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Las Vegas Strip's Room Price War Not a Drag on Cosmopolitan's Rates;
Property Continues to Buck Trends

By Liz Benston, Las Vegas SunMcClatchy-Tribune Regional News

March 14, 2011--In the price war still plaguing hotels on the Strip, the Cosmopolitan seems a bit like the new kid who's too cool to play with the others.

Since the property opened in December, room rates have been slightly higher than other luxury resorts in town, running nightly rates of about $200 to $300 during the week and closer to $400 on weekends.

Based on online reviews, that seems fine by customers who rave about the property's "chic" interiors and indie vibe.

Cosmopolitan is bucking the trend in other ways, too. It's the only luxury hotel on the Strip not to sell rooms through Expedia, the dominant Internet hotel discounter serving Las Vegas. Expedia commonly sells five-star rooms for less than $200 a night through its, and brands. It also takes about 20 percent in return, diminishing the hotel's profit on each room but a decent trade-off for many Las Vegas hotels that make money on other amenities such as gambling and dining.

The price differential might be a short-term reaction to the buzz that typically surrounds a new resort rather than a long-term strategy. Competitors have opened their doors with cheaper rates since the downturn, though.

It's hard to tell whether the strategy is working for the privately held Cosmopolitan, which doesn't publish earnings.

One analyst thinks it's risky given that Las Vegas visitors are sensitive to small differences in price. However, it's a positive for other casinos that appear less concerned about competition from the Cosmopolitan than before, said Patrick Bosworth of Duetto Consulting in Las Vegas.

"It's a branding play," he said.

From Cosmo, "we are committed to building a unique luxury brand. We will continue to compete with other luxury properties in the Las Vegas market by providing guests with a meaningful and distinctive experience that they value and want to share with others," said Lisa Marchese, senior vice president of brand marketing.

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In the old days, casino companies grew by building. In the recession, some are taking a cheaper and safer approach by striking marketing deals with competitors. It's a new era of partnership in an increasingly competitive business where filling hotel rooms to capacity, especially in Las Vegas, has become a new challenge.

Pinnacle Entertainment announced a deal Wednesday enabling the company's big gamblers to stay for free at Wynn Resorts-owned Wynn and Encore hotels. Pinnacle owns a chain of casinos but none is located here, meaning that Wynn Resorts will fill rooms with gamblers who may not have otherwise stayed at the properties. Last year, Las Vegas Sands partnered with the tribal-owned Barona resort near San Diego to fill the Venetian and Palazzo and signed a similar marketing deal with Intercontinental Hotels Group, which owns seven hotel brands, including Holiday Inn and Crowne Plaza. MGM Resorts is working on a partnership with Los Angeles-based hotel and night life company SBE Entertainment and is eyeing other marketing arrangements whereby casino customers can redeem points for hotel stays and other amenities offered by marketing partners.

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Some of the biggest moneymakers in U.S. casinos are slot machines with generic-sounding names such as "Wolf Run" and "Blazing 7s."

That might be changing as more Hollywood-powered brands topped this year's list of the most popular American slot machines, according to a report by investment bank Goldman Sachs.

A slot based on the hit TV show and movie series "Sex and the City" debuted on Goldman's annual survey at No. 1, followed by a slot based on the movie classic "The Wizard of Oz," which topped the list the previous two years.

Manufacturer International Game Technology, which introduced the "Sex and the City" slot last year, has called it one of the company's biggest hits, appealing to men and an age range beyond the show's core audience of young women.

"Wheel of Fortune," one of the most popular slot machines of all time since its 1996 debut, was No. 4. A "Lord of the Rings" slot based on the movie trilogy debuted at No. 7.

The survey ranked the slots based on the percentage of casino managers polled who cited them as their biggest moneymakers.


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Copyright (c) 2011, Las Vegas Sun

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