood Hotels. The most recent rumor, and hottest in the United States, is that Hyatt Hotels is now considering acquiring Starwood Hotels. This deal would have a major impact on the hotel landscape in Las Vegas.
Starwood Preferred Guest is currently partnered with Caesars Entertainment’s Total Rewards players club. Total Rewards Las Vegas properties include Bally’s, Caesars Palace, The Cromwell, Flamingo, Harrah’s, The Linq Hotel, Paris Las Vegas, Planet Hollywood and Rio. Hyatt is currently partnered with MGM Resorts Mlife players club. Mlife hotels include Aria, Bellagio, Delano, Excalibur, Luxor, Mandalay Bay, MGM Grand, The Mirage, Monte Carlo, New York-New York and Vdara. That is a total of 20 hotels, 19 of which are on the Las Vegas Strip.
Combined the Total Rewards and Mlife players clubs make up the majority of hotels on the Las Vegas Strip. Combining the two companies would have a major impact on hotel loyalty in Las Vegas. If Total Rewards continues with the new Hyatt/Starwood then just one company would control the loyalty programs of about 2/3rds of the hotels on the Las Vegas Strip. This probably isn’t a good thing for most visitors. It’s always nice to have options.
If Total Rewards is not part of a Hyatt/Starwood loyalty program who will they partner with in the future?
Caesars Entertainment will have to keep all of their options open since the company is currently dealing with bankruptcy. Unlike some Las Vegas hotel operators Caesars Entertainment is also a national hotel and casino company. They might have more options to consider than just Las Vegas. Right now any lucrative option should be on the table.
Will a budget or mid-level loyalty programs look to expand deeper into the casino world? Best Western, Choice and Wyndham have large programs with little exposure to Las Vegas and the Vegas Strip. They may or may not make sense to partner with Caesars Entertainment. Again, all options have to be explored.
Two of the largest hotel loyalty programs, Marriott Rewards and Hilton HHonors, might be more reasonable to look at. In fact one of these companies makes a lot of sense to partner with Caesars Entertainment and Total Rewards.
Marriott Rewards’ only partner hotel on the Vegas Strip is the Cosmopolitan. There have been rumors that this partnership will eventually end because the Cosmopolitan was sold to Blackstone Group last year. Blackstone also has majority control of Hilton and might look to merge their interests. For the time being Marriott is still a partner with the Cosmopolitan but it feels like only a matter of time before Blackstone integrates the Hilton HHonors program.
If Blackstone does make a move with the Cosmopolitan and Hilton then Marriott would, in essence, become a free agent in Las Vegas. This newfound freedom might give them the option to partner with Caesars Entertainment and Total Rewards in Las Vegas and possibly around the United States.
Hyatt could also decide to keep Caesars Entertainment and Starwood together. In that case Mlife would be the Las Vegas loyalty program looking for a partner. I don’t even want to think about the dwindling options for visitors if Hyatt became the hotel partner of both Mlife and Total Rewards. We can explore that if it actually happens. There are definitely a lot of potential scenarios.