BY BECCA LOUX AND ALEX HOEFT | Moonshine Ink
Update, March 24, 12:41 p.m.: The Town of Truckee says it is looking to stop short-term rentals and visitation, via Nixle. Ron Parson’s title with Granlibakken has been updated.
COVID-19 has proven to be a microscopic foe with the power to shut down the Tahoe/Truckee region’s leading money-maker.
The confinement to homes is one thing; what the local tourism industry will see once the novel coronavirus has peaked will be an unprecedented time, according to North Lake Tahoe Resort Association CEO Jeffrey Hentz.
Prior to the pandemic, Hentz said his communication with area resorts and the lodging industry left him confident that tourism rates were above average.
“Then the bottom fell out,” Hentz told Moonshine Ink. “And with 70-plus-percent of our resorts and properties closed … we’re going to go from solid numbers to horrific numbers.”
Hentz predicted that due to only losing up to three weeks of solid tourism revenue in the financial quarter that ends April 1, the current quarterly report should “show decent numbers,” but, he said, “it’s April, May, and June that could look like no other quarter in the history of our region.”
And yet, what choice does the area have? As social distancing recommendations have turned to “stay at home” mandates from the state down (including the closure of ski resorts), the region’s economic leaders have broadcasted a message warding away tourists from the fresh powder of last weekend, and whatever snowpack is still to come, all in an effort to slow or defeat the spread of the virus.
But the backcountry is seeing holiday-level crowds. And parties still willing to come to Tahoe and stay in short-term rentals aren’t being denied access, and in fact are practically encouraged to do so through the discounted prices and enticing descriptions on short-term rental platform listings. The potential strain on the remaining essential businesses is worrisome for locals; enough so that it’s inspired a petition to ban STRs until the coronavirus panic has settled.
Don’t show up. Don’t come out.
The wording was clear from the Truckee Chamber of Commerce last week, and it was one of the first to go this far: “Now is NOT the time to visit Truckee.”
When that plea went out on social media and to an email newsletter list of 38,000, people perked up. It was a “proactive measure of sending that really hard message in an authentic Truckee way, which is we love you, we miss you, we’ll be here,” explained the Truckee chamber’s Colleen Dalton, author of Visit Truckee’s March 17 request that visitors pause their travel to the region, while packing her office up and preparing to work from home this past Friday.
California Gov. Gavin Newsom’s mandate via executive order two days later that people stay home except for essential needs doubled down on Visit Truckee’s request. (See our coverage of how the order directly impacts area residents.)
Hentz said that the North Shore business community is also rallying together around the strange new goal of keeping visitors away, encouraging potential visitors to be safe and stay away from the area in the interest of ending the coronavirus threat.
Granlibakken Tahoe closed all services while maintaining “minimal hotel operations for our homeowners and the safety of our current guests,” according to a Saturday morning email. Co-owner Ron Parson is focused on the coronavirus’s effects on the local economy. “What we really should be talking about,” he said, “is how can we minimize the risk globally and nationally and still allow people to function.”
Parson is not a COVID-19 denier, by the way. He wanted to make it clear that he 100% believes the coronavirus is “a major global and national strategic issue.” His argument is that Tahoe needs to adapt logically; the region needs to be thinking beyond the cliff, beyond the minute-by-minute updates. He compared the current potential outfall to the 2008 recession, during which the economy was falling apart.
“[Last] weekend we lost somewhere between 5,000 and 10,000 jobs at Lake Tahoe,” Parson said. “If you take our demographic base, that’s pretty much everybody in the industry; restaurants, ski areas, lodging, retail, everybody’s lost their job. Nationally, a lot of people can shift to a home job. But that’s not the case up here. Up here, almost everybody is tied to the tourism business.”
Up until Newsom’s orders to stay home, some folks seemed to still be willing to pay for Tahoe’s beauty during the outbreak. Parson said Granlibakken was seeing a high demand of people looking for things to do, for example. Now, however, sledding and all winter operations are closed, though the cross country trails remain open and free for public use.
People should and are taking the opportunity to spend time outdoors, remarked Parson, citing a recent grooming trip he took before the shelter-in-place directive: “There must’ve been 15 snowmobiles and there were at least 50 people out with dogs, snowshoeing, cross-country skiing, backcountry skiing … That follows the CDC,” he said “ … just don’t do it in a [crowd].”
It’s not just here in Tahoe/Truckee. Across the state and country the great outdoors is a beacon to escape shelter-in-place orders, which is leading to huge crowds and worried officials. In the Bay Area, parks and beaches are being closed. New Jersey Gov. Phil Murphy told second homeowners on Saturday not to ride out the pandemic at their summer houses on the Jersey Shore.
No lifts? Tahoe goes backcountry
The crowds are now gone from the ski resorts, and Squaw Valley Alpine Meadows public relations specialist Alex Spychalsky told Moonshine her team is on the same page as their resort association, willing to sacrifice business now to gain long-term benefits.
“With the cancellation of highly anticipated events and the closure of the ski resort during what is traditionally a peak visitation time, we obviously expect to feel the economic impacts of these decisions on our business,” Spychalsky wrote in an email. “However, in these unprecedented times, the health and safety of our mountain community comes first. We are focused on doing our part to help slow the spread of the coronavirus, which at this time includes following health officials’ guidelines and closing Squaw Valley Alpine Meadows.”
The closure of the resorts has meant an influx of users into the backcountry, said Steve Reynaud, an avalanche forecaster with the Sierra Avalanche Center and owner of Tahoe Mountain School, a backcountry education business.
“Really, some of the numbers are very large, similar to some of the busier holiday weekends,” he said. “Now we’re seeing those numbers on a daily basis.”
Many of those recreating are local would-be ski resort passholders, but others, Reynaud noted, seem to be beginner backcountry folks. He’s also noticed the local ski shops, too, are (or were, pre-nonessentials shutdown) seeing an uptick in business from interested parties buying backcountry equipment.
“People have been buying pretty much everything,” Reynaud continued. “… and we’ve seen a lot of that being in the backcountry, the type of users who seem a little bit unfamiliar with backcountry protocol. Unfortunately, at the same time, a lot of the guiding companies and services have been forced to shut down where people would probably like to take avalanche courses or get a guide.”
The Sierra Avalanche Center isn’t interested in taking a position on banning visitors and backcountry newbies, but Reynaud did stress the importance of not straining local medical resources. “If you go out, be prepared to handle things with your own group,” he said. “We would like to push that everybody should hopefully use the avalanche forecast on a daily basis, no matter if they’re snowshoeing or backcountry skiing or cross-country skiing … definitely use the product.”
STRs not playing nice
While game-planning the short-term sacrifice of halting tourism momentarily, Hentz discovered a new nemesis late Friday: short-term rental platforms.
Noting that North Shore’s residences comprise between 60% and 70% vacation homes, Hentz lamented “these AirBnBs and VRBOs that are pushing people to shelter in place in Lake Tahoe — ‘Leave your home’ — I can’t believe I’m reading this stuff,” he said. He identified between 400 and 500 posts active per site, some offering discounts, others marketing the area’s beauty and fresh snow as a place to hunker down during the health crisis.
Hentz and many others in the region feel that marketing to “shelter in place” in a Tahoe/Truckee vacation home will strain the seams of an already-stretched medical and housing infrastructure. Plus, the executive order specifies staying in your “place of residence.”
Saying he decided he could make the biggest impact at the top, and not seeing formal discouragement of travel on any of the sites he monitors, Hentz “started sending out emails to [the platforms], saying, ‘Stop what you’re doing. Do you realize what you’re doing to our community and the risk you’re putting everybody at?’”
In fact, after what Hentz described as the last “10 days of chaos” for the NLTRA in immediate crisis relief efforts, at the time of his interview Saturday morning he was in the middle of reaching out to executives at Airbnb, VRBO, and Home Away.
“It’s always been said that companies like Airbnb and VRBO, they’re not good local community partners even though they’re trying to. Well, to me, this is where the rubber hits the road. Are you, or not?” Hentz said.
Placer County sent out a formal request to STR owners over the weekend encouraging them to abide by Newsom’s stay-at-home order.
As of publishing deadline, both Home Away and VRBO’s home pages displayed a warning for travel during the coronavirus pandemic, while Airbnb mentioned the virus to update users on a new refund policy applied to stays with a check-in date of April 14 or earlier (they they note it does not apply to new reservations).
Yet a quick search confirmed that there are still hundreds of listings in the area being actively marketed, many of which show recent discounts or specific language about staying during the pandemic. A pop-up on search for a North Lake Tahoe vacation home for this upcoming weekend on Home Away states: “Lake Tahoe is popular! Only 53% of properties are left for your dates.”
A petition is circling in eastern Placer County requesting the board of supervisors issue a ban on short-term rentals, stating in part: “Given that STRs are already heavily regulated by Placer County via the new STR ordinance, we are asking the Placer County Board of Supervisors to use its regulatory power to issue and enforce (through fines, and other means) a temporary ban on STRs in North Lake Tahoe/eastern Placer County at least as long as the California shelter-in-place executive order is in place.”
As of deadline, the petition has over 1,500 signatures.
Swift and sweeping
Hentz, who says he follows national and global business news “religiously,” predicted some of the fallout we’re seeing based on source markets like China that have already been devastatingly affected by the coronavirus pandemic. He told Moonshine he’s been speaking internally with his team for weeks about the pandemic’s potential impact on North Lake Tahoe’s economy, though he didn’t think the effects would be this swift or sweeping.
“I think it actually started waking me up in the middle of the night … [about] three weeks ago,” Hentz said. And as the conversations escalated alongside the seriousness of the health crisis, Hentz began to realize how big the impact could truly be, considering possible travel restriction timelines in a travel-based economy. “Wait, it’s spread by travel,” Hentz remembered thinking. “That’s our game.”
Having spent the three years prior to his recent move to Tahoe leading Mustang Island in Texas out of the devastating economic impact of a Category 4 hurricane, Hentz has worked to elevate a tourism-based economy out of an unexpected and out-of-local-control downturn before. He said that was the amount of time it took to gain back about 80% of the tourism industry there, noting that while the last thing he expected when resigning from his position in Texas to move to Tahoe and work for the NLTRA was another emergency relief situation, he said he is grateful to “have the experience and the history to say, ‘okay, I can deal with this.’”
Losing winter season tourism is also a big deal in Truckee, Dalton, director of the chamber’s tourism and economic programs, pointed out, meaning they don’t take the preventative measure of warning away tourists lightly. A visitor economic impact report completed fall 2019 by Dean Runyan Associates cited Truckee’s reliance upon visitors in 2018 with a 5.2% growth in travel spending and a 3.5% growth in employment, both up from 2017. This meant $5.6 million in local tax revenue associated with travel spending during 2018 (up from $5.2 million in 2017). Visit Truckee looked into a more recent scenario of a drop in tourism and how that might affect the Transient Occupancy Tax and sales tax. That report, which was compiled pre-coronavirus, she said, will likely be published this week.
Dalton said it’s difficult to define an actual number of visitors to the region, especially since both Visit Truckee’s request to stay away and Newsom’s order, but she did mention she’s received only positive feedback on the decision to discourage visitors to the area.
She furthered that her team is still dealing with the orders as they come in, though plans are in place to begin establishing a tourism recovery task force.
“As soon as things settle down a little bit and we all adjust to the new reality, we’ll pull together a content creation team to make sure we’re still front of mind from afar,” Dalton explained. “… You want to stay front of mind constantly. We’ll be working as a team on content creation and creative ways to keep visitors from afar engaged with our brand.”
Visit California CEO Caroline Beteta reinforced Hentz’s assertion that the COVID-19 health emergency will have “horrific” impacts on the local economy in a conference call with North Lake Tahoe stakeholders last week, saying she recognizes the grave danger the coronavirus puts businesses in — particularly those which are tourism-reliant. As things stand, Beteta said her team is “currently targeting July through September in hopes of being able to launch and generate travel during that period.”
The targeted audience for that time, she continued, will be Californians themselves — a demographic Visit California hasn’t specifically addressed since 9/11. By focusing advertising and marketing in-state, Beteta said she sees “an opportunity to inject and fuel economies.”
In the meantime, all of the NLTRA’s marketing is centered around the following, said Hentz: “Hey Tahoe nation! This is not the time to travel here. Stay home, be safe. Let our community’s locals, our owners of our restaurants, our employees, let them be safe for when we’re ready to go and we’re all clear. We’re ready to welcome you all back here in open arms, but give us our space. We need space. It’s us time.”
Main Image Caption: EMPTY SLOPES: Squaw Valley’s KT-22 chairlift stands stationary. The resort closed its doors to the public on March 15 due to concerns about crowds during the spread of the coronavirus. Photo courtesy Kelsen Thompson