As a kid, I remember visiting Reno with my family during the summer. It was a perfect distance from Southern California with a variety of activities to satisfy everyone. I still remember how in awe I was of Reno’s famous “Biggest Little City in the World” sign.
Since then, the city has been through some tough economic times due to the success of Indian Gaming in California, the recession and the lack of investment from government agencies and property owners. Let’s just say, the lights on the sign had somewhat dimmed.
Despite the tattered past, I have always considered this place, located in the high desert at the foot of the Sierra Nevada, a diamond in the rough. And in the casino industry, it is the birthplace of Caesars Entertainment Corporation. How cool is that? But as I began telling people about my move from the beautiful southern Oregon Coast to Reno, I was amazed by the responses about my new home base. It was not good, but as I asked questions, I realized they had not been to Reno for years. The perception was based on yesterday’s news.
Today, Reno has successfully courted and landed tech companies like Tesla, Apple, Intuit and recently, CAEK, a female-founded software technology company, along with many others. Gaming revenues recorded a 4.5 percent increase last year—on top of millions of dollars in reinvestment into the downtown and midtown areas. The Riverwalk along the Truckee River continues to see improvements and the historic post office building has transformed into an eclectic mix of trendy shops and restaurants.
The most impressive part of the transformation is that they are building on the character and charm of Reno’s history and modernizing the infrastructure and amenities to attract a more diverse clientele. It’s a brilliant mix of repurposed historic buildings with a modern flair. Non-gambling adventure seekers are finally being recognized; with niche lodgings like the Renaissance Reno Downtown Hotel (formerly the Siena Casino) that features bocce ball as an attraction and the Whitney Peak Hotel which is making a play for climbing enthusiasts.
Kudos to the business leaders and developers who understand the value of this iconic city… unlike other towns that demolish the “old” to create something “better,” this community seems to appreciate the value of maintaining its unique history while optimizing it for the future.
Let’s face it; many jurisdictions are saddled with increased competition and aging properties like Reno. Atlantic City is fighting back with internet gambling, which recorded a 32 percent increase in 2016. This won’t solve the problem of aging infrastructure, but it does offer insight into potential revenue opportunities for innovative operators.
As for Indian gaming, the properties are just beginning to show the signs of age. At the same time, tribal governments have become over-dependent on casino revenues, leaving little for capital investment. Another twist is the sad fact that most CEO’s and executive management teams are rewarded for results from the prior 12 months’ performance; while publically traded companies have leaders under more pressure than ever to produce monthly and quarterly gains. This creates a situation that discourages long-term planning and spending on unproven programs or non-revenue producing infrastructure that does not produce instant results. Unfortunately, such programs could be beneficial to the business in the long run.
The end result, to adopt a quote from Ernest Hemingway, is a decline that “happens slowly and then all at once.” And when the decline does happen, there’s usually institutional amnesia as to how the business got into this position in the first place. Rarely is the overall lack of performance the result of one individual or one decision; often it’s the repeated philosophy seen at so many companies in trouble—the constant pressure applied to general managers and slot manager to get the “numbers up” now.
Remaining relevant requires operators to look outside the industry to understand trends. By making strategic planning part of your company culture and identifying it as a performance outcome, organizations can better anticipate business trends as opposed to reacting to them.