The owner of The Rio Las Vegas said the property is doing well on the weekends when the hotel tower is open and painted an optimistic picture of the future of gaming in Las Vegas once the coronavirus pandemic passes.
New York developer Eric Birnbaum, the owner of Dreamscape Companies, received a preliminary finding of suitability Thursday from the Nevada Gaming Commission. Dreamscape acquired the Rio from Caesars Entertainment in December 2019 for $516 million and leased it back to Caesars for $45 million a year.
Birnbaum will seek his own license to operate the Rio in 2022 and conduct a major renovation of the property.
The 30-year-old Rio reopened Dec. 22 after being closed nine months from the coronavirus. Caesars has since closed the hotel midweek starting Jan. 3.
“From what we witness and are told is that when they are open, which is Thursday through Sunday, that on those days the occupancy is robust,” Birnbaum said. “People are coming through, and there are willing patrons to come play games, eat and experience the Rio.”
Birnbaum said that industry-wide, hotel rates are down in all resorts which are sacrificing rates for occupancy. The Rio is no exception.
“I don’t think the rate at the Rio is going to blow anybody’s socks off right now because of the world we are in,” Birnbaum said. “We’re seeing that there’s a resiliency of the customer, and they are willing to come and people are still coming out. Hopefully, they will do it in a safe way.”
Birnbaum recounted his purchase in December 2019 ahead of COVID-19 “and three months later the world collapses.” Birnbaum said when the industry shut down in late March and April and if he would have guessed where the world would be in January 2021 and prospects of his getting financing he needed for the project to move forward, “I would have had a very pessimistic and dour outlook.” He said he’s surprised how that outlook would have changed.
“I have been surprised,” Birnbaum said. “Investors in the capital markets are looking through what we have all been going through and looking forward to 2022 and 2023 that that this is not a secular decline of gaming or hospitality, but an isolated event — that with a vaccine this is going to subside. I think there’s a lot of believers out there, us included, that there is an insatiable amount of pent-up demand that is going to propel us as a result of this.”
Birnbaum said they’re not fully financed yet and aren’t ready to go forward with their plans yet.
“We’re revving up the engine a little bit quicker I think than I would have anticipated,” Birnbaum said. “But we remain cautiously optimistic that people and capital markets are going to believe and view this as an interesting way to what I think is going to be a pretty compelling recovery.”