Posted on: December 7, 2022, 04:14h.
Last updated on: December 7, 2022, 04:38h.
Employees at the Venetian Las Vegas will have some extra jingle in their pockets this holiday season. Operator Apollo Global Management is distributing $1,500 bonuses.
In total, the private equity firm that operates the iconic Strip venue is doling out $11 million to 7,000 full-time and flex-time workers. Those staffers are receiving the same amount regardless of role or for how long they’ve worked at the Venetian.
Venetian CEO Patrick Nichols said the cash reward to employees is the result of the integrated resort delivering outstanding performance this year. At a meeting with the Nevada Gaming Control Board (NGCB) last month, Venetian executives highlighted the venue’s strong showing in 2022.
We’re run-rating north of $600 million of (adjusted earnings) for the business relative to 2019,” Venetian CFO Robert Brimmer told the NGCB. “We’re up 27%. This is a very broad-based recovery across our business. You’re aware of the strength in the gaming numbers, but the hotel, food and beverage, and most importantly, our meeting and convention business is recovering very nicely.”
The meeting was held so Apollo could seek approval to distribute a $620 million dividend to investors. Nevada regulators later granted that move. As of October, Venetian had $300 million in excess cash on its balance sheet, indicating the dividend and employee bonuses are affordable for the operator.
Apollo Off and Running with Venetian
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. Apollo paid $2.25 billion for the operating rights to the venues, while VICI shelled out $4 billion for the real estate. The transaction closed earlier this year.
Venetian is experiencing better-than-forecast results across the board, with Brimmer noting the venue outperformed in terms of occupancy rates, gross gaming revenue (GGR), food and beverage sales, and meetings and convention business.
The point about vibrancy in convention activity is vital, because industry observers expect that will be a source of strength for Strip operators in 2023.
Following COVID-19 shutdowns, many employers and staffers are ready to return to face-to-face interactions with colleagues and clients. Various surveys confirm that’s still an integral way of conducting business, and Las Vegas remains one of the most desirable destinations to do just that.
Apollo Capital Committed to Venetian
Apollo isn’t resting on Venetian’s laurels. Rather, the private equity firm is overtly displaying its commitment to improving the venue.
In October, it was revealed Apollo is planning to allocate $1 billion or more to enhancing the Venetian. That’s a tidy sum, particularly when Las Vegas Sands spent $1.5 billion to build the venue, which opened in May 1999.
The private equity giant owns gaming assets of various types around the world, and signaled at the aforementioned NGCB meeting it’s interested in adding to that portfolio.