by Michael J. Shapiro | August 26, 2019
MGM Resorts International is putting money down on the nongaming boutique hotel market via a significant stake in the Sydell Group, parent company of NoMad hotels and restaurants, as well as the Line, Freehand and Saguaro hospitality brands. MGM collaborated with Sydell to rebrand the former Monte Carlo Resort as the Park MGM and NoMad Las Vegas, which debuted last year.

The deal amounts to a 50 percent stake, according to the Wall Street Journal, although MGM would neither confirm the percentage nor name a dollar amount. Sources describe the investment as minimal on MGM's part, however.

The move is part of MGM's long-term strategy to become an asset-light company, according to a company spokesperson. "This is part of the next evolution of our growth opportunities," she said. "Sydell has been a valued partner at Park MGM and helped us to bring NoMad to Las Vegas. We look forward to the future when we can bring our combined unique hospitality and style to our consumers."

While the companies have no concrete plans to announce at this time, MGM execs believe the companies have similar visions and leadership strategies. As such, plans call for the Sydell management team to remain in place, and for the company to maintain its independence and grow its brands. Over time, MGM will help bring scale to Sydell projects and hotels, allowing them to remain independent but in better position to compete with other independent hospitality companies that have been acquired in recent years.

Neither company would comment on the possibility of integrating Sydell's hotel properties into MGM's M life Rewards loyalty program, although that would seem a natural progression to the partnership.