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Should Boyd Gaming buy Rio All Suites Hotel and re-brand it as Stardust?

Last edit: jucifers on Thursday, 22nd September 2016 11:02 am
Last response by wpsteel66 1st October 6:56pm

Boyd just netted $600 million from selling their half of Borgata to MGM. Should Boyd Gaming buy Rio All Suites Hotel and re-brand it as Stardust?


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 vespajet responded on Thursday, 22nd September 2016

Boyd probably needed the Borgata money to pay for their recent buying spree in Vegas. Back in April, Boyd made a deal to buy Aliante for $380 million and a few days later, made to deal to buy Cannery Casino Resorts for $230 million. These two deals will give them three new properties in Las Vegas, so they probably won't be looking to acquire any additional properties in town for a while.

The properties in the Caesars portfolio are in a bit of a flux right now because of all of the legal wrangling going on with the bankruptcy of one of the Caesars companies. They may have to transfer some assets to creditors in order to get the bankruptcy reorganization approved, so the Rio could be in play as an asset they give to creditors (Similar to how Stations gave Aliante to creditors, which includes the two private equity firms that own Caesars.).

 jucifers replied on Saturday, 24th September 2016

Thanks for the info. $600 million netted from sale of Borgata. $610 million paid for Aliante and Cannery Casinos. So it's a wash. Disappointed that Boyd doesn't acquire properties closer to the Strip, but maybe Boyd is better off focusing on the locals market.

 RateVegas responded on Thursday, 22nd September 2016

Should they buy it? I dunno.

But if they did, why re-brand it? It would only make sense if the Stardust name somehow was more valuable than the Rio and brought in better players.

I have no evidence to back this up but the folks I saw staying at The Stardust when I stayed there right before it closed sure didn't look like an upgrade from the folks at The Rio.

Given that a re-brand costs at least a few million bucks from signage to neon to napkins and uniforms - not sure how this would make sense.

 levans responded on Friday, 23rd September 2016

If they did I doubt they would change the name. People would still call it the Rio so there is no upside to doing so.

 jucifers responded on Saturday, 24th September 2016

Why should Rio change its name? That's a good question.

I'm just throwing this idea out for discussion without suggesting that I am right:

There's an old saying in the advertising business: If it doesn't say 'new and improved', it better be '10 percent off'.

Rio is a run-down brand. Everyone associates Rio with crappy gambling odds. Rio's nearby competitors are Palms and Gold Coast, two casinos with gambling odds as good as any you can find in Downtown Las Vegas. Stardust on the other hand is a name synonymous with good gambling odds. Changing the name to Stardust would send a message that great gambling odds have returned to this hotel.

Whereas Rio is a damaged brand, Stardust is a classic brand. Stardust has been closed for ten years now. Over time, bad memories of Stardust's final years have faded and nostalgia for Stardust is higher than for any other closed casino, with the possible exception of Desert Inn.

Finally, there's the free publicity angle. The Stardust sign is the most recognizable icon of Las Vegas that no longer exists. It will be a huge national news story, if Boyd ever decides to bring back the Stardust hotel complete with its classic signage. How many people would want to attend a grand opening of a new and improved Stardust Casino? Get people in the door, give them good gambling odds and they will come back.

For an example of what re-branding can achieve, consider how Caesars transformed Imperial Palace into Linq. By contrast, Tropicana sank hundreds of millions of dollars into renovations while keeping the Tropicana name. Which company made the right decision: the company that re-branded or the company that didn't?

 NeverJustJ replied on Wednesday, 28th September 2016

Good points, although I think Rio would have to go dark...not for long, but for close to as long as you can suspend your gaming and alcohol licenses in NV without losing order to successfully transition. Then come back to life as Stardust. I think it could work, but can Boyd afford the closed time? On the other hand, if Boyd is going on a buying spree, wouldn't it make more sense for them to get back on The Strip (not that anything is, "officially," for sale on The Strip...but we've all heard things...right...???...!!!...)

 wpsteel66 responded on Saturday, 1st October 2016

Boyd owns Gold Coast next my guess would be no, especially since Rio will take some serious cash to upgrade.