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Gaming Guru

Rod Smith
 

Harrah's Breaks Ground on Rio Expansion

3 June 2004

LAS VEGAS -- Harrah's Entertainment kicked off a 60,000-square-foot expansion of the Rio Pavilion Convention Center on Wednesday with a ceremonial pouring of concrete.

The $39 million expansion will increase the overall size of the Rio's convention center to 160,000 square feet, making it the eighth-largest hotel meeting space in Las Vegas.

Joe Greff, gaming analyst at Fulcrum Global Partners, an independent Wall Street investment research firm, said the expansion is a smart move for Harrah's, which owns the Rio, because of the surge in convention business interested in coming to Las Vegas and the limited facilities the company has to peddle.

"Just look at the Mandalay Convention Center. This won't be as significant (because it is much smaller), but it'll help the Rio which has grown well for the past six quarters," he said.

Rio general manager Marilyn Winn said the success of her property is a direct function of how well it does with group sales, its casino operations and independent travelers.

"This will help us retain and expand into the meeting business and increase the niche we've carved out in the midsize group market," she said.

Hotel Operations Vice President Michael Massari said customers have been demanding added space in the form of "smaller" break-out rooms -- big meeting rooms that large groups can divide for smaller groups.

With the expansion, scheduled to be completed next spring, the Rio will be able to host 17,000 people in more than 300 different meeting configurations.

Other Wall Street sources said the move to snap up a larger share of the surging convention business was smart, but there could be better uses for the land and the company's capital.

"It will elevate the competitive position of the Rio, given the demand for convention space citywide. However, I'm not sure it's the best use of the company's land given it already has one (convention center). I'd rather see them invest on the Strip," Deutsche Bank analyst Marc Falcone said.

Harrah's executives have also said they are interested in adding a third hotel-casino tower at the Rio site, probably after Harrah's decides on an expansion site on the Strip.

Harrah's Breaks Ground on Rio Expansion is republished from Online.CasinoCity.com.