Apollo Global Management is committed to a strong return to business conventions once the coronavirus pandemic subsides, a belief reflected in its recent deal with Las Vegas Sands, according to David Sambur, the firm’s co-leading private equity partner.
Announced earlier Wednesday, Sands said it will sell the real estate of the Venetian, the Palazzo and the Sands Expo and Convention Center in Las Vegas to Vici Properties for $ 4 billion. Apollo Global buys the operations for $ 2.252 billion.
“Some may say the convention business could be stronger in a postcovid world, as you’ve distributed staff that spends less time together,” Sambur told CNBC’s Leslie Picker on “The Exchange”. “The business case of meeting once a year, twice a year, four times a year to get people together could be stronger.”
The Covid pandemic has suffered general travel damage, but there is growing optimism about the recovery as vaccines are deployed. However, many observers believe that leisure travel will go back much earlier than corporate travel due, in part, to the current ubiquity of video conferencing services such as Zoom.
For example, a recent report by the American Hotel & Lodging Association stated that “demand for business travel is not expected to return to 2019 levels by 2023.” In addition, Bill Gates, co-founder of Microsoft billionaire, predicted last fall that more than 50% of business trips will go by the way after the pandemic, as companies adopt a “very high threshold” for travel.
Admission to the Sands Expo and Convention Center in Las Vegas, Nevada.
George Rose | Getty Images
But when it comes to big business conventions, specifically, the prospects may be different from those of a small group of employees flying to a city for a meeting or two. As Sambur pointed out, a growing number of companies offer employees greater geographic flexibility even after the end of the Covid crisis, which may increase the desire to hold some large meetings a year while doing more work. remotely.
“Traditionally, business travel correlates with corporate profits and the stock market, both … are doing pretty well,” added Sambur, who took over his current position at Apollo Global in September 2019. .
As the New York-based company discussed the details of a deal with Sands, Sambur said he found reasons to have a positive outlook.
“The other thing we were able to do as part of our due diligence was to really look at the business that is in the books for the next three or four years, as the convention businesses are published with several years of in advance, ”he said. “We were able to talk to several clients and learn about their travel plans and, based on this work, we felt comfortable getting people to go to conventions again.”
Apollo Global has a more bullish outlook on overall travel recovery, said Sambur, who noted the firm’s investment in Expedia last year, among others. Sambur joined the board of the online travel company.
“We have been one of the most active in terms of expressing the vision that once people are comfortable and feel safe enough, they will resume past behaviors,” he said.
Also Wednesday, Apollo Global announced a $ 3.3 billion deal to deprive retailer Michaels of craftsmanship.
Shares of Apollo Global closed nearly 1% on Wednesday, at $ 50.41 per piece.