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Best of Chris Sieroty

Gaming Guru

Chris Sieroty
 

Hilton Worldwide, Tropicana Las Vegas sign franchise deal

29 October 2012

LAS VEGAS -- Hilton Worldwide customers will again have a prime spot on the Strip to earn and redeem their points. The hotel company said Friday it had reached a franchise deal linking Tropicana Las Vegas to its DoubleTree by Hilton brand beginning in January.

Under the terms of the franchise agreement, Tropicana Las Vegas will continue to own and operate the 35-acre resort, which recently completed almost $200 million in renovations. In return, Hilton Worldwide will be able to offer its loyalty program members a place on the Strip after a 14-year absence.

Tropicana Las Vegas will be integrated into Hilton's websites and toll-free reservation number. Financial terms of the deal were not disclosed.

"We are proud that, with the addition of Tropicana Las Vegas to our portfolio, Hilton Worldwide will continue to build upon its rich history in Las Vegas," said Rob Palleschi, global head of DoubleTree by Hilton.

Renovations to Tropicana Las Vegas included remodeling 1,658 rooms, as well as a 50,000-square-foot casino, and more than 60,000 of convention space.

McLean, Va.-based Hilton Worldwide in January lost a marquee hotel franchise in Las Vegas when it ended its eight-year agreement with Colony Resorts LVH Acquisitions LLC, owner of the former Las Vegas Hilton.

The Los Angeles-based private equity firm gave up the Hilton name and loyalty program at the hotel, adjacent to the Las Vegas Convention Center. The struggling off-Strip hotel was renamed LVH.

Hilton also has four time share projects in Las Vegas, along with a number of small hotels.

One time share is adjacent to the LVH, the other is at the Flamingo and the third is on the Strip at 2650 Las Vegas Blvd. South. The company in November 2011 rebranded the PH Towers Westgate at Planet Hollywood as its fourth Grand Vacation Suites time share.

Hotel operators that don't offer gambling have targeted Las Vegas resorts in an effort to offer their customers alternative choices. Marriott International Inc., for instance, is affiliated with The Cosmopolitan of Las Vegas, and InterContinental Hotel Group Plc has an agreement with The Venetian.

The deal comes at a crucial time for the 55-year-old Tropicana Las Vegas.

In September, the property's parent company, Tropicana Las Vegas Hotel and Casino Inc., initiated a $40 million rights offering on a new series of preferred shares to raise additional capital. In a Securities and Exchange Commission filing, the company said the financing would be used to fund continuing capital improvements.

Tropicana Las Vegas CEO Alex Yemenidjian and managing director Timothy Duncanson both own more than 12.1 million shares individually, according to the filing.

Yemenidjian said he was "thrilled" Hilton Worldwide chose Tropicana Las Vegas to represent their brand on the Strip.

Also in September, the hotel closed its Gold Poker room just seven months after it opened the room named for World Series of Poker 2006 winner Jamie Gold.

Tropicana Las Vegas posted a second-quarter net loss of $5.9 million on revenue of $25.4 million. As of Friday, the privately owned casino had not released third-quarter earnings.