Napa’s River Terrace Inn welcomed its first guests 15 years ago this November.

Located along the Napa River at the north end of the Oxbow District, “the upscale boutique hotel was a linchpin in the redevelopment of downtown Napa,” said Bob Gustin, the hotel’s developer.

Today, the hotel features 113 guestrooms and suites, 3,200 square feet of event space and Alba restaurant and full bar. The terrace along the river features live music twice a week and is popular with locals. The hotel underwent a major public space renovation in 2017.

A decade and a half later, the River Terrace Inn is still owned by the original investor group – Wine Country Hotels LLC. Noble House Hotels & Resorts manages the hotel.

Bob Gustin, the hotel’s developer and a member of Wine Country Hotels LLC, noted the hotel environment in the Napa downtown area was much different in 2003 than it is today.

Although Napa developer Harry Price had already opened the Napa River Inn, the development of River Terrace Inn was considered to be a risky pioneering effort since the hotel was not located on Highway 29, recalled Gustin.

A number of well-respected hotel companies turned down the opportunity to manage the hotel as they felt a hotel in this location would never be successful, he said.

“When I submitted my development plans to the city of Napa in 2000,” there were fewer dining choices, he said. “Hotel operators did not feel there were sufficient amenities in the area for hotel guests – particularly for an upscale independent boutique hotel.”

However, by the opening of River Terrace Inn, Copia and Cole’s Chop House had also opened. Angele and the Napa riverfront promenade followed later, along with more restaurants.

Another obstacle for the hotel’s development was the terrorist attacks on Sept. 11, 2001.

River Terrace Inn was approved by the Napa City Council in 2001 and was on track for a ground breaking that year.

But after the terrorist attacks the hotel lost its lender. Virtually all hotel development across the United States came to a halt as lenders became nervous about the impact of the attacks on travel, said Gustin.

However, in the fall of 2002 Gustin successfully obtained a loan and broke ground on the River Terrace Inn.

Since then, River Terrace Inn has been a huge advocate in the development of both the Oxbow District and Downtown Napa, as well as in the growth of popular neighboring destinations such as the Oxbow Public Market, the Napa Valley Wine Train and the new Oxbow Commons Park, said Gustin. The hotel also continues to donate a portion of the room rate to fire relief efforts.

Looking into the future, with numerous new hotel projects in various planning stages with the City of Napa, Gustin believes there is a limit on how many hotels Napa can support.

“Warren Buffett said there are three I’s” of every business cycle: innovators, who see opportunity where others don’t; imitators, who take note of what the innovators are doing and mimic it (with varying degrees of success); and idiots, who jump on the bandwagon far too late with poorly executed attempts to cash in on what everyone else is doing,” wrote Gustin.

“It is up to the City Council to ensure Napa does not reach the idiot phase. There is no way the city can successfully add 1,200 more guestrooms. Visitors come to the Valley for a relaxing getaway and not to be stuck in a traffic jam on Highway 29,” he said.

Gustin believes the city needs to be more selective in approving future hotels with an emphasis on hotels within walking distance of downtown to support its retail and restaurants.

Other changes have affected the Napa hotel industry within the last 15 years, said Gustin. In 2003 Napa Valley still almost had a lock on people seeking a wine country experience.

Now other wine destinations such as Healdsburg, Paso Robles and the Willamette Valley in Oregon have come into their own, giving wine lovers other options for their vacations.

Paso Robles, for example, is experiencing exponential visitor growth with many people making the drive from Los Angeles or San Francisco.

Another challenge that exists now that did not in 2003 is hiring employees, said Gustin. “Back in 2003 most of our workforce lived in Napa,” he said. “Now many have to commute.”

And with two major hotels soon to open in the Calistoga area this will create an even larger shortage of employees, said Gustin.

To help alleviate that, he supported the recent Measure I to increase the Transient Occupancy Tax for affordable workforce housing.