The president and CEO of the Rio Las Vegas said the property has made a lot of strides since New York-based Dreamscape Companies took over operations in October 2023.
CEO Patrick Miller, who previously worked for Mirage Resorts, and CFO Chris Balaban appeared before the Nevada Gaming Control Board last week; they were recommended for licensing, which will be taken up by the Nevada Gaming Commission on Oct. 23.
Board Chairman Mike Dreitzer asked Miller to talk about the challenges the property has faced over the last couple of years and the progress that’s been made.
“The 35-year-old Rio was a beautiful locals property that also appealed to the tourist market,” Miller said. “Through disinterest from the prior owners, it came into disrepair.”
Dreamscape acquired the Rio from Caesars Entertainment in December 2019 for $516.3 million. Caesars continued to operate the property under a lease agreement, until Dreamscape took over operations in 2023.
“It’s a 90-acre property and large building itself, so we’ve been working that since (we took over),” Miller said. “Of the 2,500 rooms, we’ve remodeled 1,500, which is a large portion of the ($340 million renovation) expense. The exterior was redone, with new lighting, an exhilarating light show at night, and cleaned-up pool and convention space. A large portion of the main casino floor was redone — carpet, lighting, and typical things to make that property welcome. There’s still a lot to do.”
Miller described the Rio as a hybrid “value brand” that caters to locals and tourists. Located just west of the Strip, it’s easily accessible.
“We do draw a lot of locals, with the accessibility to the population around there.” And with a quarter of million square feet of group space, Miller said they can drive convention business to the property.
“It’s been good, but it hasn’t been easy,” Miller said. “Though the Rio has been there for 35 years, in many ways, we’re a startup. Decoupled from the prior owners, we had to start a new database, nd build that trust with the consumers, and remind them that there are new and fresh things at the Rio.”
Miller said room occupancy has been good. When the luxury brands in the Las Vegas market get more aggressive, however, it pushes down the value. “Our occupancy sits in the mid-80s overall for the year, but sometimes you have to lower rates to get that occupancy.”
As for what will happen with Rio’s vacant land, Miller said the it’s so far been earmarked for convention space. A lot of groups use it for go-karts and rodeos.
“We’ve entertained a lot of different ideas, from entertainment complexes to mixed-use residential. The excess land is Strip-adjacent and valuable. We love that we have that land, but haven’t settled on an exact component for it.”
The Peachtree Group announced in August that it had closed a $176.5 million loan for the Rio renovations. Miller said the additional capital has helped them grow, opening new restaurants and outlets for what customers want. In addition, “We still have another 1,000 rooms to remodel, and those aren’t cheap.”
CFO Chris Balaban said the Rio has a better balance sheet and better funding and has a runway to make decisions that will make it successful.
The only concern raised about the property from Board members was made in a joking fashion that they want the Carnival World Buffet to return. It’s been replaced with a food court.
“It was a crowd-drawing attraction with lines out the door,” said Board member George Assad. Assad said the food court is dead when he’s at the property. “That buffet was fabulous, especially Friday seafood night. Just a suggestion.”
Balaban said he and Miller had a discussion a couple of weeks ago to bring back the pro-forma for the buffet to see what that looks like from the capital structure.
“When you walk the floor and talk to people, everyone brings up the buffet,” Balaban said. “It’s something that resonates, and there’s a lot of pent-up demand from people who had great experiences at The Rio and want a good reason to return.”
Miller said the Rio is opening a new steakhouse this week.
