How’s the Rio doing? You guys seemed to be promoting the Rio within the past year. Haven’t seen anything lately. Naturally the internet is all over the place. You’re more reliable. Anything new?
Well, this has to be another two-part answer, though all in one today. The first is the perspective of walking the floor, which we just did to try out the happy hour at Luckley's, and the second from the top in terms of ownership and management.
From the floor, we can say that the Rio has been and is still trying very hard to return to its former glory, as evidenced by that happy hour, which we liked quite well (and will post our review within the month). Since Dreamscape took over from long-negligent Caesars, they remodeled nearly 1,500 rooms in the Ipanema Tower. The food and beverage product has also been completely revamped, with the Canteen Food Hall (though we've questioned the wisdom of replacing the Carnival World Buffet), James Trees' High Steaks, Luckley replacing the tired All American Grill, Kitchen Table replacing Hash House a Go Go, Tacos del Rio replacing El Burro Burracho, and adding the popular Eggslut to the lineup. In addition, the entertainment offerings are strong: Penn & Teller as always, the long-running Wow -- The Vegas Spectacular, plus the well-reviewed (including by us) The Empire Strips Back, the Comedy Cellar, and Kiss-themed mini-golf.
We should also say that the Rio has five coupons on the MRB. You can have a fun time there and save a bunch of money using the room coupon (30% off and no resort fee) and food, drink, and gambling coupons.
In short, a lot of money, effort, and thought have been poured into the place over the past few years.
To what avail? Here comes part two of this answer.
The shakeup in restaurants have been followed by management and personnel changes. Earlier this year, it was revealed that private equity firm Kennedy Lewis Investment Management was the new majority owner of the Rio. Displaced to minority-owner status was Dreamscape Cos.
This didn't bode well for the joint. Dreamscape had a vision, while Kennedy Lewis looked suspiciously like bean counters. One of its first moves was to buy out veteran casino executive Bill McBeath, late of Aria and the Cosmopolitan of Las Vegas and now ex-Rio, too. He was quickly followed out the door by the CEO, CFO, and vice presidents of marketing and sales. Not too long afterwards, the general counsel and vice presidents of casino operations and revenue optimization: gone.
Another bean-counting Kennedy Lewis move was to charge customers for using the parking valets. That might fly on the Strip, but at a struggling casino a mile away with the Gold Coast and Palms right across the street, it was ... unusual.
A word about private equity. It’s had a largely disastrous track record in the gaming industry over the last 20 years, laying waste to several companies and independent properties. True, Apollo Management is now running The Venetian to great acclaim, but it had a painful learning experience during the Great Recession, when it overpaid for Caesars Entertainment and drove it into bankruptcy. Second time lucky, we guess.
Caesars, meanwhile, kept coming around like the proverbial bad penny. Many of the Rio's newer hires had Roman Empire pedigrees, which was hardly encouraging, given the slipshod and slovenly neglect the company had foisted on the place.
One of new management’s latest moves, however, was probably not a bad one. It pink-slipped the superannuated dinner show Marriage Can Be Murder. Curiously, its replacement is the comparably ancient Tony & Tina’s Wedding. One step forward, two steps back.
Anyway, The Rio is recalibrating its marketing to go after the Palms and Gold Coast, both locals casinos, which scarcely jibes with cheeseparing moves like charging for valet parking.
For the sake of its employees, the fact that it has one of the most beautiful exteriors in Las Vegas (especially at night), and our MRB coupons, we hope the Rio comes out in one piece. But where private equity goes, one is usually well advised to be apprehensive.
