SLS Las Vegas teaming with Starwood to rebrand hotel tower

Hotel towers are shown during a tour of work on the SLS Las Vegas resort, formerly the Sahara, Wednesday, March 13, 2013.

SLS Las Vegas announced today that one of its hotel towers will eventually be managed by Starwood Hotels & Resorts Worldwide Inc., a deal that will rebrand the tower and connect the Strip resort to the hotel company’s loyalty program.

The agreement with Starwood will convert the 289-room tower currently running as SLS Lux into a W Hotel by the end of September. Additionally, the SLS will join Starwood’s Tribute Portfolio, which will give the resort access to the Starwood Preferred Guest loyalty program as well as the hotel company’s global distribution systems and worldwide sales organization, according to a statement.

Announcement of the SLS-Starwood relationship comes after SLS and Hilton Worldwide Holdings Inc. said last week that they “mutually ended” the franchise agreement.

SLS had previously been part of Hilton’s Curio collection, a group of independently operated hotels that have access to the hotel company’s loyalty program HHonors. Neither party said why they ended the agreement.

Under the Starwood deal, the SLS Lux tower will be renovated into W Las Vegas and will include its own version of a hotel lobby, a special entry and reception area, a spa and an “exclusive outdoor pool and bar” called WET. Starwood will manage the W tower, while the rest of the property will continue to be run by the management of SLS Las Vegas.

SLS President Scott Kreeger said in an interview that hotel rooms were the driving force of the resort, particularly becuase SLS lacks the foot traffic enjoyed by properties farther south on the Strip. Accordingly, he said, SLS sought out another hotel brand that fit well with its business and could help drive visitation.

“Starwood was, without question, the brand that we all said was the brand of choice to partner with,” Kreeger said. “We all agreed that we thought a W Hotel would be a phenomenal opportunity — it just aligns so well with the SLS brand.”

Kreeger said he appreciated Hilton as a business partner for the SLS’ first year of operations. But, noting that Hilton has many other hotels in the Las Vegas area, he said the SLS felt that a different partner could drive more business.

Starwood, for its part, has other hotels in the Las Vegas market, including the off-Strip Westin Las Vegas, Westin Lake Las Vegas in Henderson, Four Points by Sheraton off Flamingo Road in the east valley and Element Las Vegas Summerlin.

Allison Reid, Starwood’s senior vice president of North America development, said in the statement that her company has “long wanted to increase its presence in Las Vegas.” Las Vegas is a desired destination for members of Starwood’s loyalty program, who occupy 50 percent of the company’s rooms on any given night, she said.

SLS has also reached an agreement with Live Nation Entertainment, according to Kreeger, that will transform the former Life nightclub into a new 1,800-seat concert venue at the beginning of 2016.

Kreeger said it was part of an ongoing effort to “make SLS Las Vegas known for great live entertainment.”

That and the Starwood deal will likely be beneficial to the financially struggling SLS, which reported a net loss of $35.3 million in the first quarter this year and $48.7 million in the second quarter.

The resort opened in August 2014 as a $415 million reinvention of the Sahara but has been challenged by its location on the far end of the north Strip.

The state Gaming Control Board last week gave initial permission for Sam Nazarian, the businessman who led the creation of the SLS, to withdraw his application for a key employee license.

The board also said the resort’s majority owner, Stockbridge Capital, can buy the remaining 10 percent of the business. The Nevada Gaming Commission will consider both items for final approval Nov. 19.