Apollo Global Management is betting on a strong return to business conventions as the coronavirus pandemic eases, a belief reflected in its recent deal with Las Vegas Sands, according to David Sambur, the company’s private equity co-leader.
Announced earlier Wednesday, Sands said it would sell real estate for the Venetian center, Palazzo and Sands Expo and Las Vegas Convention Center to Vici Properties for $ 4 billion. Apollo Global buys $ 2.25 billion in operations.
“Some might say that the conventional business could be stronger in a post-Covid world because you’ve distributed less time together,” Sambur told CNBC’s Leslie Picker on The Exchange. “The business case for meeting once a year, twice a year, four times a year to bring people together could actually be stronger.”
Travel has generally been affected by the Covid pandemic, but there is growing optimism about recovery as vaccinations are implemented. However, many observers believe that leisure travel will return long before corporate travel, due in part to the ubiquity of video conferencing services such as Zoom.
For example, a recent report by the American Hotel & Lodging Association said that “demand for business travel is not expected to return to 2019 levels by 2023.” In addition, Bill Gates, co-founder of Microsoft, predicted last fall that more than 50 percent of business travel will go through the post-pandemic path as companies adopt a “very high threshold” for travel.
Entrance 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 for a small group of employees flying into a city for a meeting or two. As Sambur noted, an increasing number of companies offer employees greater geographical flexibility even after the end of the Covid crisis, boosting the desire to hold several large meetings a year while working more remotely. .
“Traditionally, business travel is correlated with corporate profits and the stock market, both … are doing quite well,” added Sambur, who took over his current position at Apollo Global in September 2019.
While the New York company analyzed the details of an agreement 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, because the convention’s business book is published in a few years. in advance, “he said. “We were able to talk to more customers and find out about their travel plans, and based on that work, we felt comfortable that people would return to attending conventions.”
Apollo Global has a more optimistic outlook on travel recovery in general, Sambur said, pointing to, among other things, the company’s investment in Expedia last year. Sambur joined the board of the online travel company.
“I was among the most active in expressing an opinion 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 make private goods and crafts retailer Michaels private.
Shares of Apollo Global closed Wednesday at nearly 1%, at $ 50.41 a piece.