No Reservations: How Hotel Development Benefits Norco
Several hotel projects are approved or under construction in Norco. This is not only good for tourists, but represents a sound economic development strategy.
Norco is currently experiencing considerable activity in hotel development, and there are reasons the trend could continue. Under construction is a WoodSpring Suites, south of Fifth Street on Hamner Avenue. This 122-room extended-stay hotel is scheduled to open in early September. A 90-room Holiday Inn Express project was approved for the southeast corner of Fifth Street and Hamner, although the project has been delayed. A 108-room Tru Hotel, a new brand from Hilton, has been approved for the site immediately north of the Fairfield Inn & Suites by Marriott, and that project will soon enter the plan check phase prior to construction. Several additional hotels have been proposed by developers but no formal applications have yet been received.
The Norco Market
Norco, despite its small population, is home to a vibrant hospitality market—the Fairfield and Hampton Inn are consistently sold out—and experts believe the City can accommodate at least four or five additional hotels. SilverLakes, which now draws more than 1.5 million visitors annually, is the main driver of demand for hotel rooms, as many attendees currently stay as far north as Ontario and as far south as Lake Elsinore. In addition, the George Ingalls Equestrian Event Center draws another 450,000 visitors annually, and a growing number of those visitors seek overnight lodging.
SilverLakes and Ingalls, however, are not the only drivers of demand. The U.S. Naval Surface Warfare Center generates substantial demand for overnight accommodations, as consultants, defense contractors and top brass from Washington, D.C. make frequent trips to the base. The Norco Rehabilitation Center draws California Corrections Department officials from Sacramento, as well as consultants from across the country, and the Corona-Norco Unified School District also generates travelers. Moreover, the City is strategically situated in the Inland Empire to serve thousands of companies throughout the region, all of whom contribute to business travel. And Norco is also a strategic home base for families visiting Southern California from around the world who want to be equidistant from Los Angeles, Orange County theme parks and Palm Springs. The City’s convenient location is enhanced by its proximity to Ontario International Airport, which is now the fastest growing airport in the nation. Furthermore, there is growing interest among travelers to experience the Horsetown USA lifestyle, even for just a weekend.
Staff believes that all of the new hotels will thrive in Norco, particularly because each one will appeal to their own specific clienteles. Many travelers are brand-loyal, anxious to accumulate Marriott or Hilton Honors points, while others are more conscious of room rates or specific amenities. For instance, WoodSpring Suites appeals to a particular value-oriented segment of the extended-stay market, which leaves open a niche for an extended-stay hotel with higher price points. This strategy of giving every operator an opportunity to succeed is a popular theme with major hospitality companies.
All guests at Norco hotels pay an 11 percent transient occupancy tax (TOT) on the cost of their rooms (e.g. $11 on a room rate of $100), which is one of the most direct sources of revenue to the City of Norco. In comparison, that 11 percent far exceeds the two percent collected from taxable sales transactions, and it is paid not by Norco residents but by visitors to our City. Enhancing that potential revenue is one reason staff has been very aggressive about recruiting hotel developers to Norco.
Timing is also a factor. The hospitality industry has experienced unprecedented growth in the past nine years following the Great Recession, but that expansion will not last forever. Although Norco’s attraction as a destination is more recession-proof than other communities, it is important to secure as many commitments from hotel developers now before there is a cyclical adjustment to the industry. If financial institutions were to pull back on lending for hotel projects nationally, Norco would be affected.
Hospitality is an attractive industry for Norco because it does not create any major disruptions to the lifestyle Norconians cherish. It draws tourists who appreciate the local lifestyle and contributes to the economic stability of the City, imposing taxes on visitors instead of residents. Encouraging new quality hotels, therefore, is a sound economic development strategy that results in minimal adverse impact to the community.
Let’s invite the world to check-in to Norco, where they can enjoy a taste of genuine Horsetown USA hospitality!
For more information, contact the Economic Development Department at (951) 270-5644 or firstname.lastname@example.org.