Increasingly, visitors are unwilling to shell out exorbitant fees to visit a tasting room.
If you think visiting California wine country is only for the wealthy, you might be right.
Visits to tasting rooms at West Coast wineries after the 2021 recovery this summer have fallen significantly compared to pre-pandemic numbers, according to a survey of 400 wineries released last week by a company called Community Benchmark. Also, according to Smith Travel Research, hotel bookings in the Napa Valley are declining, no wonder given that the average daily room rate of $455 is 43 percent higher than in 2020.
In Yountville, where the French Laundry restaurant is still a major draw, the average hotel room is now $934.
But while hoteliers and restaurants in wine regions may not be happy, wineries probably won’t be too upset, as average revenue from tasting room visits has increased from an average of $80-$100 in 2019 to an average of $110-$125 today .
There are fewer visitors but they spend more. For most wineries, this is a very conscious compromise.
“There has been a big shift during Covid,” said Rob McMillan, executive vice president of Silicon Valley Bank’s wine division. “We have moved away from a walk-in model, which was the style of tourism in 1972. Back then it was all free tastings. People came in, they tasted it for free, and they went home and shopped at grocery stores. Everyone had a distribution. Now all new wineries must be by appointment. I’ve been saying for a long time that by appointment is a better model. It limits the number of people. If you go and it’s a zoo, you might see more people, but it might not be as good as you think. During Covid, all wineries running a blended model have realized, ‘This appointment thing works pretty well’.”
However, there is a long-term risk of increasing prices and restricting access. There’s no doubt that every winery — frankly, every business — would rather have wealthy customers who can lose upwards of $1,000 in a day without even thinking about it. That’s how much a day in Napa Valley costs today for a couple who stays in an average hotel room, eats lunch and dinner at restaurants, visits two tasting rooms, and buys a bottle of Cabernet to go. (Earn $2000 a day in Yountville for this.)
Maybe that’s reasonable: It’s the cost of a day in New York City with a hotel room, regular-price tickets to a Broadway show, and two meals at restaurants. And you should see the daily rate on a dive boat or trip to Antarctica. It’s just that these comparisons weren’t used for wine country visits until recently.
The San Francisco Chronicle, the closest major newspaper to the Napa Valley, topped that issue this month with two articles by its Napa-based reporter Jess Lander. She contacted a number of residents in the surrounding Bay Area who complained about the price of the tastings and the inability to make impromptu visits.
One Antioch resident who attempted to enter wineries without an appointment told Lander, “We listened [staff] screeching and complaining and continuing to talk about how they were ghosted from a series of dates and we stood right there, bird in hand.
The tasting room experience itself is much more upscale, as many wineries offer food pairings and a dedicated staff member to explain the wines. But prices for these tastings continue to climb: $40 is now entry-level in Napa and Sonoma, and many tastings cost more than $100. Wineries used to waive tasting fees with the purchase of a bottle, but few do so today.
According to McMillan, part of the drop in attendance is due to the difference between 2021 and 2022.
“You couldn’t travel in 2021,” McMillan told Wine-Searcher. “It hasn’t opened up like it does now when the TSA has a record number of people they’re trying to process. We couldn’t even go to basketball games for parts of the year. There were roadblocks on beaches. I don’t go to college games. Get out and go to Napa, go to Sonoma, go to a hotel with a mask — that was 2021. We’ve had a really good year.
But McMillan, who has been promoting younger people for years, says there are worrying trends in wine country. Napa, and to some extent Sonoma, isn’t reaching new and younger wine drinkers like it did a few years ago, in large part because prices are so high.
“The low-price part of the market has been suffering for a long time and it’s only getting worse,” McMillan said. “The premium side that has been doing well for so long is slowing down.”
On my first personal visits to Napa Valley, I’ve slept in mud baths, I’ve slept in a converted railroad car, I’ve eaten at bistro restaurants. Importantly, I’ve tasted at dozens of wineries on my journey to becoming the wine lover I am now. That is not possible today for young visitors unless you have a trust fund.
“It might sound flippant when I think about the premium side of the market, but we’ll always have the rich,” McMillan said. “The wine side seems to be doing very well.”
Still, you have to worry about the future. Today’s middle-aged middle class emerged at a time when they could still afford to taste almost the best. Now they’re seeing a giant “You’re Not Rich Enough” dollar sign hovering over much of the wine industry.
Wineries need good luck with anti-aging research if today’s affluent visitors can live forever.
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