Mark Anderson Staff Writer (bizjournals.com)
The tribe that owns the wildly successful Thunder Valley Casino in
Placer County is now thinking seriously about adding a hotel.
That's always been the long-range goal, but in the past month the
idea has advanced from someday to maybe now. The reasons include the
stunning performance of the Cache Creek casino hotel, which a separate
tribe opened in Yolo County last year, plus market demand.
Financing wouldn't be a problem. The United Auburn Indian Community
earns more than $225 million a year from the casino, and a plush
200-room hotel could be built for a fifth of that amount.
Other Native American casinos in the region feature hotels and
resorts, so gamblers increasingly expect them. A hotel is also a good
match for Thunder Valley, and a good business -- the Cache Creek Casino
Resort hotel in Yolo County is the most successful in Greater
Sacramento, measured by how often it's full.
"The tribe is seriously considering the possibility of building a
hotel at Thunder Valley, but nothing has been specified," said
spokesman Doug Elmets. Options range from standing pat to opening a
hotel within a couple of years.
The tribe would build the hotel on 49 acres it owns northwest of
Athens Avenue and Industrial Avenue.
2,700 slots, often full at peak hours
Thunder Valley opened in 2003 with 1,900 slot machines, then added
800 more after reaching a revenue-sharing deal with Gov. Arnold
Schwarzenegger in June 2004. Even so, finding an open machine can be
hard during peak hours.
The casino also has 98 table games, nine restaurants and five
bars.
The tribe doesn't disclose the casino's earnings, but industry
observers estimate that Thunder Valley easily takes in at least $300
million a year. Earnings are split roughly 3-1 with Station Casinos
Inc. of Las Vegas, which has a contract to manage the casino until
2010.
The hotel would become another investment for the tribe, and help
convert current earnings into long-term cash flow.
Station owns land in the area too. At the end of 2002 it bought 98
acres to the south, across Athens from the casino. The land has
overflow parking for the casino but is zoned for industrial uses.
A Station spokesperson said the company bought the land as an
investment and has no immediate plans to use it for anything more than
parking.
Sellouts in Cache Creek
The Rumsey Band of Wintun, which owns Cache Creek Casino Resort in
Brooks, opened a 200-room luxury hotel and spa in June 2004. The hotel
sells out every weekend, and runs 97 percent to 100 percent full
daily.
"Reservations are really recommended," said Wendy Waldorf,
spokeswoman for the resort.
The hotel has more amenities than most local hotels. It charges some
of the highest room rates in the region, starting at $129 per room
during the week and rising to a starting rate of $190 on the weekends.
It also offers luxury suites.
The hotel is on track to close out this year with close to 98
percent occupancy. That's phenomenal in the industry, where hotels
usually break even at 70 percent occupancy, and where running 80
percent full is considered strong.
Occupancy in the Greater Sacramento area's hotels through September
of this year is 74.7 percent, nearly flat with 74.6 percent a year
earlier. The average rate in Sacramento hotels is $97 per room, up from
$92 a year earlier, according to figures compiled by PKF Consulting in
San Francisco.
"I'm sure the Auburn tribe is thinking that if Cache Creek can do a
hotel at their casino, then Thunder Valley can do it too," said Roger
Swahn, hotel development consultant with the Swahn Group in Granite
Bay.
Market impact
Swahn recently applied for permission to build a 98-room Staybridge
Suites on Blue Oaks Boulevard in Rocklin. It would be the closest hotel
to the casino, but wasn't proposed with the casino in mind. The
Staybridge would expect to rent rooms to corporate travelers.
"The executives who are going to do business with Hewlett-Packard or
Oracle aren't going to be spending the night at the casino hotel,"
Swahn said. "They don't want that showing up in their records."
But all the hotels along the Highway 65 corridor probably benefit
from the casino, he said, and probably would even if the tribe built
its own hotel.
The other hotels in Roseville and Rocklin have gained business from
the casino, especially on the weekends. It is difficult to quantify the
gain, said a spokeswoman with Larkspur Hospitality, which owns two
hotels in Roseville.
This summer, Roseville's Hallmark Development & Realty Corp. was
marketing three hotel pads and a small office park on 15 acres just
north of Thunder Valley Casino. A call to Hallmark seeking its comments
on the tribe's potential hotel was not returned midweek.
