Tuesday, February 24, 2004
Copyright © Las Vegas Review-Journal

JOHN L. SMITH: Despite age, debt and megaresort trend, Riviera hangs tough

Whenever I pass the Riviera, I get the sense I'm watching a Las Vegas casino industry version of "Survivor."

Long after most of its contemporaries have been reduced to rubble and replaced by sparkling megaresorts, the Riviera refuses to quit.

Not that the venerable casino, which opened in 1955 and once was home to the town's hottest acts, hasn't tried to keep up. Despite a long-term debt load that threatens to crush the company, the Riviera flaunts a refreshing sort of Vegas traditionalism in decor, shows and casino marketing. While the billion-dollar club of new resorts has captured the high rollers and Hollywood hipsters, the Riviera works the middle market like a carnival pitchman.

He doesn't get much press, but Riviera President Bob Vannucci might be the hardest-working man on the Boulevard. To hear him tell it, the Riviera has the skeptics fooled. Sure, it's a little kitschy, but in Las Vegas a good value never goes out of style.

While he admits the Riviera doesn't book the high rollers like it used to, it has plenty of value-driven casino customers. Vannucci caters to union conventions, national dart and bar pool tournaments, big reunions and small trade shows, an average of more than 100 a year.

The Riviera's size is deceiving. With 2,070 rooms, it's diminutive only by modern Strip standards.

"I was laughing the other day," Vannucci says. "In the early 1980s, the Riviera was one of the 10 largest hotels in the world, and today we're the 21st largest hotel on the Las Vegas Strip. It kind of tells you where things have gone the last 20 years."

Where the Riviera once booked the hottest acts at the highest salaries and was known as a celebrity hangout -- one denizen, Dean Martin, took out a percentage ownership as if to symbolize its Rat Pack era cool -- it now relies on the popular-but-parodied "La Cage," "Crazy Girls" and "Splash" variety shows.

Vannucci knows no one who sees "Crazy Girls" is likely to confuse it with "Mystere," but the value-driven productions are filled night after night with customers who appreciate meat-and-potatoes entertainment amid endlessly overpriced fare.

"It's a comfortable property," he says proudly. "Our employee tenure is probably the longest in Las Vegas. We encourage our employees to stay. We want our employees to know our customers by name. We have employees who know customers' wives and kids -- and not just the hosts and managers: I'm talking about the line-level employees."

Vannucci acknowledges that marketing conventions isn't as glitzy as catering to high rollers and the Hollywood set, but he also knows that from 1989 through 2002, there was a rock-solid 8 percent growth rate in that end of the business while other visitor growth expanded by 5.2 percent. And he likes to hear that industry analysts are not only predicting increased growth in Las Vegas' share of the national convention industry, but also increases in the number of smaller meetings and conventions coming here.

In recent months, the Riviera has generated two distinct rumors. One, that its long-term debt eventually will sink it and force yet another business reorganization.

Two, that with the north Strip's prospects on the rise with the addition of Wynn Las Vegas and various upscale condominium projects, it's ripe for a takeover. The name that surfaces most often belongs to recent Nevada gaming licensee Donald Trump, who last year purchased $2 million worth of Riviera Holdings stock and fueled rumors he might be in a buying mood.

But one source close to Trump says he was setting up his licensure and making a statement on the north end of the Strip, where he has been rumored to be interested in teaming with Frontier owner Phil Ruffin to build a high-rise condominium project.

For 2003, Riviera's corporate net earnings were up slightly while its gross earnings were slightly down.

What does it mean?

Only that the Riviera is still surviving after all these years.

When you consider the fate of the Dunes, Sands, Landmark and Hacienda, that's really saying quite a lot.

John L. Smith's column appears Tuesday, Wednesday, Friday and Sunday. E-mail him at Smith@reviewjournal.com or call 383-0295.