Reno tops 5 million visitors for 1st time in a decade; now the pressure's on to build on that momentum
After going through the toughest recession in its history, Northern Nevada has seen its fair share of economic development victories. Here's a list of some of the major developments for the region in recent years.
The Biggest Little City’s tourism sector had more than 5 million reasons to be happy last year.
For the first time since 2007, total visitor counts for people visiting Washoe County, including Reno-Sparks annual events, topped the 5 million mark, according to the Reno-Sparks Convention and Visitors Authority.
The numbers are a long time coming for industry watchers. The last time visitor counts cracked the 5 million mark, George W. Bush was president and Beyoncé was burning up the Billboard charts with “Irreplaceable.”
The RSCVA and policymakers cited several factors for the increased visitation numbers: a strong U.S. economy, a renewed push to market the Reno-Tahoe area and buzz from the arrival of high-profile companies such as Apple, Google and Tesla.
With more visitors, however, come more challenges. The increased tourism coincides with a growth spurt that is straining infrastructure and housing. The tourism authority, meanwhile, is under increased pressure to capitalize on the area’s momentum and further boost room night numbers for area hotel-casinos and lodging facilities.
Buoyed by growing visitor numbers and key victories such as the signing of two major conventions, some board members believe that the RSCVA’s current goals are stuck in a post-recession, old Reno mindset.
“We overshot our goals (and) we need to now revamp that as a board,” said Bob Lucey, Washoe County commissioner and RSCVA board chairman. “We need to re-evaluate and make sure (those goals) fit this board and what the needs are of our new community, not where we were two years ago.”
‘We’ve become relevant’
Reno’s latest visitor counts are a far cry from the recession years.
When the RSCVA started tracking visitors in 2002, the area was in the midst of an economic boom that saw nearly 5.7 million tourists. Once the housing bubble popped five years later amid a nationwide recession, tourism took a big hit.
Visitor counts fell by nearly a quarter to as low as 4.3 million in 2011. The same year also represented a tumultuous time at the RSCVA, which saw the resignation of former CEO Ellen Oppenheim. She was replaced by Chris Baum, whose tenure on Reno-Tahoe’s largest convention and visitors bureau ended up being a rocky one. Baum was eventually fired in 2015.
It was a low point in the RSCVA’s history, with a reduced marketing budget, low staff morale and frustration among board members leading Reno Mayor Hillary Schieve to call it “one of the worst boards” she has served on.
The frustration from the past resurfaced early last year when then-board member John Farahi, CEO of Atlantis parent company Monarch Casino & Resort, sounded a cautious note as the RSCVA was launching its latest marketing campaign. The organization has seen its share of controversial campaigns over the years, including the infamous "A Little West of Center" slogan that was criticized by then-Reno Mayor Bob Cashell.
“We have changed our marketing message how many times in the last 10 years?” an annoyed Farahi said at the RSCVA's March 2017 meeting. “We’ve had one campaign after another.”
These days, however, are decidedly more upbeat for the convention and visitors bureau.
In addition to steady improvement in visitor counts over the last few years, the organization — which was headed by an interim director after Baum’s termination — received a measure of stability with the selection of a new CEO, former Safari Club chief Phil DeLone, in late 2016.
The RSCVA also recently decided to address concerns about its venues underperforming and not attracting enough events by hiring professional third-party management firm SMG Worldwide Entertainment to oversee facilities such as the Reno-Sparks Convention Center and National Bowling Stadium. In addition to managing various convention centers, SMG also oversees the Mercedes-Benz Superdome in New Orleans and NRG Stadium in Houston.
Never one to mince words when offering pointed criticism of the RSCVA, former board member Farahi sounded a different tune when his term ended in December.
Farahi lauded the adoption of a long-term strategic plan as well as the adoption of stronger metrics to study visitation trends and potential feeder markets, which he has strongly pushed for since re-joining the board.
“I have served on this board a couple of times before and this by far is the most productive board that I have served on,” Farahi said.
After gaining a reputation for dysfunction and poor relationships with community partners in previous years, the RSCVA also jumped on board an effort initiated during the recession by Gov. Brian Sandoval for various state and local agencies to work together in bringing business and events to Nevada.
One agency that noted the change within the RSCVA is the Reno-Tahoe Airport Authority, which has since worked more closely with the convention authority on advertising programs as well as attracting new flights to Reno-Tahoe International Airport.
“Sometimes, good things happen in bad times,” said Brian Kulpin, vice president of marketing and public affairs for the airport authority. “The community found a way to pull together and bring people into the community.”
Two especially big coups for the RSCVA involved securing the return of the Safari Club International convention — the biggest trade show ever held in Reno — after it left the Biggest Little City for an extended stint in Las Vegas.
The RSCVA also managed to take the Interbike convention away from its traditional home of Las Vegas and bring it to Reno-Tahoe. The bicycle trade show has seen attendance drop in recent years after hitting 25,000 participants in 2015 but is projected to either rival or surpass Safari Club numbers for its upcoming show.
Northern Nevada’s transformation in the last few years was credited by RSCVA Vice President of Sales Mike Larragueta for the organization’s success in attracting more conventions. Interest in Reno, for example, was a lot stronger during the U.S. Travel Association’s annual convention last year in Denver, which was attended by 1,000 travel organizations and about 1,300 domestic and international buyers. Interest was not limited to those in the United States but other places such as China.
“We struggled to get accounts to meet with us in the past but we ended with 84 appointments over three days, which is unheard of for us,” Larragueta said. “The point is, it’s not us, it’s the destination. For the first time ever, we’ve become relevant.”
Change in plans
One person who welcomed the news about the increased visitation numbers for the greater Reno-Sparks area was Gov. Brian Sandoval.
Just seven years ago, Reno was being pegged as the Detroit of the West, Sandoval said. Although Sandoval was happy about the region surpassing 5 million visitors for the first time in a decade, however, steering the state through a recession has also made him cautious.
“We’re in the midst of a renaissance right now, but what’s important is that it’s sustainable,” Sandoval said.
Although a market correction is always a possibility, the economic indicators for Northern Nevada for the next three to five years are positive overall, DeLone said.
DeLone credits the arrival of various companies as well as the increased diversification of the local economy for making the area better prepared for another downturn. The agency is also courting international travelers to help offset any dip in domestic travel.
The RSCVA, for example, is working with various partners overseas to attract Chinese travelers as part of a new program to make the area more China-friendly. Efforts include increased marketing of the area and having local businesses adopt popular forms of payment used by Chinese tourists such as Alipay.
Higher visitation numbers have certainly been good for the RSCVA’s bottom line.
With taxable room revenue jumping from $231.5 million during the 2012 fiscal year to $347.4 million during the 2017 fiscal year, the organization has seen a corresponding rise to its marketing budget.
In the 2012 fiscal year, for example, the organization’s total sales and marketing budget was $1.6 million, limiting the number of markets that RSCVA could advertise and run marketing campaigns in. For the upcoming fiscal year, its board approved a sales and marketing budget totaling nearly $10.7 million, which includes surplus money rolled over from the previous year.
It’s still small compared to the Las Vegas Convention and Visitors Authority, which sets aside $95 million of its $140 million sales and marketing budget for advertising alone.
For a market the size of Reno, however, it’s a sizable investment.
A time lapse view during day 1 of the Great Reno Balloon Race in Rancho San Rafael Regional Park.
The increased funding allowed the organization to increase marketing in the Bay Area as well as Los Angeles and Seattle. The RSCVA also increased its regional sales representatives to nine and regional offices to eight, including Sacramento, Las Vegas, Atlanta and Chicago.
“Our increased marketing and sales budget has increased average daily rates at our resorts and overall positive awareness and visitation to the community,” said RSCVA CEO DeLone.
Some members of the RSCVA board, however, believe that it could do better.
Nat Carasali, a founding partner of the Peppermill Resort Spa Casino, questioned why the RSCVA’s room night targets looked flat given the momentum seen in the area, especially with the arrival of Safari Club and Interbike. Room nights grew from 236,283 in the 2017 fiscal year to an estimated 309,425 for the 2018 fiscal year. Room night goals for the 2019 fiscal year were lowered to 280,000.
Carasali balked when told that certain goals were lower from other markets due to new staff.
“We should expect more of the people you hire,” Carasali told RSCVA staff during the May meeting. “We’re spending a lot of money.”
Larraguetta, meanwhile, noted that the numbers being presented involve booked room nights, which look several years in advance and already include projected numbers from the Safari Club and Interbike shows. Getting new shows each year at the scale of those two events — the biggest seen in the area — is going to be easier said than done, he added.
Air travel was another factor mentioned in relation to the target numbers. Although Reno-Tahoe International Airport has seen a lot of improvement since the recession, including its first passenger increase in a decade in 2016 as well as recently hitting the 4.1 million passenger mark, flight availability continue to be an issue when attracting larger conventions to the area.
“We still need to do more in air service,” said RSCVA Board Member Rick Murdock, who also served two terms on the Reno-Tahoe Airport Authority board. “If you don’t have that airport hub, we’re in a little bit of trouble because that’s how conventions and corporate travel get here.”
The airport is projecting passenger counts to grow to 6.5 million by 2036.
DeLone also mentioned that the RSCVA team inherited the goals in question from the strategic long-term plan — a plan that the board agreed to. Board Chairman Lucey, however, says it might be time to look at the plan once more and strike while the iron is hot.
“Now that we’ve seen everything, we need to start re-evaluating,” Lucey said. “The marketing’s working well … and we’re going in the right direction. However, we can do more.”