The “biggest little city in the world” is looking to get a little bigger, both in terms of population and visitors. The Northern Nevada hotspot of Reno is doing so by diversifying its offerings to appeal to more than mere gamblers.
“‘Diversification’ is the best way to describe the continued resurgence of tourism and hospitality in the Reno-Tahoe market,” says Fred Steinmann, director of the University Center for Economic Development at the College of Business for the University of Nevada, Reno. “Special events, outdoor recreation, as well as continued investment in the traditional gaming-hotel aspect of the area’s tourism and hospitality sector is creating a very diverse set of attractions.”
It's also creating motivation for reinvention.
Reno, Reinvented
Northern Nevada has come a long way over the past 25 years.
“If one begins to take into account the broader outdoor recreation and special event space, the Reno-Tahoe market…continues to experience a resurgence from the dark days of the late 1990s and early 2000s through the Great Recession,” Steinmann explains. “The accelerated population growth of the region and the rapid recovery of the region’s economic base is proof that this strategy of diversification, combining outdoor recreation with advanced manufacturing, has been a success.”
The area has invested tens of millions of dollars in outdoor recreation areas, which included adopting the Parks, Recreation and Open Space (PROS) Master Plan late last year. This plan will enhance existing outdoor amenities, as well as new activations surrounding the Reno Truckee River corridor and downtown public spaces. The city has also fostered an employment sector that focuses on lithium batteries, critical elements and other electric vehicle materials. This has brought companies like Panasonic and Tesla’s Gigafactory – one of the largest lithium-ion battery factories in the world – to the region.
It has also led others – namely, hotel investors – to follow suit as the area collectively ushers in a new era. The Atlantis Casino Resort Spa renovated all of its rooms in 2023. The Peppermill Resort Spa Casino is undergoing a partial renovation that will conclude this year. The Whitney Peak Hotel (formerly Fitzgerald’s) is being gutted and renovated, having recently joined Hilton’s Tapestry hotel brand.
Speaking of rebrands, the former Sands Regency Hotel underwent a $300 million makeover in 2023 that saw it renamed the J Resort. This hotel is part of a nearly $1 billion proposed multi-use revitalization that would transform the East 4th Street corridor. It would reimagine 23 blocks and 40 acres within the historic district.
Then there’s the private capital infusion of $1 billion for the Grand Sierra Resort. The largest private capital investment in the city's history will include adding an 800-room hotel tower, as well as a new active golf facility and entertainment destination with a scenic walking path and water show, among other items. The project’s pièce de resistance, however, will be a 10,000-seat arena.
Christopher Abraham, chief marketing officer at Grand Sierra Resort, believes this space will not only benefit his hotel, but others in the area.
“The programming that’s possible in a 10,000-plus arena will undoubtedly draw more visitors to our market,” he argues. “The entire market should see increased hotel demand once the arena is open. Multi-team events, tournaments, and NBA and NHL pre-season games will create demand that hasn’t existed before.”
Demand will be further spurred by the fact that Reno/Tahoe is a “short one-hour flight” from every major city on the West Coast, according to Abraham, who notes that the next closest arena is more than 100 miles away (over a mountain range) in Sacramento, Calif.
“And it does very well,” he adds. “These events will drive hotel demand and revpar across the region and create more opportunities for investment.”
Tahoe's tempered growth
The South Lake Tahoe area is also diversifying. It debuted its own new event center, the $80 million, 132,000-square-foot Tahoe Blue Event Center, last October along Highway 50 in the resort corridor.
“The opening of the new Tahoe Blue Event Center in Stateline is already proving a success in attracting critical mid-week visitation,” Steinmann says.
Rebranding is evident here as well.
Across the highway (street) from the event center, the former Hard Rock Lake Tahoe is transforming into the Golden Nugget. It was purchased in all cash by Fertitta Entertainment in 2023. Farther east on the corridor is the 399-room Margaritaville Resort Lake Tahoe, which opened in December after a $70 million transformation of the old Lake Tahoe Resort.
Despite this activity, Steinmann notes Tahoe – particularly the state border area of South Lake Tahoe known as Stateline – has been “much slower” in terms of new investment when compared to Reno.
He offers a few reasons for this. One is the expansion of tribal/Indian gaming in Oregon, Washington, Idaho and, especially, California. There is also the issue of climate change, its impact on water sources and the elevated fire risk it can cause.
Then there are the constraints associated with being a small mountain town. Namely, poorly behaved tourists, competition from short-term rentals and a workforce housing crisis.
Steinmann clarifies, however, that Reno has faced the same gaming issues, and many outdoor destinations deal with rowdy tourists and Airbnb.
“The Payette Lake-Boise area in Idaho and the Park City-Salt Lake City area in Utah – to name just two – have been dealing with the exact same concerns for decades and, with the challenges of climate change and affordable housing availability, will likely continue to deal with this for the foreseeable future,” he says. “I think that it is still very unclear as to how these elements and challenges will impact the area’s perception from a hotel investor’s standpoint.”
Abraham believes there’s one place you can look when determining where hotel investor perception may land in the Reno-Tahoe region. And that’s up.
“Keep an eye on airlift,” he says. “We have seen some recent growth in the number of seats available to Reno-Tahoe International Airport. Our ability to grow demand and create additional flights will be a determining factor on how much capacity the market can handle.”