Apollo Global bets on the resumption of the convention with Las Vegas Sands

Apollo Global Management is betting on a strong return from trade agreements once the coronavirus pandemic subsides, a belief reflected in its recent deal with Las Vegas Sands, according to David Sambur, the company’s co-head of private equity.

Announced earlier on Wednesday, Sands said it would sell real estate at the Venetian, Palazzo and Sands Expo and Convention Center in Las Vegas to Vici Properties for $ 4 billion. Apollo Global is buying the operations for $ 2.25 billion.

“Some may say that convention business could be stronger in a post-Covid world because you have distributed staff who spend less time together,” Sambur told CNBC’s Leslie Picker on “The Exchange.” “The business case for getting together once a year, twice a year, four times a year to bring people together might actually be more solid.”

Overall, travel has been affected by the Covid pandemic, but there is growing optimism around a recovery as vaccinations roll out. However, many observers believe that leisure travel will return long before business travel is due in part to the ubiquity of video conferencing services like Zoom.

For example, a recent report from the American Hotel & Lodging Association stated that “demand for business travel is not expected to return to 2019 levels until 2023”. What’s more, Bill Gates, Microsoft’s billionaire co-founder, predicted last fall that more than 50% of business travel would pass by the roadside after the pandemic, with companies adopting a “very high threshold” for travel.

But when it comes to large business conventions, in particular, the outlook may be different from that of a small group of employees who travel to a city for a meeting or two. As Sambur noted, a growing number of companies are offering employees greater geographic flexibility even after the end of the Covid crisis, potentially increasing the desire to hold a few large gatherings per year as more work is done at distance.

“Traditionally, business travel has been correlated with corporate earnings and the stock market, both of which are doing quite well,” added Sambur, who returned to his current role at Apollo Global in September 2019.

As the New York-based company reviewed the details of a deal with Sands, Sambur said she found reasons to have a positive outlook.

“The other thing that we were able to do as part of our due diligence was to really look at the cases that are on the books for the next three or four years because the convention cases take several years to the advance, “he said. “We were able to talk to several clients and get a feel for their travel plans, and based on that work, we were confident people would come back to the conventions.”

Apollo Global takes a more optimistic view of the travel recovery as a whole, Sambur said, highlighting the company’s investment in Expedia last year, among others. Sambur has joined the board of the online travel company.

“We have been among the most active in terms of expressing an opinion that once people are comfortable and feel safe enough to do so, they will resume their past behaviors,” he said. .

Also on Wednesday, Apollo Global announced a $ 3.3 billion deal to privatize arts and crafts retailer Michaels.

Apollo Global shares closed Wednesday up nearly 1% at $ 50.41 each.