MGM Resorts International has announced a long-term licensing agreement with leading hotel brand Marriott International that will make 17 MGM resorts available for booking on Marriott’s digital platforms.
The partnership will see the creation of MGM Collection with Marriott Bonvoy, due for launch by October, and encompass more than 40,000 rooms in Las Vegas and other US cities.
“This historic, long-term agreement brings together two of the most trusted and iconic brands in hospitality and entertainment,” said Bill Hornbuckle, President and Chief Executive Officer, MGM Resorts. “We’ve seen first-hand the strong demand from Marriott International customers through our existing relationship at The Cosmopolitan of Las Vegas, and this new agreement will enable us to further optimize our overall profitability.
“We’re thrilled to now scale the relationship and offer Marriott Bonvoy members greater distribution access to our award-winning resorts – as well as exclusive event and entertainment opportunities – in Las Vegas and across the US.”
Under the terms of the licensing agreement, members of both companies – around 40 million MGM Rewards members and 180 million Marriott Bonvoy members globally – will be able to link their accounts to earn and redeem points for stays.
Of the 17 resorts, four will be affiliated with existing Marriott collection brands, with Bellagio Resort & Casino to join The Luxury Collection, ARIA Resort & Casino the Autograph Collection, Park MGM the Tribute Portfolio, while The Cosmopolitan of Las Vegas will continue its affiliation with Autograph Collection.
Another eight Las Vegas resorts will join MGM Collection with Marriott Bonvoy: Vdara Hotel & Spa, MGM Grand Hotel & Casino, NoMad Las Vegas, The Signature at MGM Grand, Mandalay Bay Resort and Casino, New York-New York Hotel & Casino, Luxor Hotel and Casino, and Excalibur Hotel & Casino, as will five regional resorts: Borgata in Atlantic City, Beau Rivage in Biloxi, MGM Grand Detroit in Michigan, MGM National Harbor in Maryland and MGM Springfield in Massachusetts.
The companies said Marriott Bonvoy and MGM Rewards will unlock significant benefits and experiences for members of both programs, with Marriott Bonvoy members able to enjoy benefits at MGM Collection with Marriott Bonvoy resorts while MGM Rewards members will receive certain benefits at Marriott Bonvoy’s global portfolio of more than 8,500 properties.
Members of both programs will also be able to exchange MGM Rewards points for Marriott Bonvoy points and vice versa.
In a note, CBRE Equity Research analyst John DeCree said the partnership should help MGM Resorts improve customer mix and drive higher margins.
The Cosmopolitan of Las Vegas (TCOLV) gives proof of concept and MGM the confidence to expand the relationship with Marriott,” he said.
“Previously, management indicated that Marriott Bonvoy members accounted for nearly 20% of room nights at TCOLV. While we think this would be a lofty target for the rest of the MGM portfolio, we do see a real opportunity for MGM to replace some of its lowest tier online travel agency (OTA) and package room nights with Bonvoy customers.
“We estimate OTA bookings comprise nearly 20% of MGM’s total Las Vegas Strip room nights. Moreover, about half of that OTA mix is likely the lowest-tier package customers, who are booking room, car, and hotel under one package.
“This creates an opportunity not only to reduce customer acquisition cost and yield up ADRs, but also fill the resort with higher-value and more loyal repeat customers that should drive higher revenue and better margins.”
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