Rallying for Reno
Rallying for Reno
Despite struggles, casino operators in "The Biggest Little City in the World" are bullish about their future
By Andy Holtmann
Reports of the Reno gaming industry's imminent demise have been greatly exaggerated.
Yes, there has been an impact from the burgeoning Native American casinos in Northern California. Yes, the weather can sometimes wreak havoc on regional travel to the city. Yes, the redevelopment of downtown Reno and other projects citywide haven't come as fast as some would like.
But the "Biggest Little City" that the gaming industry once forgot is showing signs of life, and operators there are excited and bullish about prospects for the future.
While revenues and EBITDA of Reno casinos have dropped off in the last few years-$740 million in revenue in 2003 compared with $860 million in 2000-and $107 million in value has been knocked off the values of downtown Reno casinos by the Washoe County Assessor's Office in 2004 alone, there has been some good news.
In November, Reno casinos reported a nearly 3.8 percent jump in gaming win to $57.6 million compared to the same month in 2003, and for the first four months of their fiscal year (July 2004 to November 2004), Reno casinos have eked out a slight 0.71 percent gain to $324.5 million.
The city-and its casino properties-are also changing gears in marketing efforts, touting the Reno area's vast recreational opportunities as the first draw. That's a stark contrast to Reno's heydays in the 1970s where the main reason for a trip there was to gamble.
Talk of unified efforts between casino operators, city officials and local businesses to market and create ideas for the city have developed past the rhetoric stage. Many of the city's casinos have also begun to heavily reinvest in their own properties to add value to their customers, while attracting new visitors from more distant locales.
So just how will all of these efforts fare? Casino Journal recently surveyed some of Reno's top casino operators and executives to get their take on just where their gaming industry stands and where they want it to go.
Please give your opinion on how the Reno market is faring right now overall and its prospects for the years ahead.
Stephen Ascuaga, senior vice president of marketing, John Ascuaga's Nugget: Overall the economy of the Reno/Sparks area is healthy. Many observers are shocked at how well our area has fared even with increased competition from the proliferation of gaming around the country. Our industry is stable because we are working hard to adjust to a changing business climate and diversify our marketing and product offerings. For example, we have focused more on convention business and on marketing our vast outdoor and non-gaming activities.
Gary Carano, general manager, Silver Legacy Hotel & Casino: The Reno gaming market is holding its head up right now. According to the Nevada Gaming Control Board, gaming win is up 0.71 percent for the current fiscal year over last year. Fiscal year 2003 showed a slight decline (2.1 percent) from 2002. This is a much better economic picture than early predictors forecasted. Reno's future is exciting and bright, with the area's leisure and business opportunities and continued development in the downtown area, we are well equipped to meet all challenges.
John Farahi, president and CEO, Atlantis Casino Resort: We are very confident that there is a bright future for the Reno market. Reno is, and remains a highly competitive market. Our numbers continue to grow, and while others may be struggling, we feel strongly that those properties that have strong management, the right product and location will continue to gain market share.
Bill Hughes, director of casino marketing operations, Peppermill Hotel & Casino: Reno got through 2004 well. Thunder Valley and the other Indian casinos didn't affect us as much as people expected, and our market really bounced back in the second half of the year. We are very optimistic about Reno. Our air service is very strong and continues to improve. Marketing the region as a getaway destination will help the market stay strong in the years ahead.
Don Marrandino, senior vice president and general manager, Harrah's Entertainment's Northern Nevada properties: Reno is poised for a pretty decent renaissance. The group of hotel-casinos downtown especially are really working together to bring big time, Las Vegas-style entertainment to the casino core. The mayor (Bob Cashell) has also been unbelievably helpful in that he's taken a pro-business approach to clean up downtown Reno. Harrah's put together free outdoor concerts all summer long to drive people to the downtown core. There have been a lot of positive things going on in Reno. Air traffic is up about 12 percent for the year, which is a very positive thing and people are reinvesting in slot capital, redoing hotel rooms and making their properties first class facilities.
Ferenc Szony, CEO, Sands Regency and Rail City and Gold Ranch hotel-casinos: Reno/Sparks is still a billion-dollar gaming market, and is performing better than many analysts felt it would this year. Both the Sands and Rail City have shown the strength of the local market. Even though the tourist segment has been soft, you will see it improve in the next few years thanks to the redevelopment of the downtown area, the expansion of our convention base and property reinvestment that improves the product.
Amin Visram, CEO, Vista Hospitality Group (Golden Phoenix Hotel & Casino): The Reno market is certainly on the right track and increasingly better every year. The overall population base has significantly increased since 2001 and the future trend seems to suggest that there will be more of an influx into Northern Nevada within the next five to 10 years as evidenced by many expert opinions. Clearly the real estate market is almost in the top five within the United States over the past 12 months.
What, in your opinion, is the biggest issue facing Reno and its gaming industry?
ASCUAGA: The gaming industry in the Reno/Sparks area has several major issues that it needs to tackle in the coming years. First, a third wave of Indian gaming in California is just over the horizon, creating larger Indian casinos, with better amenities. Second, our region needs to address [locals] casinos, their impacts to our neighborhoods, the potential fragmentation of our industry and impacts on downtown Reno and Sparks.
CARANO: The continued expansion of Native American gaming into major metropolitan areas in our primary feeder markets. The image and development of downtown Reno is a close second.
FARAHI: As far as the Reno economy is concerned today, it is by far more diverse than Las Vegas with an unemployment rate of 3.2 percent-one of the lowest in the country. Those properties like ours that rely on locals for a great portion of their business will grow strong. One other factor that is fueling Reno's economy is the rapid growth of our population, which exceeded 4 percent in 2004.
As for the gaming industry in Reno we definitely have been challenged by Native American casino growth particularly in Northern California. But the Reno/Tahoe area has much more to offer to the traveling tourist besides gaming. We feel that our year-round recreational opportunities will be a big draw to continuous growth in our tourism sector. Also the population in Northern California is growing and that will definitely help add to the tourism base for Northern Nevada.
HUGHES: We need to continue to improve the city as a destination getaway and create a superior entertainment environment.
MARRANDINO: Northern California's proliferation of gaming is the biggest. To respond to that, you have to make Reno more of a national destination. The goal is to get "The Biggest Little City in the World" back on the radar as a viable alternative to Las Vegas-style gaming.
SZONY: Investing and keeping the Reno product contemporary and diversified enough to broaden our appeal. Simply being a casino of convenience to Northern California cannot be the strategy for the future. By redefining Reno with a more diversified range of attractions, entertainment and recreational opportunities, we can broaden our appeal and our audience.
VISRAM: One of the biggest issues facing Reno is air traffic. The objective should be to increase the air traffic into the Reno/Sparks area. It is certainly on an upswing relative to what it was a few years ago and needs to be increased even further. However, the bigger issue for the Reno's gaming industry has been its inability to attract many major conventions. With the new event center in downtown Reno, combined with the convention center, it is certainly a better road than three years ago.
In addition, the gaming industry is establishing itself as an entertainment destination with the appropriate food and beverage outlets but needs more retail and choice or boutique entertainment. While many people may argue that California gaming is the biggest issue facing Reno, for us, it is to the contrary because it nurtures new gamers who will now seek a destination/entertainment type of a venue which in close proximity and that happens to be Reno. Therefore when the California gamer visits Reno as a destination, Reno needs to be ready to exceed that individual's expectations with the amenities one expects as a destination.
What would you say is more important: redeveloping downtown Reno or better marketing the entire city?
ASCUAGA: In order to deliver on your marketing messages you have to have a thriving downtown in both Sparks and Reno so tourists have a good experience. Redevelopment efforts are vital to improving this experience.
CARANO: For the City of Reno they go hand in hand. Taking care of the heart of our city by redeveloping downtown Reno with projects like the lowering of the railroad tracks, the new Reno Events Center, the kayak park, the development of downtown high-rise condominium projects, increased riverside shopping and the beautification of Virginia Street are crucial. With the continued support and leadership of Mayor Cashell, our City Council and other downtown leaders, these projects will continue to change the face and image of Reno as a whole.
FARAHI: Not one or the other. Reno has a lot to offer and we have to be focused on our message and communicate all we have to offer to our visitors.
HUGHES: Re-marketing the city and the region, and downtown Reno is a part of that. The region is trying to bring in more special events, entertainment and to diversify the types of conventions that come here. We're marketing the region as "America's Adventure Place," where we have a wide variety of outdoor and indoor activities. We're a regional destination, not just a city destination.
MARRANDINO: It's a chicken and egg scenario. The downtown area needed to be cleaned up with better amenities and entertainment. The market is really Reno and Tahoe, but everyone here (in Reno) has done a good job to make this more of a first-class destination.
SZONY: Product first! To broaden our appeal, the best opportunity we have is the redevelopment of downtown Reno and the river area. That is underway with many new developers looking at downtown Reno as an opportunity. Good marketing is always important, however, you have to start with a great steak before you can sell the sizzle.
VISRAM: There is no doubt that downtown Reno is the core of gaming save for the Peppermill, Atlantis and Nugget, which heavily market the locals in addition to out of state visitors. Consequently, marketing both downtown as well as the entire city would create a critical awareness to the consumer that Reno and its surrounding region has a lot to offer. Thus having visitors come in to Reno/Sparks/Lake Tahoe region not only for gaming but for golfing camping and skiing as well as other outdoor events would be a critical component of the development phase.
What would be the best piece of advice you would give to someone interested in operating a gaming venture in Reno?
ASCUAGA: As in Las Vegas, high quality resort/hotel destinations with must-see attractions will bring tourists to our area. That level of investment in our downtown is needed.
CARANO: First you have to think out of the box. To attract today's gambler, leisure traveler and business groups, you have to offer more than just a great gaming experience. You need to have a variety of offerings including exceptional dining, top-notch entertainment, unique retail outlets, great customer service as well as take advantage of our great outdoor activities. If you take a look at the successful cutting edge properties in our sister city, Las Vegas, they have all of this and more.
FARAHI: Have the right product, which realistically means more upscale than what the market currently offers. Location, location, location-and a management team that can deliver results.
HUGHES: Know your customers and provide a great product at a good value. Reno provides a better value with more liberal slots and table game rules, plus the facilities in Reno keep improving. There is a lot of value in Reno because of the great facilities and the way restaurants, entertainment and hotels are reasonably priced.
MARRANDINO: You have a chance of coming into a place where there is a very pro-business landscape. The market knows it needs to reinvent itself to some degree. It has a service culture with very low turnover in most areas. There are a lot of people and businesses from Northern California moving into the Reno area. We have a great climate, a great, accessible airport. The city needs to be marketed. The RSCVA and the airport authority are doing great things to really freshen up the image.
SZONY: This is not an easy market to be successful in, and is extremely competitive. You must define your position and truly know what your patrons want. Pack a lunch, because it is going to be a long day!
VISRAM: Make sure that you understand your market niche and also the ability to draw from the market that has been identified. Also make sure you understand your venue and the competitive sector.
What are some things you've done to improve your own operations to better suit the Reno market?
ASCUAGA: At John Ascuaga's Nugget we have always believed in reinvesting in our property and offering guests and customers the amenities that they desire. Since 1960 we have recognized the importance of convention business to our industry and over the years we have grown into one of Northern Nevada's premiere convention hotels with over 110,000 square feet of meeting place. In many ways we are a hybrid property with a combination of thriving business traveler and vacationers customer base. We offer both a range of services including high-speed wireless Internet access, a gym, spa and salon and an indoor/outdoor swimming pool and are continually looking at ways to improve our attractions for these segments.
CARANO: We've established joint marketing efforts with our partners at the Eldorado, Circus Circus and Harrah's to position Reno as a hot spot for concerts and special events. We're motivated to change with the times and do so by re-investing millions of dollars back into our property every year to ensure we stay fresh, exciting and progressive.
FARAHI: We continuously reinvest in our product including food and beverage, hotel and gaming. We just finished remodeling our 18-story tower after completing the remodel of our 12-story hotel tower last year. This was an extensive floor to ceiling remodel including marble floors and crown molding. We have the latest, hottest games on our casino floor and utilize the Acres/IGT slot system with NexGen, which I believe is the best in the market. Within the next few months we will be 100 percent ticket-in/ticket-out, which reduces labor and improves both revenue and guest service.
HUGHES: We try to have a strong appeal to locals as a great place to dine and play and a strong appeal to our out-of-town guests as a getaway. We've continued to add restaurants; we've remodeled our slot floor, added new games and became the first major hotel-casino in Reno to offer 100 percent ticket play; and we offer strong promotions, like PepperMillions, for our local customers. Plus we've expanded our apparel shop to improve the retail experience.
MARRANDINO: The interesting thing from an entertainment perspective in Reno is the development of NEWCO-a collaboration of Circus Circus, El Dorado, Silver Legacy and Harrah's. Those properties really work as a group and it's an interesting case study. All these properties check their ego at the door and take collective risks with entertainment options to bring top name entertainment to Reno.
SZONY: As a company, we heavily reinvest into each of our operations and focus on knowing what our patrons want as opposed to copying our competitors. At our downtown property, the Sands Regency, we have recently completed a total renovation of all guestrooms, and have just launched on a casino remodel that will give the property a fresh, contemporary "beach" theme. This spring, we will break ground on an expansion to Rail City that will add 50 percent additional casino space, a new restaurant with outdoor dining, and a new center bar that promises to be "the" gathering place for locals. At Gold Ranch, we have just completed a renovation of our gas facility and now boast the fastest pumps in the west in one of Arco's highest volume gas facilities. We are currently installing the Acres slot tracking system at Gold Ranch so our patrons can benefit from the best slot-marketing program in the industry.
VISRAM: We have done quite a number of things to maximize on our operations. This is evident from our repositioning of the Golden Phoenix Hotel & Casino into a destination of entertainment where we have clearly created venues within our casino to be very inviting. Our position is simple: We have to look at our casino-hotel as an entertainment destination from the inside out. In other words, what are the attractions that we have and how can these attractions help us nurture our existing strategy?
As an example we have created Reno's hottest club, "The Top." This is located on the 21st floor of the Golden Phoenix. We also have the fine dining Italian concept called "VINO'S" which has nightly dancing starting Thursday. In our showroom we have now featured "The Perfect 10." We are currently holding auditions in various parts of the United States to audition ten of the best looking girls in the county. Our Cabaret Lounge features a variety of entertainment on a nightly basis. Hypnolarious Has Gone Wild is a comedy show that we have maintained.
Food outlets include The Top Steakhouse, Benihana, Dueces Diner and Aces restaurant. In addition we have created a food court with outlets such as Pizza Hut, Subway, Dryers ice cream and LaMichoacana, a Mexican-style fast food outlet. These are all creations to attract our market as well as to draw from our surrounding areas and allow for brand recognition to the local as well as out-of- town consumers.
Would you say casinos are working together to market Reno, or is it still each operator on his or her own?
ASCUAGA: The greatest example of the Reno/Sparks market working together is the work done by the Regional Marketing Committee (RMC). This group is made up of not only gaming entities but also ski resorts and area tourism groups. Their goal is to increase the airline service to our region and they have had good success.
CARANO: Times have truly changed and Reno has never worked together as well as it is right now. Cooperation is key and the hotel/casinos, RSCVA and the city have all committed to positioning Reno-Tahoe as a premier leisure, business and gaming destination.
FARAHI: I believe we have come a long way as casino operators working together to promote this fabulous destination. Reno has continued to gain additional air service while most other cities continue to suffer since 9/11. As of January 2005 we have 90 flights a day into Reno/Tahoe International thanks to Krys Bart, our airport authority's executive director, and her team.
Also the Reno/Sparks Convention and Visitor's Authority has developed a plan and put together a team under the leadership of CEO, Jeff Beckelman. The plan coordinates and enhances our region's marketing efforts in bringing more tourists and conventioneers to our destination in addition to filling the 605,000-square- foot convention center which was recently expanded at a cost of $105 million.
HUGHES: Casinos can still be a little reticent about working closely with each other. As the Reno market grows, we'll all benefit from a closer association. The RSCVA is bringing the properties closer together and we'd like to continue to contribute and work with the RSCVA.
MARRANDINO: There is a sense of a collective group that has a common interest-promoting the destination. It's similar in Tahoe. Those two markets have been somewhat in decline and fallen off the radar. I think now you're seeing a collective effort to determine how to get (customers) back. We can't steal enough of each other's customers to be successful. We have to grow the pot.
SZONY: I give great credit to Circus Circus, Harrah's and the Eldorado for pulling together on improving the downtown product. The leadership, particularly from Phil Satre, is making a substantial impact on the revitalization of downtown Reno and the Reno area that will move the market toward a brighter future.
VISRAM: Certainly the RSCVA as well as other agencies are involved to market Reno together. The objective should be that all operators work together on a united front basis. The Reno hotel-casino operators have made some headway in this area but there is certainly room for improvement.
What is Reno's biggest untapped potential?
ASCUAGA: There are few places in the world where you can ski in the morning and play golf in the afternoon. Here you can. While nationally, people are finding out about our amazing outdoor activities, internationally we also have a lot of potential. Reno/Sparks is not just a quick one-night getaway, we are a vacation destination where one could spend three to five days and never run out of activities to experience. In Northern Nevada we need to figure out how to increase our non-gaming revenue with everything from room rates, conventions to restaurants.
CARANO: We have the best of both worlds-great indoor, as well as outdoor, entertainment. Reno-Tahoe's natural beauty and abundance of leisure time activates, including world-class skiing, golf and water sports-all located in close proximity to first-class hotel casinos with outstanding gaming choices and night-life-is something no one else can offer.
FARAHI: We have to do whatever it takes to change the perception of many that Reno/Tahoe does not have much to offer, especially to those living further east. This perception could not be farther from the truth. Reno/Tahoe is one of the most exciting of fun-filled destinations in our country. For year-round recreation, Reno/Tahoe has more to offer than any other destination that I can think of. You name it we have it: Over 45 golf courses within one-and-a-half hours of the airport; Some of the finest ski resorts in both number and quality, again within a relatively short distance from the airport; Fishing, hiking, boating, hunting, hang gliding, biking, white water rafting and kayaking...all here. On a spring day you could go skiing in the morning, golfing in the afternoon and take in a show or gamble in the evening-all in one 24- hour time period. Reno/Tahoe is America's Adventure Place.
HUGHES: We still have an opportunity to market more collectively and get the word out about how attractive a place the Reno/Tahoe area is to live and visit. There are still markets, like Southern California and Arizona, where we could be marketing more effectively. We need to continue to spread the word about the Reno/Tahoe region. We've got 300 days of sunshine a year, 40 golf courses and 18 ski resorts less than an hour away, plus a river park and kayak course, art museums, and events like the Reno/Tahoe Open, National Air Races, the Reno Rodeo and Hot August Nights.
MARRANDINO: It's getting the word out there that Reno is not just a tired little town. It's where gaming kind of grew up. It's cool, nostalgic. The city is also starting to become artsy as well. There's also the proximity to hundreds of outdoor activities. It has first-rate convention facilities and the world's best bowling center.
SZONY: Downtown Reno has huge future potential that can lead the way in repositioning our tourist appeal. Additionally, the outstanding recreational opportunities in and around our community are starting to show their potential, which in the past were mostly kept secret for the enjoyment of locals only.
VISRAM: Charter flights into Reno from destinations no more than an hour-and-a-half to two hours flying time. The amount of charter flights in Vegas versus the amount to Reno compares to a fly on a horse. Reno certainly has the potential to increase these private charters and offer better deals due to the fact that room rates are lower in Reno relative to Vegas. In addition, Reno and its surrounding area does have the ability to accommodate 18,000 to 20,000 people. Unfortunately, the inability of a convention center to accommodate that type of volume is its major untapped potential. Also the Reno Market is a four-season market and the casino operators must capitalize on all those seasons and market venues accordingly.
Name one thing you could change about Reno if you could.
ASCUAGA: I would continue to improve the image of Reno as a great destination and increase our area's non-gaming revenue.
CARANO: Its image. The RSCVA's "America's Adventure Place" campaign is right on target. Positioning Reno no longer as an old west town, but as a world-class outdoor recreation and gaming plus destination. Reno's happening!
FARAHI: Honestly I cannot think of one thing. I know it is hard to believe that. Maybe that is why so many people are moving to our area.
HUGHES: The image of the city. Certainly we're doing things to improve it: the train trench project, the river park and the new Reno Events Center.
MARRANDINO: Reno's behind the times a little bit on the culinary side. I think we need to bring some of the top-name chefs and great restaurants to Reno. That's starting to happen.
SZONY: Reno's major convention center should have been built downtown overlooking the Truckee River with hotel rooms, entertainment and casinos surrounding it. Having the convention space at the south end of town and the bulk of the rooms in downtown has always been perplexing to me.
VISRAM: Entice more gaming and more entertainment venues to include a vast variety of retail, shopping and food. Additionally, [we need] to create an attraction for families and appropriate facilities for the same.
Do Indian casinos in California spell imminent doom, or are they creating opportunities?
ASCUAGA: Indian casinos do not spell imminent doom for Northern Nevada. Our industry is evolving and competition makes a business realize and assess its assets. The opportunity that Indian gaming creates is to help remove the stigma of gaming and is introducing gaming to a larger audience.
CARANO: Native American casinos remain a formidable opponent, but by introducing new players to gaming as a leisure time activity, it creates opportunities in the long term. It is our responsibility to educate these new players of the advantages of the "gaming plus product" offered in our market, versus the "stand alone" Native American casinos where gamers can't even "walk across the street" to change their luck.
FARAHI: Without question Native American Indian casinos in California are introducing many people to gaming entertainment for the first time. Those people will seek more variety and larger entertainment selections in our market. And we can give them that, plus unsurpassed natural beauty and outdoor recreation. We are a gaming-plus market.
HUGHES: They are certainly not creating imminent doom. Reno casinos offer a lot that the Indian casinos don't. Plus, as more people are exposed to gaming they are more likely to see it as a recreational activity.
MARRANDINO: I think, anywhere people find gaming to be a great recreational alternative, it is a good thing. It creates customers.
SZONY: Like any new competitor, they've had a huge impact on the Reno gaming market, but they do not spell the demise of Reno's gaming or tourism industry. Successful operators in the Reno area must be smarter, well financed, aggressive and work together to be successful. At our company, we remain optimistic, and in the first year of Thunder Valley's operation outside of Sacramento, our hotel occupancy at the 832-room Sands Regency downtown, was 86.7 percent! Additionally, if you look at the results of both us and Monarch (which operates the Atlantis), the investment community has adjusted its outlook on the Reno market based on our results.
VISRAM: I personally am a firm believer that the Indian casinos in California will be a means, in an indirect sort of a way, to market Reno. My opinion is that the California casinos act as ambassadors for markets like Reno. Gamers, especially those that have never been inside a gaming establishment, would only like to explore a gaming destination once they have a feel of what gaming is. It is these casinos that are giving them that feel.
Many people that I know personally seek entertainment destinations such as Reno, Las Vegas, Atlantic City and others once they have had a little feel of what gaming is. Once they have tasted the new destination casinos and realize that they have a better chance of winning compared to the odds at non-destination casinos, they become repeat customers. These people, therefore, would never have been customers of the destination market but for the influence of the Indian casinos.
Has the typical Reno gaming customer changed at all in the past few years? And if so, how?
ASCUAGA: We are finding that our customer base is becoming slightly younger and are interested in participating in more activities than just gaming. They are becoming increasingly active in outdoor activities.
CARANO: Yes, the new Reno customer is younger and looking for expanded and more unique entertainment offerings including nightlife, dining, shopping and more. On the gaming side they're looking for the newest and most exciting slots and table games. Today's customer is also more active and is seeking outdoor recreation choices as well the traditional offerings.
FARAHI: Air travel has been growing and we are seeing more conventioneers and outdoor recreational enthusiasts because of all we have to offer. That includes many the fine golf courses and enhanced and growing ski resorts like Mt. Rose.
HUGHES: The customers have not changed much in the past few years, but they are wiser. Customers will get player's cards and have their play tracked, and they understand the benefits of belonging to a player's club. People are more open to gambling as a recreational pastime, as something they do for fun.
MARRANDINO: It's become more of a national customer. It used to be the Sacramento/San Francisco drive-up customer, but now there's (all of) those (Indian) casinos on the way, so if someone wants to game for just an afternoon, they're not driving up here with the frequency they once had. So now, we need to swing a little harder in trying to get more national business. We're even targeting people in Las Vegas now to get them to come up and enjoy Reno.
SZONY: The Reno customer has not changed as much as it will need to. However, we are seeing change at our properties. The major bowling events expose the Reno/Tahoe product to a far broader customer base, and although the average age of the Reno clientele has not dropped, the activity level of these patrons is much different than in the past. I see this each day as I visit our ski and bike rental shop at the Sands Regency, or look at the number of guests that take advantage of our ski and golf packages.
VISRAM: Certainly the empty nesters (50- to 70-year-olds) are more of a market in Reno. The Reno market also needs to attract the single-income or double-income family. The weakness that the Reno market has is that it is not yet a destination for families, which it can draw on and can be with the appropriate infrastructure. In addition, if more food and beverage outlets outside of hotels were created, that would also draw more of the 25- to 45-year-olds. The outdoor campaign is certainly bringing in golfers and skiers.
What would you say is the best lesson learned or most useful information gleaned from your time operating in Reno?
ASCUAGA: Business is not a sprint, it's a marathon and therefore proper long- term planning is essential to running a business. Long-term commitment to the community and to the evolving industry to both tourists and residents alike will increase your chances to succeed.
CARANO: You must re-invest and stay current with your product and have quality and consistency throughout. You also have to give your players a great shot at winning in the casino. Your employees are the key to success; you must have the best employees in the business to reach you goals, which Silver Legacy does.
FARAHI: That our guests are looking for quality and value. The average tourist has become much more demanding and sophisticated. If we meet their expectations we will be rewarded with success.
HUGHES: Continue to stay focused on providing the best service and best product at the best value. Appeal to locals with quality service and great facilities that make them feel comfortable and give our out-of-town guests a quality getaway at a great value. Also, to reinvest in the product and make it as good as it possibly can be.
MARRANDINO: I think the cooperation between the properties and the business community is great. It's a model for a lot of other places around the industry to realize that people can work together, even though they may be competitors.
SZONY: Persistence. Reno is not a market that you can relax in, or that you can coast. You must be innovative, and define your business strategy and stay on it for the long haul. Having a strong business model and sticking to it is the key to success in the Reno market.
VISRAM: The Reno market is full of untapped potential. The community at large is now working together and is making a good effort but can exercise even greater effort. Specifically, the downtown Reno market can become a home for many more events in addition to the current events. With being an outdoors market, it is critical to attract the type of events, functions and conferences catered to that type of a consumer. More entertainment-related events have been received well and capitalizing on the four seasons is a strong ingredient. Marketing and increasing the choices available to the customer would result in more guests and more room nights, which would then result in more casino play and thus overall increased taxation for Reno.
Despite struggles, casino operators in "The Biggest Little City in the World" are bullish about their future
By Andy Holtmann
Reports of the Reno gaming industry's imminent demise have been greatly exaggerated.
Yes, there has been an impact from the burgeoning Native American casinos in Northern California. Yes, the weather can sometimes wreak havoc on regional travel to the city. Yes, the redevelopment of downtown Reno and other projects citywide haven't come as fast as some would like.
But the "Biggest Little City" that the gaming industry once forgot is showing signs of life, and operators there are excited and bullish about prospects for the future.
While revenues and EBITDA of Reno casinos have dropped off in the last few years-$740 million in revenue in 2003 compared with $860 million in 2000-and $107 million in value has been knocked off the values of downtown Reno casinos by the Washoe County Assessor's Office in 2004 alone, there has been some good news.
In November, Reno casinos reported a nearly 3.8 percent jump in gaming win to $57.6 million compared to the same month in 2003, and for the first four months of their fiscal year (July 2004 to November 2004), Reno casinos have eked out a slight 0.71 percent gain to $324.5 million.
The city-and its casino properties-are also changing gears in marketing efforts, touting the Reno area's vast recreational opportunities as the first draw. That's a stark contrast to Reno's heydays in the 1970s where the main reason for a trip there was to gamble.
Talk of unified efforts between casino operators, city officials and local businesses to market and create ideas for the city have developed past the rhetoric stage. Many of the city's casinos have also begun to heavily reinvest in their own properties to add value to their customers, while attracting new visitors from more distant locales.
So just how will all of these efforts fare? Casino Journal recently surveyed some of Reno's top casino operators and executives to get their take on just where their gaming industry stands and where they want it to go.
Please give your opinion on how the Reno market is faring right now overall and its prospects for the years ahead.
Stephen Ascuaga, senior vice president of marketing, John Ascuaga's Nugget: Overall the economy of the Reno/Sparks area is healthy. Many observers are shocked at how well our area has fared even with increased competition from the proliferation of gaming around the country. Our industry is stable because we are working hard to adjust to a changing business climate and diversify our marketing and product offerings. For example, we have focused more on convention business and on marketing our vast outdoor and non-gaming activities.
Gary Carano, general manager, Silver Legacy Hotel & Casino: The Reno gaming market is holding its head up right now. According to the Nevada Gaming Control Board, gaming win is up 0.71 percent for the current fiscal year over last year. Fiscal year 2003 showed a slight decline (2.1 percent) from 2002. This is a much better economic picture than early predictors forecasted. Reno's future is exciting and bright, with the area's leisure and business opportunities and continued development in the downtown area, we are well equipped to meet all challenges.
John Farahi, president and CEO, Atlantis Casino Resort: We are very confident that there is a bright future for the Reno market. Reno is, and remains a highly competitive market. Our numbers continue to grow, and while others may be struggling, we feel strongly that those properties that have strong management, the right product and location will continue to gain market share.
Bill Hughes, director of casino marketing operations, Peppermill Hotel & Casino: Reno got through 2004 well. Thunder Valley and the other Indian casinos didn't affect us as much as people expected, and our market really bounced back in the second half of the year. We are very optimistic about Reno. Our air service is very strong and continues to improve. Marketing the region as a getaway destination will help the market stay strong in the years ahead.
Don Marrandino, senior vice president and general manager, Harrah's Entertainment's Northern Nevada properties: Reno is poised for a pretty decent renaissance. The group of hotel-casinos downtown especially are really working together to bring big time, Las Vegas-style entertainment to the casino core. The mayor (Bob Cashell) has also been unbelievably helpful in that he's taken a pro-business approach to clean up downtown Reno. Harrah's put together free outdoor concerts all summer long to drive people to the downtown core. There have been a lot of positive things going on in Reno. Air traffic is up about 12 percent for the year, which is a very positive thing and people are reinvesting in slot capital, redoing hotel rooms and making their properties first class facilities.
Ferenc Szony, CEO, Sands Regency and Rail City and Gold Ranch hotel-casinos: Reno/Sparks is still a billion-dollar gaming market, and is performing better than many analysts felt it would this year. Both the Sands and Rail City have shown the strength of the local market. Even though the tourist segment has been soft, you will see it improve in the next few years thanks to the redevelopment of the downtown area, the expansion of our convention base and property reinvestment that improves the product.
Amin Visram, CEO, Vista Hospitality Group (Golden Phoenix Hotel & Casino): The Reno market is certainly on the right track and increasingly better every year. The overall population base has significantly increased since 2001 and the future trend seems to suggest that there will be more of an influx into Northern Nevada within the next five to 10 years as evidenced by many expert opinions. Clearly the real estate market is almost in the top five within the United States over the past 12 months.
What, in your opinion, is the biggest issue facing Reno and its gaming industry?
ASCUAGA: The gaming industry in the Reno/Sparks area has several major issues that it needs to tackle in the coming years. First, a third wave of Indian gaming in California is just over the horizon, creating larger Indian casinos, with better amenities. Second, our region needs to address [locals] casinos, their impacts to our neighborhoods, the potential fragmentation of our industry and impacts on downtown Reno and Sparks.
CARANO: The continued expansion of Native American gaming into major metropolitan areas in our primary feeder markets. The image and development of downtown Reno is a close second.
FARAHI: As far as the Reno economy is concerned today, it is by far more diverse than Las Vegas with an unemployment rate of 3.2 percent-one of the lowest in the country. Those properties like ours that rely on locals for a great portion of their business will grow strong. One other factor that is fueling Reno's economy is the rapid growth of our population, which exceeded 4 percent in 2004.
As for the gaming industry in Reno we definitely have been challenged by Native American casino growth particularly in Northern California. But the Reno/Tahoe area has much more to offer to the traveling tourist besides gaming. We feel that our year-round recreational opportunities will be a big draw to continuous growth in our tourism sector. Also the population in Northern California is growing and that will definitely help add to the tourism base for Northern Nevada.
HUGHES: We need to continue to improve the city as a destination getaway and create a superior entertainment environment.
MARRANDINO: Northern California's proliferation of gaming is the biggest. To respond to that, you have to make Reno more of a national destination. The goal is to get "The Biggest Little City in the World" back on the radar as a viable alternative to Las Vegas-style gaming.
SZONY: Investing and keeping the Reno product contemporary and diversified enough to broaden our appeal. Simply being a casino of convenience to Northern California cannot be the strategy for the future. By redefining Reno with a more diversified range of attractions, entertainment and recreational opportunities, we can broaden our appeal and our audience.
VISRAM: One of the biggest issues facing Reno is air traffic. The objective should be to increase the air traffic into the Reno/Sparks area. It is certainly on an upswing relative to what it was a few years ago and needs to be increased even further. However, the bigger issue for the Reno's gaming industry has been its inability to attract many major conventions. With the new event center in downtown Reno, combined with the convention center, it is certainly a better road than three years ago.
In addition, the gaming industry is establishing itself as an entertainment destination with the appropriate food and beverage outlets but needs more retail and choice or boutique entertainment. While many people may argue that California gaming is the biggest issue facing Reno, for us, it is to the contrary because it nurtures new gamers who will now seek a destination/entertainment type of a venue which in close proximity and that happens to be Reno. Therefore when the California gamer visits Reno as a destination, Reno needs to be ready to exceed that individual's expectations with the amenities one expects as a destination.
What would you say is more important: redeveloping downtown Reno or better marketing the entire city?
ASCUAGA: In order to deliver on your marketing messages you have to have a thriving downtown in both Sparks and Reno so tourists have a good experience. Redevelopment efforts are vital to improving this experience.
CARANO: For the City of Reno they go hand in hand. Taking care of the heart of our city by redeveloping downtown Reno with projects like the lowering of the railroad tracks, the new Reno Events Center, the kayak park, the development of downtown high-rise condominium projects, increased riverside shopping and the beautification of Virginia Street are crucial. With the continued support and leadership of Mayor Cashell, our City Council and other downtown leaders, these projects will continue to change the face and image of Reno as a whole.
FARAHI: Not one or the other. Reno has a lot to offer and we have to be focused on our message and communicate all we have to offer to our visitors.
HUGHES: Re-marketing the city and the region, and downtown Reno is a part of that. The region is trying to bring in more special events, entertainment and to diversify the types of conventions that come here. We're marketing the region as "America's Adventure Place," where we have a wide variety of outdoor and indoor activities. We're a regional destination, not just a city destination.
MARRANDINO: It's a chicken and egg scenario. The downtown area needed to be cleaned up with better amenities and entertainment. The market is really Reno and Tahoe, but everyone here (in Reno) has done a good job to make this more of a first-class destination.
SZONY: Product first! To broaden our appeal, the best opportunity we have is the redevelopment of downtown Reno and the river area. That is underway with many new developers looking at downtown Reno as an opportunity. Good marketing is always important, however, you have to start with a great steak before you can sell the sizzle.
VISRAM: There is no doubt that downtown Reno is the core of gaming save for the Peppermill, Atlantis and Nugget, which heavily market the locals in addition to out of state visitors. Consequently, marketing both downtown as well as the entire city would create a critical awareness to the consumer that Reno and its surrounding region has a lot to offer. Thus having visitors come in to Reno/Sparks/Lake Tahoe region not only for gaming but for golfing camping and skiing as well as other outdoor events would be a critical component of the development phase.
What would be the best piece of advice you would give to someone interested in operating a gaming venture in Reno?
ASCUAGA: As in Las Vegas, high quality resort/hotel destinations with must-see attractions will bring tourists to our area. That level of investment in our downtown is needed.
CARANO: First you have to think out of the box. To attract today's gambler, leisure traveler and business groups, you have to offer more than just a great gaming experience. You need to have a variety of offerings including exceptional dining, top-notch entertainment, unique retail outlets, great customer service as well as take advantage of our great outdoor activities. If you take a look at the successful cutting edge properties in our sister city, Las Vegas, they have all of this and more.
FARAHI: Have the right product, which realistically means more upscale than what the market currently offers. Location, location, location-and a management team that can deliver results.
HUGHES: Know your customers and provide a great product at a good value. Reno provides a better value with more liberal slots and table game rules, plus the facilities in Reno keep improving. There is a lot of value in Reno because of the great facilities and the way restaurants, entertainment and hotels are reasonably priced.
MARRANDINO: You have a chance of coming into a place where there is a very pro-business landscape. The market knows it needs to reinvent itself to some degree. It has a service culture with very low turnover in most areas. There are a lot of people and businesses from Northern California moving into the Reno area. We have a great climate, a great, accessible airport. The city needs to be marketed. The RSCVA and the airport authority are doing great things to really freshen up the image.
SZONY: This is not an easy market to be successful in, and is extremely competitive. You must define your position and truly know what your patrons want. Pack a lunch, because it is going to be a long day!
VISRAM: Make sure that you understand your market niche and also the ability to draw from the market that has been identified. Also make sure you understand your venue and the competitive sector.
What are some things you've done to improve your own operations to better suit the Reno market?
ASCUAGA: At John Ascuaga's Nugget we have always believed in reinvesting in our property and offering guests and customers the amenities that they desire. Since 1960 we have recognized the importance of convention business to our industry and over the years we have grown into one of Northern Nevada's premiere convention hotels with over 110,000 square feet of meeting place. In many ways we are a hybrid property with a combination of thriving business traveler and vacationers customer base. We offer both a range of services including high-speed wireless Internet access, a gym, spa and salon and an indoor/outdoor swimming pool and are continually looking at ways to improve our attractions for these segments.
CARANO: We've established joint marketing efforts with our partners at the Eldorado, Circus Circus and Harrah's to position Reno as a hot spot for concerts and special events. We're motivated to change with the times and do so by re-investing millions of dollars back into our property every year to ensure we stay fresh, exciting and progressive.
FARAHI: We continuously reinvest in our product including food and beverage, hotel and gaming. We just finished remodeling our 18-story tower after completing the remodel of our 12-story hotel tower last year. This was an extensive floor to ceiling remodel including marble floors and crown molding. We have the latest, hottest games on our casino floor and utilize the Acres/IGT slot system with NexGen, which I believe is the best in the market. Within the next few months we will be 100 percent ticket-in/ticket-out, which reduces labor and improves both revenue and guest service.
HUGHES: We try to have a strong appeal to locals as a great place to dine and play and a strong appeal to our out-of-town guests as a getaway. We've continued to add restaurants; we've remodeled our slot floor, added new games and became the first major hotel-casino in Reno to offer 100 percent ticket play; and we offer strong promotions, like PepperMillions, for our local customers. Plus we've expanded our apparel shop to improve the retail experience.
MARRANDINO: The interesting thing from an entertainment perspective in Reno is the development of NEWCO-a collaboration of Circus Circus, El Dorado, Silver Legacy and Harrah's. Those properties really work as a group and it's an interesting case study. All these properties check their ego at the door and take collective risks with entertainment options to bring top name entertainment to Reno.
SZONY: As a company, we heavily reinvest into each of our operations and focus on knowing what our patrons want as opposed to copying our competitors. At our downtown property, the Sands Regency, we have recently completed a total renovation of all guestrooms, and have just launched on a casino remodel that will give the property a fresh, contemporary "beach" theme. This spring, we will break ground on an expansion to Rail City that will add 50 percent additional casino space, a new restaurant with outdoor dining, and a new center bar that promises to be "the" gathering place for locals. At Gold Ranch, we have just completed a renovation of our gas facility and now boast the fastest pumps in the west in one of Arco's highest volume gas facilities. We are currently installing the Acres slot tracking system at Gold Ranch so our patrons can benefit from the best slot-marketing program in the industry.
VISRAM: We have done quite a number of things to maximize on our operations. This is evident from our repositioning of the Golden Phoenix Hotel & Casino into a destination of entertainment where we have clearly created venues within our casino to be very inviting. Our position is simple: We have to look at our casino-hotel as an entertainment destination from the inside out. In other words, what are the attractions that we have and how can these attractions help us nurture our existing strategy?
As an example we have created Reno's hottest club, "The Top." This is located on the 21st floor of the Golden Phoenix. We also have the fine dining Italian concept called "VINO'S" which has nightly dancing starting Thursday. In our showroom we have now featured "The Perfect 10." We are currently holding auditions in various parts of the United States to audition ten of the best looking girls in the county. Our Cabaret Lounge features a variety of entertainment on a nightly basis. Hypnolarious Has Gone Wild is a comedy show that we have maintained.
Food outlets include The Top Steakhouse, Benihana, Dueces Diner and Aces restaurant. In addition we have created a food court with outlets such as Pizza Hut, Subway, Dryers ice cream and LaMichoacana, a Mexican-style fast food outlet. These are all creations to attract our market as well as to draw from our surrounding areas and allow for brand recognition to the local as well as out-of- town consumers.
Would you say casinos are working together to market Reno, or is it still each operator on his or her own?
ASCUAGA: The greatest example of the Reno/Sparks market working together is the work done by the Regional Marketing Committee (RMC). This group is made up of not only gaming entities but also ski resorts and area tourism groups. Their goal is to increase the airline service to our region and they have had good success.
CARANO: Times have truly changed and Reno has never worked together as well as it is right now. Cooperation is key and the hotel/casinos, RSCVA and the city have all committed to positioning Reno-Tahoe as a premier leisure, business and gaming destination.
FARAHI: I believe we have come a long way as casino operators working together to promote this fabulous destination. Reno has continued to gain additional air service while most other cities continue to suffer since 9/11. As of January 2005 we have 90 flights a day into Reno/Tahoe International thanks to Krys Bart, our airport authority's executive director, and her team.
Also the Reno/Sparks Convention and Visitor's Authority has developed a plan and put together a team under the leadership of CEO, Jeff Beckelman. The plan coordinates and enhances our region's marketing efforts in bringing more tourists and conventioneers to our destination in addition to filling the 605,000-square- foot convention center which was recently expanded at a cost of $105 million.
HUGHES: Casinos can still be a little reticent about working closely with each other. As the Reno market grows, we'll all benefit from a closer association. The RSCVA is bringing the properties closer together and we'd like to continue to contribute and work with the RSCVA.
MARRANDINO: There is a sense of a collective group that has a common interest-promoting the destination. It's similar in Tahoe. Those two markets have been somewhat in decline and fallen off the radar. I think now you're seeing a collective effort to determine how to get (customers) back. We can't steal enough of each other's customers to be successful. We have to grow the pot.
SZONY: I give great credit to Circus Circus, Harrah's and the Eldorado for pulling together on improving the downtown product. The leadership, particularly from Phil Satre, is making a substantial impact on the revitalization of downtown Reno and the Reno area that will move the market toward a brighter future.
VISRAM: Certainly the RSCVA as well as other agencies are involved to market Reno together. The objective should be that all operators work together on a united front basis. The Reno hotel-casino operators have made some headway in this area but there is certainly room for improvement.
What is Reno's biggest untapped potential?
ASCUAGA: There are few places in the world where you can ski in the morning and play golf in the afternoon. Here you can. While nationally, people are finding out about our amazing outdoor activities, internationally we also have a lot of potential. Reno/Sparks is not just a quick one-night getaway, we are a vacation destination where one could spend three to five days and never run out of activities to experience. In Northern Nevada we need to figure out how to increase our non-gaming revenue with everything from room rates, conventions to restaurants.
CARANO: We have the best of both worlds-great indoor, as well as outdoor, entertainment. Reno-Tahoe's natural beauty and abundance of leisure time activates, including world-class skiing, golf and water sports-all located in close proximity to first-class hotel casinos with outstanding gaming choices and night-life-is something no one else can offer.
FARAHI: We have to do whatever it takes to change the perception of many that Reno/Tahoe does not have much to offer, especially to those living further east. This perception could not be farther from the truth. Reno/Tahoe is one of the most exciting of fun-filled destinations in our country. For year-round recreation, Reno/Tahoe has more to offer than any other destination that I can think of. You name it we have it: Over 45 golf courses within one-and-a-half hours of the airport; Some of the finest ski resorts in both number and quality, again within a relatively short distance from the airport; Fishing, hiking, boating, hunting, hang gliding, biking, white water rafting and kayaking...all here. On a spring day you could go skiing in the morning, golfing in the afternoon and take in a show or gamble in the evening-all in one 24- hour time period. Reno/Tahoe is America's Adventure Place.
HUGHES: We still have an opportunity to market more collectively and get the word out about how attractive a place the Reno/Tahoe area is to live and visit. There are still markets, like Southern California and Arizona, where we could be marketing more effectively. We need to continue to spread the word about the Reno/Tahoe region. We've got 300 days of sunshine a year, 40 golf courses and 18 ski resorts less than an hour away, plus a river park and kayak course, art museums, and events like the Reno/Tahoe Open, National Air Races, the Reno Rodeo and Hot August Nights.
MARRANDINO: It's getting the word out there that Reno is not just a tired little town. It's where gaming kind of grew up. It's cool, nostalgic. The city is also starting to become artsy as well. There's also the proximity to hundreds of outdoor activities. It has first-rate convention facilities and the world's best bowling center.
SZONY: Downtown Reno has huge future potential that can lead the way in repositioning our tourist appeal. Additionally, the outstanding recreational opportunities in and around our community are starting to show their potential, which in the past were mostly kept secret for the enjoyment of locals only.
VISRAM: Charter flights into Reno from destinations no more than an hour-and-a-half to two hours flying time. The amount of charter flights in Vegas versus the amount to Reno compares to a fly on a horse. Reno certainly has the potential to increase these private charters and offer better deals due to the fact that room rates are lower in Reno relative to Vegas. In addition, Reno and its surrounding area does have the ability to accommodate 18,000 to 20,000 people. Unfortunately, the inability of a convention center to accommodate that type of volume is its major untapped potential. Also the Reno Market is a four-season market and the casino operators must capitalize on all those seasons and market venues accordingly.
Name one thing you could change about Reno if you could.
ASCUAGA: I would continue to improve the image of Reno as a great destination and increase our area's non-gaming revenue.
CARANO: Its image. The RSCVA's "America's Adventure Place" campaign is right on target. Positioning Reno no longer as an old west town, but as a world-class outdoor recreation and gaming plus destination. Reno's happening!
FARAHI: Honestly I cannot think of one thing. I know it is hard to believe that. Maybe that is why so many people are moving to our area.
HUGHES: The image of the city. Certainly we're doing things to improve it: the train trench project, the river park and the new Reno Events Center.
MARRANDINO: Reno's behind the times a little bit on the culinary side. I think we need to bring some of the top-name chefs and great restaurants to Reno. That's starting to happen.
SZONY: Reno's major convention center should have been built downtown overlooking the Truckee River with hotel rooms, entertainment and casinos surrounding it. Having the convention space at the south end of town and the bulk of the rooms in downtown has always been perplexing to me.
VISRAM: Entice more gaming and more entertainment venues to include a vast variety of retail, shopping and food. Additionally, [we need] to create an attraction for families and appropriate facilities for the same.
Do Indian casinos in California spell imminent doom, or are they creating opportunities?
ASCUAGA: Indian casinos do not spell imminent doom for Northern Nevada. Our industry is evolving and competition makes a business realize and assess its assets. The opportunity that Indian gaming creates is to help remove the stigma of gaming and is introducing gaming to a larger audience.
CARANO: Native American casinos remain a formidable opponent, but by introducing new players to gaming as a leisure time activity, it creates opportunities in the long term. It is our responsibility to educate these new players of the advantages of the "gaming plus product" offered in our market, versus the "stand alone" Native American casinos where gamers can't even "walk across the street" to change their luck.
FARAHI: Without question Native American Indian casinos in California are introducing many people to gaming entertainment for the first time. Those people will seek more variety and larger entertainment selections in our market. And we can give them that, plus unsurpassed natural beauty and outdoor recreation. We are a gaming-plus market.
HUGHES: They are certainly not creating imminent doom. Reno casinos offer a lot that the Indian casinos don't. Plus, as more people are exposed to gaming they are more likely to see it as a recreational activity.
MARRANDINO: I think, anywhere people find gaming to be a great recreational alternative, it is a good thing. It creates customers.
SZONY: Like any new competitor, they've had a huge impact on the Reno gaming market, but they do not spell the demise of Reno's gaming or tourism industry. Successful operators in the Reno area must be smarter, well financed, aggressive and work together to be successful. At our company, we remain optimistic, and in the first year of Thunder Valley's operation outside of Sacramento, our hotel occupancy at the 832-room Sands Regency downtown, was 86.7 percent! Additionally, if you look at the results of both us and Monarch (which operates the Atlantis), the investment community has adjusted its outlook on the Reno market based on our results.
VISRAM: I personally am a firm believer that the Indian casinos in California will be a means, in an indirect sort of a way, to market Reno. My opinion is that the California casinos act as ambassadors for markets like Reno. Gamers, especially those that have never been inside a gaming establishment, would only like to explore a gaming destination once they have a feel of what gaming is. It is these casinos that are giving them that feel.
Many people that I know personally seek entertainment destinations such as Reno, Las Vegas, Atlantic City and others once they have had a little feel of what gaming is. Once they have tasted the new destination casinos and realize that they have a better chance of winning compared to the odds at non-destination casinos, they become repeat customers. These people, therefore, would never have been customers of the destination market but for the influence of the Indian casinos.
Has the typical Reno gaming customer changed at all in the past few years? And if so, how?
ASCUAGA: We are finding that our customer base is becoming slightly younger and are interested in participating in more activities than just gaming. They are becoming increasingly active in outdoor activities.
CARANO: Yes, the new Reno customer is younger and looking for expanded and more unique entertainment offerings including nightlife, dining, shopping and more. On the gaming side they're looking for the newest and most exciting slots and table games. Today's customer is also more active and is seeking outdoor recreation choices as well the traditional offerings.
FARAHI: Air travel has been growing and we are seeing more conventioneers and outdoor recreational enthusiasts because of all we have to offer. That includes many the fine golf courses and enhanced and growing ski resorts like Mt. Rose.
HUGHES: The customers have not changed much in the past few years, but they are wiser. Customers will get player's cards and have their play tracked, and they understand the benefits of belonging to a player's club. People are more open to gambling as a recreational pastime, as something they do for fun.
MARRANDINO: It's become more of a national customer. It used to be the Sacramento/San Francisco drive-up customer, but now there's (all of) those (Indian) casinos on the way, so if someone wants to game for just an afternoon, they're not driving up here with the frequency they once had. So now, we need to swing a little harder in trying to get more national business. We're even targeting people in Las Vegas now to get them to come up and enjoy Reno.
SZONY: The Reno customer has not changed as much as it will need to. However, we are seeing change at our properties. The major bowling events expose the Reno/Tahoe product to a far broader customer base, and although the average age of the Reno clientele has not dropped, the activity level of these patrons is much different than in the past. I see this each day as I visit our ski and bike rental shop at the Sands Regency, or look at the number of guests that take advantage of our ski and golf packages.
VISRAM: Certainly the empty nesters (50- to 70-year-olds) are more of a market in Reno. The Reno market also needs to attract the single-income or double-income family. The weakness that the Reno market has is that it is not yet a destination for families, which it can draw on and can be with the appropriate infrastructure. In addition, if more food and beverage outlets outside of hotels were created, that would also draw more of the 25- to 45-year-olds. The outdoor campaign is certainly bringing in golfers and skiers.
What would you say is the best lesson learned or most useful information gleaned from your time operating in Reno?
ASCUAGA: Business is not a sprint, it's a marathon and therefore proper long- term planning is essential to running a business. Long-term commitment to the community and to the evolving industry to both tourists and residents alike will increase your chances to succeed.
CARANO: You must re-invest and stay current with your product and have quality and consistency throughout. You also have to give your players a great shot at winning in the casino. Your employees are the key to success; you must have the best employees in the business to reach you goals, which Silver Legacy does.
FARAHI: That our guests are looking for quality and value. The average tourist has become much more demanding and sophisticated. If we meet their expectations we will be rewarded with success.
HUGHES: Continue to stay focused on providing the best service and best product at the best value. Appeal to locals with quality service and great facilities that make them feel comfortable and give our out-of-town guests a quality getaway at a great value. Also, to reinvest in the product and make it as good as it possibly can be.
MARRANDINO: I think the cooperation between the properties and the business community is great. It's a model for a lot of other places around the industry to realize that people can work together, even though they may be competitors.
SZONY: Persistence. Reno is not a market that you can relax in, or that you can coast. You must be innovative, and define your business strategy and stay on it for the long haul. Having a strong business model and sticking to it is the key to success in the Reno market.
VISRAM: The Reno market is full of untapped potential. The community at large is now working together and is making a good effort but can exercise even greater effort. Specifically, the downtown Reno market can become a home for many more events in addition to the current events. With being an outdoors market, it is critical to attract the type of events, functions and conferences catered to that type of a consumer. More entertainment-related events have been received well and capitalizing on the four seasons is a strong ingredient. Marketing and increasing the choices available to the customer would result in more guests and more room nights, which would then result in more casino play and thus overall increased taxation for Reno.
