It may not be the south of France, but gamblers at the more than 50-year-old Riviera Holdings' Riviera Hotel & Casino probably don't care. The casino, located on the Las Vegas Strip, has about 900 slot machines, 35 gaming tables, a keno lounge, poker room, a sports-betting club, and bingo. The Riviera also has a 2,100-room hotel with bars, restaurants, a convention center, and entertainment such as An Evening at La Cage (a female impersonation show). The Riviera opened in 1955. The company filed for Chapter 11 in 2010 and exited bankruptcy in 2011.
Riviera's casinos are marketed to mid-level gaming customers (as opposed to high-stakes bettors). It does so by offering lower table game limits, stricter credit policies, and an emphasis on slot machine play. The Riviera Hotel & Casino is located on the north end of the Vegas Strip, an area that has declined in value since its heyday in the 1980s. The somewhat isolated location is now home to abandoned development projects and low-end shops.
Feeling the effects of the economic recession, the company experienced a decline in occupancy at its hotels, and average room rates dropped as a result. In 2010 it reported a net loss of more than $20 million, and its revenues decreased to $119 million, down from $134 million the year before. Riviera Holdings negotiated with its lenders after defaulting on heavy debt loads, and had hoped to avoid a bankruptcy filing. Unable to weather the storm, the company filed for Chapter 11 in 2010 after voluntarily delisting its common stock from NYSE Amex in 2009.
As part of the bankruptcy reorganization completed in 2011, Riviera shareholders were wiped out, while about $260 million of the company's debt was replaced with loans of $50 million and $20 million, and a $10 million working capital agreement. Under the new ownership structure Barry Sternlicht, chairman of Starwood Capital, purchased 79% of the company; Derek Stevens, 50% owner of the Golden Gate Casino, acquired the remaining 21%. Sternlicht became the new chairman and Andrew Choy, a former executive at Las Vegas Sands' The Venetian in Las Vegas and Macau, took over as CEO.
While not committing to a major redevelopment of the Riviera Hotel & Casino, Sternlicht has stated that he plans to celebrate the heritage of the 55-year-old resort. Riviera Holdings hopes that its bankruptcy reorganization will help breath new life into the property. The new owners are sprucing up the casino floor and restaurants, and the resort is adopting a strategy of targeting out-of-town visitors and convention business.
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