After overcoming a difficult 2020, the Sahara Las Vegas has seen a surge in customers since March and that trend should continue through the summer and fall as convention business picks up at the adjacent Las Vegas Convention Center, a casino executive told the Nevada Gaming Control Board.
The Board on Wednesday recommended approval of an application by Luis Armona and Alex Meruelo, whose Meruelo Group owns both the Sahara and Grand Sierra Resort in Reno, to pledge their membership interest in the Grand Sierra to Bank of America as part of a loan package that closed in December. The money will help with capital improvements for the Sahara, which CDC Gaming previously reported totaled $150 million, and thus facilitate the ongoing recovery from the COVID-19 pandemic. The Meruelo Group obtained the property in 2018 and changed the name from SLS Las Vegas back to its original the Rat Pack-era name, Sahara, in 2019.
“It was a tough year in 2020, but we turned the corner in March and there are a lot of things under construction,” said Mike Longi, executive vice president and CFO of Meruelo Gaming. “We’re adding a great asset to the property in our swimming pool (measuring 35,000 square feet) as we speak and four new restaurants are going to open between July and October. We will have a new showroom for ‘Magic Mike Live.’ The new pool is going to be quite an attraction.”
The pool area includes event space with giant LED walls that wrap the pool perimeter and span the length of the pool’s south side.
Longi said the Sahara is not a locals property, relying primarily on tourism and convention business. The drive-in tourism market has been strong over the last three months, he said. “Even with the property under construction, we’ve had positive cash flow during the last three months. Things are turning around at the Sahara. There has been a history there of not being successful financially, but we are right now.”
With only 1,600 rooms, the Sahara “can’t be a convention dorm,” but it still gets its share of convention-goers to Las Vegas, Longi said. That happened for the World of Concrete show at the Convention Center this week, he added.
The property stands to benefit from the opening of Resorts World Las Vegas, located across the Strip and slightly south, later this month. Longi predicted that the convention business will help the property in 2022. “The advance bookings are strong,” he said, adding that it means visitors are returning by air. “Business looks strong into the summer and into the fourth quarter.”
The Grand Sierra Resort in Reno, which relies on California visitors, finished 2020 just shy of its 2019 results and expects 2021 to double that of 2019, Longi said. “GSR is hitting on all cylinders, and the Sahara has been very profitable this year. Ultimately, Mr. Meruelo says, it will surpass GSR.”
Longi addressed questions from the Board about an article on TheAthletic.com that said the Phoenix Coyotes, which Meruelo owns, has financial woes and has a toxic work environment.
Longi said he’s been with the company for 12 years and assured the Board that the allegations of financial inadequacies are “so far off base.” He also blamed the premise of the story on a disgruntled former employee and claimed that there are no such problems at the workplace.
