MGM Resorts International has been looking for ways to increase its earnings and has begun to chop up its workforce in order to reach its goal. It now seems that it might find a boost through diversification and spending, as well. The casino operator has reportedly agreed to purchase 50% of Sydell Group, a boutique hotel chain.
According to the Wall Street Journal, MGM is getting into the hotel business via Ron Burkle, a private equity investor. MGM is going to purchase Burkle’s take in the company for an undisclosed amount of money. Sydell is behind hotels such as NoMad, Freehand, The Ned and more, with properties all across the country, as well as two in London.
NoMad could have been a way for MGM to test the accommodations waters. It is located at the Park MGM, previously known as the Monte Carlo Resort and Casino, but Sydell has controlled the operations. With MGM’s acquisition, it will have more say in how the business is run.
Sin City will always have its roots in gambling – casinos are the only reason the desert land became a popular destination. However, the times change and companies have to adapt to the changes if they want to remain viable. Las Vegas is diversifying away from a gambling concentration and MGM is following suit, looking for different and lucrative ways to keep the company strong.
The entire gambling scene is changing. Younger generations – millennials, Generation Z-ers – don’t want to travel to casinos. They would rather sit on their couches and play on their smartphones or tablets, and the numbers are reflecting this different mentality. If brick-and-mortar casinos can still rely on Baby Boomers and Generation X-ers now, this won’t be the case 15 or 20 years from now. Changes have to be made today in order to be better prepared for that eventuality.
Sydell, in addition to the NoMad hotel at Park MGM, operates another NoMad, in New York. Freehand is located there, as well, and both are relatively close to the Empire City Casino venue under MGM’s umbrella. MGM received approval to purchase the Yonkers-based venue this past January, and it is only about 45 minutes away from New York City, where the hotels are located.
