Marriott enters licensing deal with MGM to boost presence in Las Vegas strip

By Doyinsola Oladipo

(Reuters) -Marriott International said on Monday it entered a 20-year licensing agreement that will allow its loyalty members to earn and redeem existing points for booking stays at MGM Resorts International's properties.

Marriott and MGM are teaming up to offer benefits to loyalty members as travel companies use unique programs to keep customers as the demand for experiences like travel, concerts and sporting events booms across the United States.

The pair launched "MGM Collection with Marriott Bonvoy," which will allow members of the Marriott Bonvoy rewards program to earn and redeem points for stays at 17 MGM resorts across the United States and Canada. MGM's 40 million members will gain access to the Bonvoy loyalty program.

MGM and Marriott previously teamed up in 2021 in a franchise agreement for the Cosmopolitan Hotel in Las Vegas in 2021, the third-most redeemed hotel in the Bonvoy network, according to Bernstein Hotels research associate Kate Xiao.

The companies are looking to recreate the Cosmopolitan's success with the new partnership.

"We're going take a broad spectrum of 180 million Bonvoy members and expose them to our resorts in an amazing marketing machine," MGM CEO Bill Hornbuckle said in an interview with Reuters.

Marriott's net unit growth - the number of rooms it has available - will increase by 2.4% from this deal, putting that growth rate above 5% for the first time since 2015, said Bernstein's Xiao. Net unit growth is the only area Marriott traditionally lagged behind peers, she added.

Marriott will earn fees on total room revenue on the MGM Resorts that are part of the agreement, Marriott CEO Anthony Capuano said.

"We think this partnership should drive longer-term, sustainable growth," Barry Jonas, gaming analyst at Truist Securities, said in a note.

(Reporting by Aishwarya Nair in Bengaluru and Doyinsola Oladipo in New York; Editing by Shweta Agarwal and Will Dunham)