Reno eyes raising hotel room rates
November 27, 2006
RENO – Reno’s hotel rooms are a bargain hunter’s delight – and the travel industry’s dismay.
The city’s long-standing reliance on using cheap room rates to lure tourists into the casinos means hotels are charging far less per night than just about any other major city in the West.
Sacramento averages $95.97 a night compared to $72.28 in Reno, according to Smith Travel Research. And anybody with access to the Internet and a little patience can stay in some of the Reno area’s best-known hotel-casinos for far less than that.
Hotel operators say return guests expect a bargain in Reno.
But the head of the Reno-Sparks Convention & Visitors Authority says they’re selling themselves short.
Ellen Oppenheim said visitors who see high-rise hotel rooms priced at motel rates may wonder what they’re getting themselves into.
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The authority gets about 80 percent of its operating budget from its share of county room taxes. It uses the taxes to advertise the region to travelers and conventions in hopes of increasing tourism.
Some hotel operators agree they should be charging more.
“Reno has undervalued rooms,” said Bill Hughes, marketing operations director at Peppermill. “We can do more as far as rates go. I think we’ve gotten smarter about that.”
The new all-suite tower being built at Peppermill that will open next year is charging near $200 for its group rates offered to special events and conventions, he said.
Oppenheim said the traditional casino model has changed, but Reno is behind the trend.
“If you look at Las Vegas, 15 years ago, rooms were a loss leader there, as well,” she said. “Now, they have moved to a model where every element of the business is a profit center. And their gaming is just as successful, maybe more successful than ever.”
The low rates also prevent more national chains from opening in Reno, Oppenheim said.
“We don’t have any national, traditional convention and business properties in the marketplace now,” she said of the lack of a Sheraton, Hilton or other major brands. “I think it is going to be difficult to attract more of those at the average rates we are running. We need the Marriotts, Sheratons, Omnis. Just as there are many members of frequent traveler programs for airlines, many people also have loyalty programs for hotels.”
She is optimistic rates will continue to rise with Peppermill and Grand Sierra Resort remodeling, and Station Casinos planning two Reno properties.