The Reality of Our Tourism-Driven Economy During COVID-19

(And what we need to recover)

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BY JEFF HENTZ | Moonshine Ink

For decades, North Lake Tahoe’s economy has been reliant on tourism. This fact isn’t lost on local business owners, employees, and longtime residents who have (or haven’t) weathered recessions, dry winters, and other events that have significantly reduced visitation to our region. This time, though, it not only feels different, it is different. Until COVID-19, there hasn’t been a time when as a region, we’ve actively discouraged visitors and a taxpaying part-time resident population who make up almost 70% of our community from spending their time and money here. Although necessary to maintain the health of our community and limit impacts on our local health system, this action, regardless of how temporary it may be, has caused dramatic and swift impacts to our local economy that will undoubtedly be felt for some time.

Every year, North Lake Tahoe welcomes over 8 million visitors who spend $835 million in our communities. When visitation and spending at local businesses of all kinds comes to a screeching halt, the impacts are far-reaching and not limited to business owners. The leisure industries (lodging, restaurants, retailers, and activity providers) make up 60% of the jobs in North Lake Tahoe. With some minor exceptions, that means the COVID-19 pandemic has put nearly 60% of our workforce out of a job. When tourism is paused indefinitely in North Lake Tahoe, our entire region misses out on the collection of Transient Occupancy Tax (TOT), sometimes known as the “bed tax,” a rental tax that is paid by the guest for room nights within a period of 30 consecutive calendar days or less.

TOT, in addition to property tax, is one of our region’s primary funding mechanisms. TOT dollars are used to help fund tourism initiatives, marquee events, infrastructure improvements, public parks, and transportation; things we all benefit from and enjoy.

North Lake Tahoe is not alone when it comes to economic losses as a result of COVID-19. Visit California, the state’s tourism board, reported that over 613,000 tourism sector jobs and $24 billion in tourism-related revenues have been lost in California since March.

Despite these challenges, Visit California also reports that the tourism industry has historically proven to be one of the most resilient economic sectors. In fact, it took two years less time for the travel industry to recover from the Great Recession compared to the rest of the economy. While we don’t know for sure how long COVID-19 will continue to impact our livelihoods and our local economy, it’s imperative that we remember we’re stronger together. Whether you are part of the 27% of North Lake Tahoe residents who live here full time or the nearly 70% of our population who are part-time residents who contribute to the viability of our incredible mountain community, we need you.

We are resilient. We are supportive of our local business community, friends, and neighbors. And, when the time comes to welcome visitors back to North Lake Tahoe, we’ll rise up to once again demonstrate the collaborative, supportive spirit of our region. Of that, I am sure.

~ Jeffrey Hentz is CEO of the North Lake Tahoe Resort Association/Chamber of Commerce. Bringing 30 years of experience as a destination marketing and tourism industry executive, he has worked with leading consumer and tourism brands within the destination marketing, hotel, resort, cruise line, and theme park industries.

1 COMMENT

  1. Unfortunately, second home owners, their guests and tourists all travel from areas where Covid is active. They can bring Covid to our community as the travel back and forth. The sensible thing is to ask them to stay away until the pandemic is controlled. South Lake Tahoe and Truckee have been more aggressive in discouraging travelers. I know businesses in NLT are hurting (and I personally have experienced significant loss from reduced tourism) but it is better to be safe rather than seeking profit in these times.