Hilton returns to Vegas Strip with Tropicana deal
Next January, Hilton Worldwide's top customers will again have a prime spot on the Las Vegas Strip to earn and redeem their points.
Hilton Worldwide today will announce a franchise deal linking the Tropicana Las Vegas to its fastest growing full-service chain - DoubleTree by Hilton.
The upscale contemporary chain, known for giving guests chocolate chip cookies, will offer Hilton's loyalty program members a spot on The Strip after a nearly 14-year absence. The Tropicana will be integrated into Hilton's websites and toll-free reservations number.
"We clearly need to get Hilton Worldwide back on to the Las Vegas Strip," says Rob Palleschi, global head of the DoubleTree by Hilton brand.
Global hotel operators, even those not typically associated with gambling, have been targeting Las Vegas in recent years. Marriott, for instance, is affiliated with The Cosmopolitan, and InterContinental has ties to The Venetian. Boutique developer New York-based Morgans Hotel Group is in the midst of converting a tower at Mandalay Bay into a trendy, high-end Delano hotel.
Charles Quinn, executive vice president of CBRE Hotels, says the Tropicana-Hilton deal "makes a lot of sense," citing the hotel's location and Hilton's reach.
"While the Tropicana may not be as glamorous as Bellagio or Wynn," Quinn says, "the fact that travelers can earn points by staying might drive more of them there."
TROPICANA BANKS ON BOOST
The Tropicana is phasing in its Hilton affiliation, which will become official in January, says Alex Yemenidjian, Tropicana's CEO and the former CEO of the Metro-Goldwyn-Mayer movie studio.
Yemenidjian and his partners bought the 55-year-old Tropicana out of bankruptcy in 2009 and have been working to transform it into a more upscale property. While the number of people visiting Las Vegas is back to prior peak periods, Yemenidjian says, the mix has shifted. The current number of higher-spending convention visitors, for instance, is at 4.9 million per year, vs. a peak of 6.3 million in 2006 — when Vegas had fewer hotel rooms, he says.
Current room rates at the Tropicana range from roughly $70 a night to $150 a night.
The 1,600-room hotel's in the final stages of completing a $200 million makeover. Renovations have brought new designs to guest rooms and suites, the 50,000-square-foot casino and more than 60,000 square feet of meeting and exhibition space. The hotel also has several new restaurants and bars, as well as a spa and fitness center. On Oct. 31, Bagatelle Beach & Nightclub will open. Among the shows performed there is the seasonal "Dancing with the Stars: Live in Las Vegas."
Under the deal, the Tropicana will continue to own and operate the 35-acre resort. Yemenidjian says the hotel is increasing staff in its reservations and group sales departments, anticipating a boost in business after joining the DoubleTree chain. Having access to Hilton's sales and marketing system, he says, will give the hotel "a quantum leap."
HILTON'S VEGAS HISTORY
For Hilton, the deal gives its loyalty program members a prominent property in a city where it has a rich history. In the 1970s, Hilton became the first NYSE-listed company to enter the domestic gaming business by purchasing the Flamingo Hotel. In 1998, Hilton spun off its gaming operations into a separate publicly held company called Ceasar's Entertainment.
Hilton currently has about 17 properties under its various brands in the Vegas market, including an airport DoubleTree by Hilton. Earlier this year, Hilton ended its affiliation with the Hilton Las Vegas. But while loyalty program members could use points to book stays in other top resort destinations such as Orlando and Hawaii, until this deal, it was missing a top hotel in Vegas. Hilton cites the hotel's prime location on Tropicana Boulevard and Las Vegas Boulevard as a big draw: "It's like the epicenter of Las Vegas; guests can conveniently walk from hotel to hotel, casino to casino," says Palleschi.