New Hampton Inn heralds strength of business hotels

A new business class hotel is coming to Reno.

Next month, Tanamera Construction LLC will break ground on a Hampton Inn owned by Sushil Patel, the owner of five local hotels, including the existing Hampton Inn and the Staybridge Suites in Reno and three independent hotels in South Lake Tahoe.

The $8 million, 58,000-square-foot, 86-room hotel is being built at Robb Drive and I-80 and is expected to open in December.

Patel says it’s a good location, away from downtown Reno but with easy access to it and elsewhere for its predominant clientele, the business traveler.

“I like the suburban areas,” says Patel, whose other two Reno properties are in South Meadows. “The traveler likes to be in a nicer area. They want to feel secure and safe.”

The project was delayed for a few years when financing dried up due to the recession, says Patel, and the go-ahead on it is another sign the Reno market for non-gaming, business-focused hotels has improved significantly in the last year.

“As a whole, business travel is very strong right now,” says Stephen Johnston, general manager of Courtyard by Marriott Reno. “It has basically recovered.”

Johnston said business began to pick up last year, when the Courtyard finished the year with its strongest fourth quarter in at least five years and with average 80 percent occupancy for 2013.

“That’s very strong performance for any market,” says Johnston. “At the same time we’ve been able to keep our average daily rate high while maintaining occupancy.”

The hotel has been able to up its negotiated rates with its business clients, which had been negotiated lower in lean times, and make up ground with rates that now surpass those negotiated before the recession.

Johnston says businesses, after cutting travel budgets to contain costs, are traveling again.

“During the recession, people worked remotely. Travel is a controllable expense so if a company can get by without sending people, the company can save a lot of money that way,” says Johnston. “But it’s difficult to grow a company without travel.”

The Hyatt Place at the Reno-Tahoe International Airport had a banner year in 2013. The 126-room property opened in late 2009 and struggled for years, although it gained business every year, says Chalmer Dillard, general manager.

“The third year was better and last year was a record-breaking year,” says Dillard. “2013 results exceeded all our budgets and forecasts.”

Dillard says business travelers tend to be loyal to a brand, especially one at which they have built up rewards through loyalty programs.

“The flag is very important,” says Dillard.

Both Johnston and Dillard see a strong year ahead.

“It’s been somewhat of a struggle so far because of the poor ski conditions,” says Dillard. “But this last weekend with the holiday was very good, and with the business we already have on the books, we think 2014 will be as good as 2013.”

Both the Courtyard by Marriot Reno and Hyatt Place are owned by InterMountain Management LLC, in Monroe, La., which owns a portfolio of about 75 properties that also includes the Courtyard by Marriott in Carson City, the Fairfield Inn & Suites in Sparks, and the Homewood Suites in Reno.

Although they cater to the business traveler, the hotels rely on the leisure traveler as well, especially on the weekend, when they compete more directly with gaming properties.

“The main challenge for everyone, regardless whether it’s a gaming or non-gaming property, is to get more travelers to come on weekend,” says Johnston.

Special events help draw visitors, says Johnston, but even better would be if travelers felt they had many reasons for coming here, making Reno more competitive with other regional weekend getaways such as Napa Valley.

“What we need to do is make our destination more attractive to people who have a choice,” he says.