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The Cosmopolitan in Las Vegas, Preparing for its Debut, Could be at Forefront
of a Trend; Las Vegas Casinos Linking up with Hotel Chains to Build Customer Base

By Suzette Parmley, The Philadelphia InquirerMcClatchy-Tribune Regional News

Dec. 13, 2010--LAS VEGAS -- In a town where one-upmanship is common and a new and costly casino seems to open here every year, the $3.9 billion Cosmopolitan debuts Wednesday as the Strip's 34th casino.

"The place is buzzing," its chief executive officer, John Unwin, said Thursday. "The whole energy has shifted from construction to meeting customers. . . . It's exciting."

Experts say the casino is at the forefront of a trend -- one unlikely to benefit the ailing casinos of Atlantic City, N.J., still the nation's No. 2 gambling destination.

The Cosmopolitan signed a deal with Marriott International Inc. in August to list the property with the hotel chain's luxury Autograph Collection, giving the casino access to the 32 million members of Marriott's customer-loyalty and rewards program.

Las Vegas Sands Corp. -- which owns the Sands Casino Resort in Bethlehem, Pa., and the Venetian and Palazzo on the Strip -- formed a similar alliance with InterContinental Hotels Group P.L.C., owner of 4,500 hotels worldwide, in late October. The 10-year deal allows InterContinental customers to redeem their points at either the Venetian or Palazzo, with a total of 7,000 hotel rooms.

"We believe it is a growing trend among casino hotels that are resort destinations, like those in Las Vegas," said Dennis M. Farrell Jr., managing director for gaming, lodging, and leisure research at Wells Fargo Securities L.L.C. "Some major hotel-reward programs have yet to establish a major presence in Las Vegas. Therefore, it is possible a few more deals could be inked in the coming year."

But, Farrell added, "it is doubtful that Atlantic City will be included in these hotel alliances as the town is still a drive-to regional destination."

The Cosmopolitan's primary selling point will be its 2,995 rooms and suites -- most with full terrace balconies. The rooms, designed by interior architect David Rockwell, offer panoramic views of the glittering Strip.

It has a dozen restaurants, all within a common area, or "neighborhood" as Unwin described it -- including Blue Ribbon Sushi Bar & Grill and Comme Ca -- and a collection of nine boutique retail shops. All the venues are entering the Vegas market for the first time.

A nightclub, three pools, a spa, and 150,000 square feet of meeting space round out the amenities.

Cosmopolitan's rewards program, called Identity, allows points to be earned and redeemed from throughout the casino, including its shops and restaurants.

Six cabanas, or semiprivate gambling areas, can accommodate up to 70 customers in the Cosmopolitan's Boulevard Casino, which sits right on the Strip and is separated from it only by glass.

"That idea that puts the casino right back on the Strip and embraces Las Vegas is really different and will get people's attention," Unwin predicted.

The Cosmopolitan, tucked between the $8.5 billion CityCenter resort complex that opened in December 2009 and the Bellagio, will compete in the premium luxury market against the Bellagio, Aria at CityCenter, the Venetian, and Palazzo.

It opens with 2,000 rooms, adding 995 over the next several months, all on top of Vegas' existing 148,400-room supply.

Gaming analysts, such as Las Vegas-based Jacob Oberman of CB Richard Ellis, say convention and meetings business here in 2011 would need to grow about 15 percent to absorb the new rooms.

That growth, he said, "is very achievable based on our meeting planner surveys and other data. You are already seeing that segment grow."

The boost in conventions and meetings will allow Las Vegas to maintain the same occupancy levels as this year's (about 89 percent weekend and 78 percent midweek year-to-date), Oberman said, with average daily rates declining only slightly by 1 percent or 2 percent. October's average daily room rate was $102.19, up 2.6 percent from a year ago.

The Cosmopolitan's marketing slogan in print and TV ads that began running in early October is: "Just the right amount of wrong."

A 675-square-foot terrace studio starts at $300 on a weeknight, while 1,100-square-foot suites with 500-square-foot terraces can run $500 to $600 a night. The casino is touting a three-night New Year's Eve package at $5,600.

Unwin, who cut his management teeth as a former executive with Fairmont Resort Hotels and Ian Schrager hotels in New York, and is a former general manager of Caesars Palace Las Vegas, said the Marriott deal was a win-win for the hotel company, Las Vegas, and the Cosmopolitan, which has yet to build its own customer database.

"It's a way for us to reach a broader audience," he said. "The Cosmopolitan is really the star of the show, but we have the power of a 32-million-member database and the power of the sixth-largest retail website. We get to distribute this product on marriott.com, ritzcarlton.com, and autograph.com."

For Marriott, which does not have a property here, "the most important part . . . is their customers get a place to stay in Vegas," he said.

In addition, Marriott has huge clout in the big group and conventions business -- what Vegas wants to attract more of, Unwin said. He said convention bookings for the first quarter of 2011 are very strong for the Cosmopolitan.

About 2,220 of the Cosmopolitan's rooms will have six-foot-deep terraces that span the length of the room.

"When I open that sliding door and see all that neon all the way up the Strip, you just can't get that feeling anywhere else," Unwin said. "It's just stunning."

Contact staff writer Suzette Parmley at 215-854-2594 or sparmley@phillynews.com.

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To see more of The Philadelphia Inquirer, or to subscribe to the newspaper, go to http://www.philly.com/inquirer.

Copyright (c) 2010, The Philadelphia Inquirer

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