Last week, U.K.-based InterContinental Hotels Group announced it had entered into an arrangement with Las Vegas Sands Corp. to add Sands' two casino hotels, The Venetian and The Palazzo, to its database and loyalty programs. IHG thus became the third hotel company this year to forge a presence on the Strip, following Marriott International, which will manage The Cosmopolitan, slated to open Dec. 15, and Wyndham Hotels & Resorts, which entered into a franchise agreement with Planet Hollywood.
At the heart of this sweetheart deal lies two key strategic components: greater distribution and increasing group business. In making the announcement at its Americas Investors & Leadership Conference, which, incidentally, was held at The Venetian, IHG CEO Andy Cosslett said the partnership represented "a foot in the door" to other Sands properties, namely the Singapore and the Macau. Mike Leven, chief operating officer of Las Vegas Sands Corp., noted that, "Since the Venetian and Palazzo together represent the largest meeting and convention facility of its kind, with 330 meeting rooms and more than two million square feet of meeting space, this agreement will give IHG's group sales offices the unique opportunity to directly book their client's meetings in Las Vegas -- which happens to be their most requested destination." The deal will last 10 years, and beginning early next year, the two properties will be marketed as InterContinental Alliance Resorts.
Gaining IHG's marketing and booking channels, particularly its 52 million Priority Club Rewards and Ambassador members, will be a huge boost for Las Vegas Sands, as the competition heats up in Sin City for bodies to fill the seemingly unstoppable room pipeline. Even though Sands reported in its 3Q 2010 earnings report, issued on Oct. 27, that group bookings at its Venetian and Palazzo properties were up, it faces stiff competition from CityCenter, which opened in December 2009, flooding this already saturated market with another 4,800 hotel rooms. The Cosmopolitan will add close to 3,000 additional rooms.
While the Las Vegas Convention & Visitors Authority reported an increase in visitors, room rates, occupancies and convention attendance for the first eight months of this year, the actual number of meetings held actually slipped just over 7 percent, compared to the same period last year. IHG and Las Vegas Sands Corp. are betting that by pooling their resources, they can turn that number around.