MGM, Morgans to Convert Hotel into Delano Las Vegas
- Aug 08, 2012
By Barbra Murray, Contributing Editor
THEhotel at the Mandalay Bay resort and casino in Las Vegas will soon undergo a facelift — courtesy of a new partnership between MGM Resorts International and Morgans Hotel Group. The partners will redesign and rebrand the 1,117-room hotel as Delano Las Vegas.
“Operators like MGM are always looking for new ways to fill hotel rooms and establishing a partnership with an established brand like the Delano, so I think it’s a good thing for both MGM and Morgans,” said Michael Parks, executive vice president with commercial real estate services firm Newmark Grubb Knight Frank.
The hotel’s new outlook will reach completion in 2013, 10 years after the doors of the 43-story tower first swung open at the southern end of the Las Vegas Strip. For Morgans, the project has been a long time coming. It was back in early 2006 when the company first announced plans to bring the Delano brand to Las Vegas via a development project it would have completed in a 50/50 joint venture with Boyd Gaming Corp.
“They were originally going to go into the Echelon development that Boyd Gaming was doing, and then when that project was put on hold, I think they looked at a couple of other opportunities to enter the market,” Parks added.
But it’s a different day and a different market — and MGM is the new partner. The property will have a new theme, a new design and a new face on restaurants and bars.
As per a survey by the University of Nevada Las Vegas Center for Gaming Research, of the six-month period between December 2011 and May 2012: “With declines in slot machine and table game revenues in three out of six months, the Strip isn’t rebounding so much as treading water.” However, the conversion of the hotel property to the Delano brand may very well be a good move in the current market.
“I think it’s going to be received well,” Parks concluded. “And being attached to Mandalay Bay is great, so I think [the project is] definitely a good thing.”
MGM is footing the bill for the project and will serve as Delano’s manager under a 10-year licensing agreement with the option for two five-year extensions.