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Cosmopolitan Las Vegas

In the price war still plaguing hotels on the Strip, the Cosmopolitan seems a bit like the new kid who’s too cool to play with the others.

Since the property opened in December, room rates have been slightly higher than other luxury resorts in town, running nightly rates of about $200 to $300 during the week and closer to $400 on weekends.

Based on online reviews, that seems fine by customers who rave about the property’s “chic” interiors and indie vibe.

Cosmopolitan is bucking the trend in other ways, too. It’s the only luxury hotel on the Strip not to sell rooms through Expedia, the dominant Internet hotel discounter serving Las Vegas. Expedia commonly sells five-star rooms for less than $200 a night through its Expedia.com, Hotels.com and Hotwire.com brands. It also takes about 20 percent in return, diminishing the hotel’s profit on each room but a decent trade-off for many Las Vegas hotels that make money on other amenities such as gambling and dining.

The price differential might be a short-term reaction to the buzz that typically surrounds a new resort rather than a long-term strategy. Competitors have opened their doors with cheaper rates since the downturn, though.

It’s hard to tell whether the strategy is working for the privately held Cosmopolitan, which doesn’t publish earnings.

One analyst thinks it’s risky given that Las Vegas visitors are sensitive to small differences in price. However, it’s a positive for other casinos that appear less concerned about competition from the Cosmopolitan than before, said Patrick Bosworth of Duetto Consulting in Las Vegas.

“It’s a branding play,” he said.

From Cosmo, “we are committed to building a unique luxury brand. We will continue to compete with other luxury properties in the Las Vegas market by providing guests with a meaningful and distinctive experience that they value and want to share with others,” said Lisa Marchese, senior vice president of brand marketing.

Tom Costello is the CEO, Partner & Co-Founder of Groups International, a company that provides marketing, consultative services, and technology solutions to the group and leisure travel markets.  Connect with him on TwitterLinkedIn, and Facebook or contact him by email.