Visitreno

[stan_allen]

I'll give Ellen credit for candor, but my inner lawyer says, "Objection!"

Citing Vegas's strategies repeatedly may feel like a good basis for policy, but the two places remain vastly different.

The argument seems to be that having cheaper facilities makes the whole area feel "Cheap", and that charging more will bestow upon Reno increased authenticity.

Following this train of thought, then, charging more money means that more money will be brought in, which is a lovely thought, but doesn't hold up to the scrutiny of logic. Free markets, as we learned from the late great Milton Friedman, thrive in an environment where vendors are free to charge what they want, and buyers are free to choose what offer they want - or to choose nothing, if the offers are not to their liking. Bureaucracies with meddlesome inclinations such as the Dept. of Agriculture (See "The land was everything: Letters from an American Farmer" by Victor Davis Hanson for bludgeoning commentary on this matter) and, apparently, the RSCVA convince themselves that their visions are indistinguishable from reality.

"If Reno-Tahoe is to continue to appeal to travelers, reinvestment is essential." Bland statements such as this which are then converted into justification for charging more present themselves as logical while achieving nothing of the sort. Yes, reinvestment is essential; we all know that, but a much more compelling question is why the revenue streams of the '90's dried up - rather than charging more for the same old thing, which is clearly not improving the situation, why not take a broader view, and address the problems, rather than thinking up grandiose statements to arbitrarily raise rates?

The trouble with this kind of thinking is that we've seen it so many times before, and it holds no long-term solutions - once the rates have been raised, and the vacancy rate shoots up even more, Ellen, the hotel managers, and other suits will be long gone, on to their next "Management" positions, offering banal statements about their "accomplishments" "streamlining operations", "improving efficiency", and raising patron perceptions of various and random minuscule details, while the elephant on the casino room floor stumbles and crashes into various plate-glass walls (apologies to the actual elephant cited elsewhere recently).

"Increased ADR is a viable option for hotel operators to generate revenue to reinvest, ensuring that visitors will enjoy our offerings into the future."

Here we have reality smashing into a brick wall - this hifalutin pronouncement is a classic example of the emperor having no clothes; I could just as easily suggest to my boss that giving a raise to everyone in the company is a "viable option" for employees to have more money to save or reinvest, ensuring that the company will have better offerings in the future - what do you think my boss would say to that?

If you want to split hairs and say that my analogy isn't comparable, go right ahead, but you'll still have to explain exactly how raising rates is going to translate into actual reinvestment, rather than simply better lining the pockets of owners. If you want to charge more, you'd better offer compelling reasons why the increase will result in improved services.

And if you don't like my analogy, you'd better have good reasons why this one comparing Reno and other travel destinations to a tire store is apt; frankly, I can't see how the process of purchasing tires compares to the process of having a vacation at all, so this is a false argument, and I'd frankly be a bit offended if I were a hotel/casino operator OR the proprietor of a tire store!

" I believe that we need to place less emphasis on the lowest tier of budget travelers and place more emphasis on visitors with higher discretionary spending."

Backwards logic, again; Reno is not Vegas, and you're not going to attract the whales by aspiring to a pretense of artifical opulence where it doesn't exist. Reno's appeal is that of an affordable alternative to Vegas; the business model supports offering good value and quality at substantially less cost than its glitzy brethren to the South - trying to crowd out the budget travelers smacks of an elitism that is inappropriate to the Reno area, and as a cheapskate myself, I resent the implication that I'm somehow bringing the area down - like a fast-food restaurant whose profit margin depends on a quick and steady turnaround rather than gigantic and pricey menus where patrons dine leisurely for an hour or more, Reno appeals to budget travelers precisely because they can enjoy an evening's gambling entertainment on a reasonable and realistic budget. Have you been to Vegas lately? It's super-pricey, and a weekend's gambling is unrealistic for many - for Reno to want to become more like this is the height of bad planning - rather than appealing to the budget level as before, Reno will price itself out of this market, but will not tap the Vegas keg, and in the process, will lose everyone - what motivation will there be to come to the area at all?

"Hampering Reinvestment"? "Creating a false perception amongst travelers"? You've got to be kidding me. What exactly is the "False Perception"? This is just raising prices for the sake of raising prices, plain and simple.

Pardon the political aside, but it's similar to the never-ending call for higher taxes, which are based on an invented need. We never hear an explanantion of how the problems that led to the need for higher taxes will be fixed by higher taxes.

But back to Reno: low rates have "Deterred national business-brand hotels from entering the marketplace because it is difficult to make an acceptable return on investment on average rates of $66.83" - again with the backwards logic - the reason that the 'deterrence' of which the author speaks has taken place has more to do with the area's failure to respond to an unacceptable drop in quality. Rather than recommending that everyone raise prices, the RSCVA ought to focus on quality issues - why not work on the increasingly-seedy feel of the downtown? The train tunnel was a step in the right direction, but it's far from the only thing. What about the proliferation of Indian casinos in California siphoning off the customer base? Their payouts and such are far less transparent than that of the Nevada establishments, yet for all the talk of the "Powerful Las-Vegas based interests" working tirelessly to get Californians to defeat the measures authorizing constructions of these establishments at the ballot box, we hear naught but a whimper in the face of such challenges.

"Lastly, because the RSCVA is funded by a portion of the hotel room sales tax, an increase in ADR, while maintaining or growing occupancy, would also provide the organization with more resources to market the destination regionally, nationally and internationally" - a catch-22: "We need to charge you more so we can advertise more", which ignores the question of, what good is more advertising going to do if nothing is changed except that room rates are now higher?.

All nice arguments, eloquently presented, that boil down to nothing more than "We need to raise rates so we can make more money." - I see little in this letter to persuade me otherwise, puffery notwithstanding.

Sorry for the rant, but these vapid conjectures angry up the blood!

-Stan

[RenoLady]

Nice analysis. You should send it back to Ellen.

[stan_allen]

Thank you, and I probably should, but I'm certain they already know that their arguments are empty spin.
Folks like our fearless webmaster, John, have been knocking themselves out trying to raise awareness of the obvious to the people who run the casinos, and his cries - and ours - have fallen on deaf ears, over and over.

I once thought a job as a spokesperson would be a cool gig; now I see that it's just a depressing post as a shill for disseminating disinformation.

Reno, we still love you, but your management has fallen, and it can't get up.

I promise to stop now, at least for a while.

-Stan

[BC Dave]

Good analysis Stan.

I thought I'd add a few more ideas sorta on the subject.

What would the owners and managers of the closed hotels such as the Sundowner, Comstock, Flamingo, have said to her business advice as they watched their customer base dwindle due to the opening of casinos all across the country?

Perhaps we could convince Ellen that she should move on to bigger and better things like the Las Vegas Visitor's Authority (if they have one). After she convinced them to raise their rates even further, we might see a flood of cheapskates and bargain hunters take refuge in Reno. Perhaps enough of them to make the whole tourism industry in Reno a little more financiallly viable.

People who are loyal to Reno know that it does some things very well. It does have some great hotel casinos. They offer more for the money than most Las Vegas casino hotels do. You get nice rooms, good odds on all games, really good food and free drinks. Try to get one of those at an out of state casino!

If you like to gamble (a little or a lot) who needs anything nicer than the Peppermill, Eldorado, Atlantis etc. These are well run, attractive and affordable. They even reinvest!!

BC Dave

[stan_allen]

Dave, I second that motion - perhaps we could export the entire RSCVA to Vegas!

[remano]

[stan_allen]

See, the dirty laundry comes out - throw that kind of money around, then recommend that everyone else raise prices for a bunch of artificial reasons.

Sorry, but it's sickening.

[llkraus]

Just a thought: Room rates might go up on their own if the new Station Casino is nice. Stations aren't the Bellagio; however, some of them are nice. (I've read that they want it to be on the same level as Green Valley Ranch in Las Vegas. If that happens, it will easily be one of the top two places, if not the best, in Reno.) They might up the ante enough that some of the other places will need to remodel and refurbish, which would probably result in a price increase, to some degree. However, as some of the older places improve to keep being competitive, a price increase might not be as troublesome as it is now.

llk
_________________
Larry L. Kraus
Tyler, TX

[Bama]

Excellent work Dave!

What a putz. My friends and i have not booked our annual March Madness trip because we were already finding deals as cheap as Reno's in Las Vegas and although i prefer Reno - for the same price or close to it - they do not! In my oppinion Reno has always been about the deals and the intimacy. Yes we might be able to get a good deal to Vegas but the sportsbooks for March Madness are so crowded you must arrive at 7:00 am just to get a seat and there are not drink coupons or food specials.
Dave,

Yes i know i still owe a trip report from last March- here it comes.

Ben

Roll Tide.