Real Estate and Hospitality with Fontainebleau President (with Carol Massar, Tim Stenovec)

K-shaped recovery is the definitive hospitality trade. Fontainebleau's President confirms the high-end consumer is robust, fueling pricing power. Higher rates are a feature, not a bug: they create a supply moat by killing new projects, entrenching incumbents. With a strong '26 convention outlook and 'bleisure' tailwinds, the signal is to be long premium operators who can monetize this bifurcation. The mass-market consumer remains a clear short.

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Fontainebleau Development 1.8
Real Estate
Brett Mufson 7.0

Real Estate and Hospitality with Fontainebleau President (with Carol Massar, Tim Stenovec)

Carol Massar

Questioning if the cooling in Las Vegas is a result of higher fees.
Brett Mufson

2025 was a year of normalization after record years. 2026 looks like a banner year for meetings and groups. Consumer spending is up, but there is a clear bifurcation (K-shaped economy). We built our product for the luxury consumer.
Tim Stenovec

Questioning how much pricing power they have at the higher end.
Brett Mufson

We are in early years of growth, growing year-over-year. Conventions are about 50% of our business. The 'bleisure' trend (business + leisure) is a big opportunity.
Carol Massar

Questioning how the rate environment affects their projects.
Brett Mufson

Interest rates are a double-edged sword. New projects are very difficult to get built. But we own an asset in a market with zero supply in 15 years, so barriers to entry are higher for us. Consumer pricing is offsetting higher rates for owners and operators.
Tim Stenovec

Questioning if anything gives him pause.
Brett Mufson

The only thing that gives pause is that the consumer is hurting. We invest at the high end, so we are fortunate. Our customer has about $150,000 net worth and takes two trips a year. Travel is down, but premium cabins (like Delta's 60% of revenue) are our business.

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