Apollo Planning To Spend $1 Billion On Venetian Remodel
Posted on: October 16, 2022, 10:17h.
Last updated on: October 16, 2022, 10:17h.
Apollo Global Management is planning to spend more than $1 billion to update the Venetian Resort Las Vegas, representing one of the most significant updates to a Strip venue in years.
In a recent interview with Travel + Leisure, Venetian CEO Patrick Nichols said expenditures to refresh the glitzy venue could be “north of $1 billion” and will be all encompassing “touching every area of the guest experience.” He took the helm at Venetian in June after previously serving as the general manager of the Cosmopolitan.
In March 2021, Las Vegas Sands (NYSE:LVS) announced the sale of the Venetian, Palazzo and Venetian Expo. to Apollo and VICI Properties (NYSE:VICI) for $6.25 billion. Private equity behemoth Apollo is paid $2.25 billion for the operating rights to the venues, while VICI is shelled out $4 billion for the real estate. The transaction closed earlier this year.
Apollo previously controlled Caesars Entertainment, and today it runs Great Canadian Gaming Corp., Italy’s Gamenet Group S.p.A, and is frequently tied to a slew of gaming industry mergers and acquisitions rumors.
Venetian Remodel Good Deal for VICI
Apollo directing $1 billion or more to enhancing Venetian is a boon for VICI because under the terms of the lease structures that are common in the gaming industry, operators not landlords are responsible for property maintenance and refurbishments.
VICI is the dominant property owner on the Strip, controlling the Venetian and associated assets and Caesars Palace, among other prestigious venues. The real estate investment trust (REIT) also owns the property assets of Excalibur, Luxor, Mandalay Bay, MGM Grand, Mirage, New York New York, and Park MGM, as well as various regional casinos operated by MGM Resorts.
Venetian opened in May 1999. The construction cost was $1.5 billion, making it the most expensive integrated resort at that time.
Translation: Apollo is spending a significant percentage Venetian’s total construction cost to enhance the venue and a price comparable to what some Strip venues could sell for. The investment could pay dividends for the private equity company because competition on the Strip is fierce, particularly for the higher end clientele venues such as Venetian typically attract.
Venetian Remodel Details
Palazzo is already showing some signs of advancing construction as noted above, the broader Venetian remodel will be broad.
CEO Nichols told Travel + Leisure the pool deck will be completely overhauled, a $50 million addition TAO Beach Dayclub will be performed and a slew of new dining options will be added with some debuting as soon as next year. Nichols notes Venetian is a themed hotel and that’s not changing, but the venue is evolving as is the case for the city after which the property is fashioned.
“If we are able to lean into that through the spirit of Italy and discovery, we are not going to look like just another hotel that has refreshed their rooms,” he told Travel + Leisure.