Reno room rates are climbing
A combination of factors is pushing room rates in Reno-Sparks to record levels.
If the current average daily rate of $94.95 holds through the fiscal year ending June 30, it would be the highest rate ever recorded for the Greater Reno-Tahoe destination, says Jennifer Cunningham, interim managing director of the Reno-Sparks Convention and Visitor’s Authority.
Thanks goes to Tesla, Switch, Mother Nature, the bowlers, business travelers, conventioneers, and several other factors for the rise in room rates.
“It’s all these different factors coming together,” says Cunningham.
The regional economy has been on the upswing for several years, and the boost in business buzz surrounding Reno-Sparks has been one of the primary factors for rising room rates. Companies such as Tesla and Switch, along with the many smaller corporations that have moved into the area over the past few years, have led to large spikes in corporate and business travel.
But that’s just one of many factors.
Northern Nevada/Northern California finally saw some serious snow this winter, so recreational travel is up over last year as skiers and snowboarders took to the ski slopes by the thousands to release several years of pent-up demand. And interest in carving turns at regional resorts isn’t limited to drive-in skiers in Sacramento Valley and Greater Bay Area. Epic El Niño winters have a far-reaching effect.
“We get a lot of international skiers,” Cunningham says. “When they hear we have an epic ski season, and they are thinking about next year’s trips and have some real strong loyalists in these countries that love to come to the West Coast, then suddenly we are in the game again.”
The student population at University of Nevada, Reno continues to grow, Cunningham adds, and more parents, family and friends are staying overnight as they scout the college or visit. Regional hotels also have re-invested heavily to upgrade and create fresh appeal to new and returning visitors.
It’s a bowling year, so thousands of bowlers are booking multiple nights as they compete at the National Bowling Stadium. The gentrification of the MidTown District and addition of several craft breweries and unique eateries continues to lure in younger travelers who relish in distinct tourism experiences.
And Reno finally is getting long-overdue recognition as a cool place to visit, Cunningham says.
“Reno has been getting on all these fabulous and fun little thrill lists as a top destination that are cool spots to go visit,” she says. “We’ve had a lot of success working with some very well-followed media influencers. Those kinds of social-network hits really are starting to get a lot of traction with a younger demographic and are driving new business.”
The average daily rate for rooms in Washoe County is up 7.3 percent year-over-year. Cash-occupied nights through February were up 9.2 percent, or an additional 165,000 room nights booked through the same month in 2015. That’s an additional $27 million in revenue from all forms of lodging in Washoe County, which translates into a 17.1 percent boost in revenue for the RSCVA, which gets its funding from taxes on rooms.
With a healthier budget, the RSCVA can spend more dollars marketing the region and extend its reach to a much broader audience, Cunningham says.
“Ultimately it puts more money into our budget to market the region — it’s a really positive cycle,” she says. “If we have more money to market the region we can expand out into additional markets, which is where we are looking at right now. And whenever we add air service to new markets it drives new business into region. With new business, more people come to the hotels and they can charge higher rates — it just continues.”
Rick Murdock, vice president of sales and marketing at Eldorado Hotel Casino, says the boost in the region’s average daily rate provides a positive double-whammy for area hoteliers.
More revenue not only gives regional resorts an economic lift, but the increased occupancy allows them to raise their rates. That strengthens the overall brand of Greater Reno-Tahoe, Murdock says. It’s in stark contrast to the depths of the recession, when rooms were dark so often that some hoteliers offered mid-week rates as low as $25 a night just to get warm bodies in empty beds.
“By lifting our rates, Reno becomes a better destination,” Murdock says. “We think a lot of ourselves, and we are worth it. (Reno) is a growing place, and a lot of things are going in the right direction here.”
In addition to the many factors mentioned above, Murdock highlights Reno’s increased convention business and higher room occupancy during the weekends and midweek.
In Reno’s heyday as a gambling destination, he says, business travel to the region was a 70/30 mix — 70 percent tourists and 30 percent business travelers. Today that demographic is more like 55/45.
“It is unbelievable; it just means our destination is becoming more well-rounded. Tourism, corporate/conventions — it’s all fitting into the puzzle very nicely right now. Reno is on a roll.”
Reno’s median home price jumped to $413,405 in November, a 4 percent increase from the same month a year ago. Meanwhile, across greater Reno-Sparks, November’s median price of $400,000 remained unchanged from October.