The Strip will get its first W branded hotel by way of a deal between lodging giant Starwood Resorts Worldwide and the SLS Las Vegas. The acquisition could help elevate the financial profile of both the North Strip neighborhood and the resort.
One of the SLS’s three hotel towers, the Lux tower will be taken over by the hotel company and the building’s 289 rooms will be converted into the W Las Vegas for a September opening. Specifics of the agreement include a separate hotel lobby for the W Las Vegas, which will be branded as the W Living Room, an outdoor bar and pool area, a W-branded spa, and a reception and dedicated entry area for W Hotel guests.
The renovation, the cost unknown, will be funded by SLS Las Vegas owners San Francisco-based Stockbridge Capital Partners and Starwood Resorts. The deal will make SLS Las Vegas part of Starwood’s Tribute Portfolio, which enables customers to use Starwood Preferred Guest loyalty program services by placing independently-owned hotels into Starwood’s global distribution system. The move, according to Scott Kreeger who took over as president of the property last year, will help the struggling 15-month-old North Strip resort, which has lost in excess of $89.3 million in the first six months of 2015, per securities filings.
Starwood will manage W Las Vegas while SLS Las Vegas, which ended its association with Hilton Worldwide Holdings Inc. last week, will continue to manage and operate the rest of the property, including two hotel towers, nightlife venues, restaurants and the casino. Due to its location on the Strip’s north end next to the shuttered Fontainebleau project now for sale by Carl Icahn, recently closed Riviera due to be demolished in 2016, and former Wet ‘n Wild site, the SLS Las Vegas has suffered.
Sam Nazarian, the visionary behind the SLS Las Vegas, a $415 million renovation of the Sahara that was shuttered in 2011, purchased the Sahara in 2007 and was in charge of the redesign. However, due to its isolated location and limited casino business, since it opened in August 2014 it lost an approximate $84 million during the first half of 2015. Following that, Nevada gambling regulators granted Nazarian a limited and temporary casino license and he agreed to remove himself from managing the SLS Las Vegas after speaking to regulators about previous drug use.
Last week initial approval was given to Stockbridge, which had a 90 percent stake in the resort, by Nevada gaming regulators for the acquisition of the remaining 10 percent held by Nazarian via his Los Angeles-based SBE Entertainment. The deal which will be decided by the Nevada Gaming Commission on November 19, converts SBE’s current management agreement into a franchise agreement.