Updated June 7, 2021 - 11:55 am
The Rio will remain the Rio in name and theme.
But that doesn’t mean the hotel’s new owner, New York City-based Dreamscape Companies, is doubling down on the status quo.
Significant changes are coming to the 31-year-old off-Strip resort, which has lost its shine in recent years.
Those changes won’t be accomplished by running away from the Rio’s past. Instead, the new owners believe they can tap into what made the property successful in the first place while incorporating new elements guests have come to expect in a modern Las Vegas resort. To that end, they’ve assembled a team of industry experts to advise them and help implement their vision.
Rio’s new ownership group is headed by two self-described “real estate guys” from the East Coast who are making their first foray into the gaming industry via the resort.
“When we first bought it, I think everybody said, ‘You’re going to rebrand it, change it completely and blah, blah, blah, blah, blah,’” Dreamscape founder and CEO Eric Birnbaum said during a May 3 tour of the property with Review-Journal journalists. “And we said, ‘No, actually, we’re going to do the complete opposite. We’re going to lean into it and embrace what it is.’ And that to us was pretty obvious.”
Dreamscape bought Rio from Caesars Entertainment Inc. for $516 million in a deal announced September 2019. Under terms of the sale agreement, Caesars will operate Rio and pay rent to Dreamscape through December 2023 at the latest.
Dreamscape plans to renovate the Brazilian-themed property with the rainforest in mind, said Birnbaum, though he and Chief Investment Officer Tom Ellis, his longtime business partner, declined to divulge many specifics during the tour.
Birnbaum said the “underloved” Rio needs new life with “everything from the moment you walk in, to the moment you leave.” Still, he said, there’s enough “meat on the bones” for Rio to once again become a go-to place for locals and tourists alike.
“We’d love to think it’s time for a little bit of a reinvention in Vegas,” he said.
Not in Disneyland
“We can’t go wrong” by staying true to a jungle motif, Birnbaum said. He said themed resorts are generally a “played out” concept because they often resemble, in his view, a comic strip rendering of the theme.
That won’t be the case with Rio’s renovations, Ellis said. Dreamscape intends to create a more authentic atmosphere, one rooted in the imagery of Rio de Janeiro and the Brazilian Amazon rainforest, he said. Their aim is substance and an “approachable luxury” customer base.
“If you wanna go to Disneyland, go to Disneyland,” Birnbaum said.
The new owners are keeping most details of their plans close to the vest. They are hoping to begin renovations sometime in 2022, Birnbaum said.
But they are prioritizing updates to the property’s rooms with the hopes that doing so will entice trade shows and conventions to host their events at Rio’s 220,000 square feet of convention space, he said.
Dreamscape will “clean up” Rio’s cerulean, maroon and violet facade: “Exactly what that means, we’ll leave to your imagination,” Ellis said.
The resort’s sportsbook will get a facelift and remain in the same location, he said. It’s likely a third party will run the sportsbook, but they hadn’t yet decided which one, Birnbaum said.
A third party, Plano, Texas-based Aimbridge Hospitality, will manage hotel operations at Rio as the property transitions and rebrands under the Hyatt Hotels Corp. umbrella.
Dreamscape announced a franchise agreement with Hyatt in March that will bring “multiple Hyatt full-service offerings to Las Vegas.” Guests will be able to earn and spend World of Hyatt loyalty rewards points for staying at the property.
Public spaces including Rio’s gaming, retail, food and beverage, spa and fitness and pool offerings will be redeveloped, and one of the Rio’s hotel towers will be transformed into a 1,501-room Hyatt Regency Hotel, with guest rooms averaging 580 square feet. The remaining guest rooms will be branded or affiliated with one or more of Hyatt’s other brands after renovations.
Rio’s new owners say the property needs the overhaul, but they like what they have to work with: 117,300 square feet of casino space, 1,050 slot machines, 70 table games and 2,520 hotel rooms and suites, according to Caesars’ 2020 annual report.
The property also includes the Palazzo Suites, a private collection of luxury suites that have accommodated celebrities such as Elton John and Prince and that have been featured as part of CBS’ “Love Island” reality show.
Rio’s original owner, Tony Marnell, built and opened the property in 1990. He continued to run Rio until selling the property in 1999 to what was then Harrah’s Entertainment, now Caesars Entertainment Inc.
“We think the bones of this place are as good or if not better than anything else in Vegas,” Birnbaum said. “Marnell knew what he was doing when he built this. It’s just that it went into other people’s hands. It needs to be updated and brought into this century.”
To help them do that, Dreamscape has hired Marnell as the architect of record for Rio’s renovations. Marnell and his architecture division at Marnell Companies will assist Dreamscape’s development team with the project.
Marnell Companies staff members provide critical insight, as they know better than anyone else the building itself and what’s behind the walls, Birnbaum said.
In a May 19 phone interview, Marnell said he changed something significant at Rio each year he owned the property, and he and company staff feel fortunate for the chance to pick up where they left off since its sale to Harrah’s.
It’s an exciting process, Marnell said, where his architects have the chance to add some of their creativity while helping Dreamscape’s “great young people” realize their own vision for the property.
“They’ve got some really good ideas, and our goal is to implement their dream,” Marnell said. “I got to implement my dream when I was there as the owner. Now it’s their turn.”
The architects’ enthusiasm for the project is apparent to Dreamscape’s leadership team.
“Their senior guys, they’ll tell stories like, ‘I was a junior architect when we built this place. I was a superintendent on this tower. I was this on that tower,’” said Jack Behrens, vice president of asset management and development for Dreamscape, and a Las Vegas resort industry veteran.
Adds Ellis: “They’ll tell us five different stories about how they chose the faucet fixtures, and then we get to go have five more stories about how we’re gonna choose the new ones.”
Need to energize property
However coy Dreamscape executives were about sharing specifics of their plans for Rio during the May 3 tour, they were notably less so about their feelings toward the current state of affairs.
During the tour on a Monday afternoon, Dreamscape executives walked past the colorful, yet dormant, casino-floor stage while a handful of guests casually pushed buttons on slot machines. Audio speakers above their heads echoed “Celebration” by Kool & the Gang throughout the two-story gaming and shopping atrium. Birnbaum grimaced.
“This is on their mix from 1994,” he quipped.
“We’re gonna be renovating the playlist, too,” Ellis added.
Birnbaum had yet to stay a night at Rio. Superstition, he said. It gives him something to look forward to. Ellis, on the other hand, has stayed at Rio, and between 20 and 25 other hotels in Las Vegas. He said he’s trying to get to know the resort and the city.
Dreamscape executives have spent the last year planning and budgeting for renovations, of which the company has declined to share estimates.
Birnbaum is hoping to inject some energy and life into the resort. Right now, it doesn’t have it, he said. That wasn’t always the case.
Past, present and future
The resort opened in 1990 as the valley’s first all-suite resort and first with floor-to-ceiling glass in all rooms. Rio was the first Las Vegas resort to put the buffet kitchen in the dining area, open a large-scale nightclub and enhance its pool with white sand and parties. In the late ’90s, it was home to famous chef Jean-Louis Palladin’s Napa restaurant, which opened in 1997.
“In the ’90s it was pretty cool,” recalls gaming historian and UNLV ombudsman David Schwartz. “I remember I really liked … the festival, the carnival show. People on the track going above the casino, and kind of cool like the carnival floats. It was something different.”
It was the place to go in its early days for gaming coach and consultant Debi Nutton. Marnell’s Rio understood the customer and what the customer wanted, she said. The off-Strip property catered to locals and tourists, employed “the most beautiful cocktail waitresses in town” and “phenomenal” restaurants, she said.
The resort lost some of its spark and vision when the property changed hands from a sole proprietor to corporate ownership, she said.
“I probably haven’t been there in 12 years,” Nutton said.
Rio was rumored to be for sale for years and was excluded from Caesars’ planned $600 million room reinvestment programs since at least 2014, the Review-Journal reported in May 2019. Marnell said at the time: “The Rio needs a little TLC, and it hasn’t gotten a dime’s worth.”
Caesars representatives didn’t respond to an emailed list of questions regarding the property, its operations and possible investments. Birnbaum said Dreamscape’s relationship with Caesars “couldn’t be better.”
Customers at a hotel or casino expect good service from a “courteous and thoughtful staff,” Marnell said last month. They also expect the money they spend will be reinvested into the things they like about the property or new things to experience.
“That wasn’t done at the Rio. That hasn’t been done over there,” Marnell said. “The new ownership has a chance to change that.”
For Rio to be successful once again, Schwartz said, the property should embrace its location just off the Strip and consider strategies to develop the area around it.
“You build it up as something that people want to come to Vegas to see, as opposed to a place that people stay at while they’re in Vegas,” Schwartz said.
Nutton said she thinks Dreamscape is on the right track. She praised the company for its franchise deal with Hyatt and bringing in expertise via Marnell and Bill McBeath, president and CEO of The Cosmopolitan of Las Vegas, who is consulting for the project. McBeath couldn’t be reached for comment.
“When you talk about some of the people that they’re talking to as consultants, I think once you know where you’re going and your true vision, I think you’re in a great spot,” she said. “I don’t know that there’s a downside.”
‘Doing it the right way’
Rio is Dreamscape’s first major acquisition as a company. In Birnbaum’s ideal world, it will be the first of many.
Since purchasing Rio in 2019, the company has bought The Warwick hotel in Philadelphia last year and The Saint Hotel in New Orleans in April. Birnbaum also previously developed the Goodtime Hotel in Miami from the ground up, with Pharrell Williams and nightlife guru David Grutman. The Goodtime Hotel opened in March.
Dreamscape is focused on retail, hospitality, residential, gaming and entertainment, according to its website. Company executives view real estate as “a source of both value and diverse cultural engagement,” the website says. “By galvanizing bespoke and specialized experiences, we strive to nurture distinctive, lively and worldly communities.”
Birnbaum and Ellis have worked together at various New York City real estate development companies since 2003., when they were both working at office and retail space company Vornado Realty Trust. Ellis joined Birnbaum when the latter led his own hospitality and residential development company, ELB Holdings, from 2008 to 2014, according to biographies on Dreamscape’s website
Birnbaum then co-founded Imperial Companies with former Vornado President and CEO Michael Fascitelli in 2014. Ellis was vice president until 2019, when he joined Birnbaum at the latter’s newly founded Dreamscape.
The company is looking to acquire and develop other real estate projects throughout the country, said Birnbaum, noting they’re looking in Las Vegas, too.
“If you know of something, tell us,” Birnbaum said.
But in the meantime, Rio’s new owners want to be viewed as good stewards of the property and good citizens of Las Vegas, he said. They “want to do right by this place” and let the finished product speak for itself.
“I hope the local, true Las Vegas resident who knows the Rio and has history with the Rio will be proud because I think we’re doing it the right way,” Birnbaum said.