MGM, Hakkasan to develop non-gaming hotels

The Hakkasan Las Vegas Restaurant and Nightclub

The Hakkasan Las Vegas Restaurant and Nightclub at MGM Grand opened in April 2013 and is home to many world-renowned DJs. Pictured: The Hakkasan Las Vegas Restaurant and Nightclub at MGM Grand opened in April 2013 and is home to many world-renowned DJs. 

Las Vegas – MGM Resorts International and the Hakkasan Group are betting that some of Las Vegas’ most notable brands will perform just as well outside Sin City. The two have teamed up to create MGM Hakkasan Hospitality, which will focus on the development and management of luxury non-gaming hotels and resorts in major global gateway cities under the brands Bellagio, Hakkasan, MGM Grand and Skylofts. Targeted cities reportedly already include New York, Beverly Hills and London. Under the new joint venture, each party will provide its brand licenses to MGM Hakkasan Hospitality.

Nightlife impresario Neil Moffitt, the current CEO of Hakkasan Group and founder of Angel Management Group, will lead MGM Hakkasan Hospitality. The tie-up is seemingly a natural extension for the two groups, which together opened the Hakkasan Las Vegas Restaurant and Nightclub at MGM Grand in April 2013. The JV will purely engage in management deals, Moffitt said, adding that Hakkasan Group’s ownership group already owns certain hotel projects that the JV will manage, and that it will consider ownership positions in projects on a case-by-case basis.

Hakkasan started as an Asian restaurant concept, launching its first outlet in London in 2001. But it has since diversified into the hospitality sector. The growth for the company continues, and Moffitt believes the partnership with MGM is a natural fit.

“As we furthered our global expansion plans, which have always included hotels and resort projects, we felt it was important to find the best possible partner that could bring a wealth of experience and skill to development and operations, and we thought there was no better choice than MGM Resorts,” he said. “We believe this JV is a successful collaboration as it incorporates the strengths of MGM Resorts International and Hakkasan Group.”

Added Khadem Al Qubaisi, chairman of the Hakkasan Group, “This joint venture exemplifies one of our stated strategies of developing Hakkasan Group into a multi-faceted global lifestyle company. While hotel and resort projects have been part of our business plan for some time, it was crucial for us to find the best possible partner.”

Current MGM Hospitality COO Michael Evans will be COO of the new company.

Growth path

Moving forward, the focus will be on how to translate the brands outside Las Vegas, particularly in a non-gaming fashion.

The brands possess extensive brand equity in Las Vegas; what about elsewhere? “Bellagio and MGM are undoubtedly two of the world’s most iconic and recognized hospitality brands, which is impressive considering their limited current geographic footprint,” Moffitt said. “I believe that the resonance of these brands through their exposure in Las Vegas, married with the choice of locations for expansion, will be a recipe for great success.”

Inside the Hakkasan Las Vegas Restaurant and Nightclub with Dutch DJ and producer R3hab.Pictured: Inside the Hakkasan Las Vegas Restaurant and Nightclub with Dutch DJ and producer R3hab.

And what of the fact that these will be non-gaming properties, something foreign to MGM-branded hotels? “While they are known as gaming properties, the core principles of impeccable design, food and beverage and service will be carried forward, which are far more important in our opinion than whether there is a gaming component to the properties,” Moffitt said.

Indeed, development is already taking shape. Moffitt said that they are currently in various stages of development on projects in Dubai, Abu Dhabi, Mumbai, Doha and Cabo San Lucas. Future plans for international growth will continue to be to open hotels and resorts in key gateway cities around the world. Moffitt said that within the next five years, the goal is to secure upwards of 30 projects.

Once the hotels are open, there will be a huge reliance on MGM to fill them, particularly through M Life, MGM’s loyalty program. “M Life provides us with a huge base of customers to reach out to once we have new hotel offerings, and we believe that their engagement with current MGM Resorts brands will fuel desire to experience our new offerings around the world,” Moffitt said.

One of the stronger points of the new hotels should be their food-and-beverage components, something Moffitt said will be fully leveraged. “We intend to integrate the strong brand equity that exists in our portfolio of dining and nightlife assets in our hotel properties moving forward, with market research driving the selection of which brands to implement in each project,” he said.

Hakkasan’s F&B brands include Hakkasan, Yauatcha, Sake no Hana and HKK.

Expanding MGM’s brands outside its original Las Vegas market is not new. Consider Morgans Hotel Group, which manages boutique hotels in such cities as Boston, New York, Miami, Los Angeles and San Francisco. In 2012, it announced it was expanding its Hudson hotel brand to London. The Hudson hotel was originally conceived by Ian Schrager in New York. Later, in 2012, Morgans announced it would expand its Delano and Mondrian brands to Marrakech, Morocco and Moscow.