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Hilton ending franchise agreement with Las Vegas Hilton
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LAS VEGAS REVIEW-JOURNAL
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LAS VEGAS REVIEW-JOURNAL
Updated: Jun. 30, 2011 | 8:18 a.m.
Is an iconic Las Vegas hotel brand name looking for a new home?
It was looking more likely Wednesday after Hilton Worldwide notified the owner of the famed Las Vegas Hilton that it plans to terminate its franchise license agreement by the end of the year.
Hilton Worldwide said that as of Jan. 1, its franchise agreement with Colony Resorts LVH Acquisitions LLC, owner and operator of the Las Vegas Hilton, will have been terminated, forcing the off-Strip hotel to give up the Hilton name and loyalty program.
"We have been in discussions with other major hotel brands and may re-engage with Hilton in the coming months regarding a new franchise agreement," said Owen Blicksilver, a spokesman for the Las Vegas Hilton. "We expect to announce an affiliation with a major hotel chain before year's end."
Blicksilver said Hilton's notification would not "impact the management, ownership, operations, employees, vendor or guest services at our hotel."
"Pursuant to the license agreement, either party may terminate the agreement without cause at any time after Jan. 1, 2011. Unless the parties reach an agreement otherwise, the effective date of the termination will be Jan. 1, 2012," according to a Colony Resorts filing with the Securities and Exchange Commission.
Neither Hilton Worldwide nor Colony Resorts would comment on the reasons for terminating what will be an eight-year business relationship at the end of the current contract. The current three-year license, signed in 2009, gives Colony Resorts the right to use the Hilton brand, and it links the property to Hilton's "Honors" loyalty program.
That doesn't mean Hilton is leaving Las Vegas, however.
"Hilton has 17 hotels representing six of our brands in the Las Vegas area," a Hilton Worldwide spokesman said Wednesday. "We continue to explore a number of projects in strategic markets."
Hilton Worldwide, based in McLean, Va., operates its Hilton Grand Vacations, Doubletree, Embassy Suites, Homewood Suites, Hampton Inn and Hilton Garden brands in Las Vegas.
David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas, said he expects the Hilton name to remain associated with gambling and the Strip.
"Hilton might just affiliate with an existing casino, like Cosmopolitan with Marriott," Schwartz said. "The Tropicana might be a good candidate, as might Treasure Island or even the Stratosphere."
For Colony Resorts, he said, it would mean a costly name change "at a time when it doesn't have much, if any, money to spare."
Colony Resorts lost $3.3 million on net revenue of $52 million in the quarter ended March 31, an increase from the $2 million loss, on $54 million in net revenue, in the same quarter of 2010.
As far as names go for the Hilton property, Schwartz suggested a return to "International."
The 64 acres the hotel sits on was originally occupied in the 1950s by the Las Vegas Park Speedway, a horse and auto racing facility. The hotel was built in 1969 by Kirk Kerkorian and opened as the International Hotel.
Barbra Streisand was the opening-night act, but the International, followed by the Hilton, was known as the Las Vegas home to Elvis Presley. In 1969, Presley performed 58 consecutive sold-out shows, playing to 130,157 fans. The King broke his own attendance record three times in February 1970, August 1970 and August 1972. Presley also maintained a residence at the Hilton until December 1976.
The hotel has changed hands several times, starting in 1970 when Hilton Hotels Corp. bought it and in 1971 renamed it the Las Vegas Hilton. Shortly after the company split into two different companies in 1998, Hilton Gaming merged with Bally Entertainment Corp.
The company was renamed Park Place Entertainment, which bought Caesars World in 2000. Four years later, Park Place sold the Las Vegas Hilton to Colony Capital LLC for $280 million.
Colony Capital, a Los Angeles-based private equity firm, then transferred the property to its subsidiary Colony Resorts LVH Acquisitions LLC.
The hotel, next to the Las Vegas Convention Center, has 2,956 rooms and 305 suites and a 74,000-square-foot casino, with a dozen restaurants and the Hilton Theater showroom.
Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.
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Hey Tom, you are incorrect about the ages of the cocktail waitresses..they are over 70, and THEY can't walk either. Colony capital let the place go, and they didn't put any 200 million into the place either, as someone else commented. They put a few band-aids on the place, fixed up the lobby, and added a 24 hour coffee and wine bar. HA! All they get in there now are complaining, grumbling opportunists disguised as guests..who want everything for free, and won't hesitate to get some poor working stiff fired, because they couldn't get their FREE drink as soon as they sat down. Plus some of the bums that drifted in from the Stardust, like to drink there, and they are just as bad. No money, and looking for free stuff all the time. Bunch of hobos.
Does anyone realize that this property is adjacent to the convention center? Just asking?
The Las Vegas Hilton is dead. HOWEVER, it sits on a huge parcel of land. I envision a tear down, a beautiful new place built with attractions like a waterpark & efficient utilization of the acreage, AND a tie-in or ownership of the barely used private LV Country Club next door. The monorail could help with the location. Man, it could be glorious!
The "Hilton" name means nothing any longer. It has been bought and paid for several times over, the real "Hilton" family has nothing to do with it. I could care less if it was the Las Vegas Hilton, or the Las Vegas Hotel 6, I wouldn't spend a dime there. It's a dump in a bad location. They got away with that bad location back when the strip was a sleepy place. Not anymore.
When Baron Hilton ran the joint, employees were happy, well paid and couldn't wait to go to work. The Hilton was a beautiful place. Now it is run down, dirty, smelly, and bug infested. The employees are no longer hapyy, and dread going to work each and every day. Colony has stripped each shift down to a skeleton crew...leaving only the 75 year old workers who have the most senority to carry the brunt of the responsibilities for their position. On top of that, they treat their employees like garbage. No raises, no time off (due to the short amount of people working there), the employees there feel like prisoners in a job they used to love. The slot department has been reduced to almost non existence. If the food and bev. dept had a decent crew, they wouldnt have to deal with the health dept., but they blamed that on the chefs. The security director is hardly ever seen or heard from, but when he is, he is threatening the officers, and even other employees. Second in charge has been seen sleeping on the job. The lady who was in charge of human resources ran off. It looks like the Hilton needs more than just a new name for the building,they need new names in management.....and new owners...........
We'll leave the light on for you.
Colony used to be brilliant at buying undervalued gaming assets and then selling them for tidy profits. They never actually operated them for that long. They bought this hotel for a song, but in the end never had the operational savvy to make a run with it. The original folks who ran Resorts International which is also owned by Colony (the company that another blogger was referring to) left the building a few years ago and it appears so did their customers! Hilton was always proud to have their name associated with this asset. Too bad. I always liked this property. BTW, Colony also stopped paying the mortgage on the AC Hilton. Is that license going to get pulled too?
I recommend changing the name to "Jilton" - just a one letter change and a more accurate expression of their employee and customer philosophy . . . change can be a good thing - we can only hope this landmark can rise above it's current reputation.
Blicksilver says this will not impact the daily operation, employees or venders, he better think again. I always felt that if one strip resort casino closes on the strip, more will soon follow. This can be the start of that trend. Sahara, I'm just waiting to see who is next, Las Vegas Hilton? The Las Vegas Hilton is old and it does not appear that nothing has been done for years. Many of the old resort casinos have lost touch of what made them so great and are not willing to reinvest in their own property.
From what I know, Colony and it's original partner Resorts International pumped almost 200 million into sprucing up the Hilton. Then they got Barry Manilow, who some say has the best show in Vegas. A lot of the employees there are charter members, 65 year old cocktail waitresses, porters who can barely walk, bellman wo remember the day's of Elvis and their $300 on the side. The Las Vegas Hilton was called the big Hilton, the best place to work. Not any more, but it still is a place to make a living in these hard times. Count your blessings!