In a normal year, Tahoe’s tourism trends could be compared to an ever-flowing hose: water on full blast in summer and winter, then a more steady-but-admirable trickle during the “shoulder” seasons. COVID-19 turned off that hose almost entirely.
After more than two months following the stay-at-home order though, California Gov. Gavin Newsom is beginning to twist back on the possibility for tourism, allowing restaurants and retail to reopen their doors (in a safe manner), and counties are lunging for the go-ahead. Drop-by-drop, visitor-by-nature-starved visitor, a resurgence of the tourism tap of Tahoe is on the horizon.
“We’re starting to see the signs that it’s coming,” said Jeff Hentz, CEO of the North Lake Tahoe Resort Association. “It’s not coming all at once, which is heavily important because I don’t think any destination is ready to go from zero to 60 miles per hour. No matter who you are, it’s going to take a gradual buildup. That’s why we’re shifting now back into a reopening mode.”
This past holiday weekend allowed a sampling of that mode. Town of Truckee Police Chief Robert Leftwich said Memorial Day crowds yielded a “much more normal call volume than what we had been experiencing during the pandemic,” considering that the police department’s overall calls for service have been down since March.
“Outside of concern around social distancing and recreational travel still not being allowed, but obviously still occurring in very high percentages, there were no significant events [over the weekend] that required a law enforcement response,” Leftwich said. Neither Truckee police, NLTRA, nor California Highway Patrol collected any hard numbers about an influx of visitors to the region over the holiday, though CHP public information officer Pete Mann said they indeed saw an uptick in enforcement.
“But that was solely based on the fact that we were in a maximum enforcement period and every available officer was out and working,” Mann wrote in an email. “As for personal observations of living in Truckee, it was absolutely more crowded out there and around the area.”
As the economy is structured now, the region definitely needs a return to tourism. The success of Tahoe’s economy is heavily fueled by visitors, something Hentz referred to as a “handicap,” made ever more apparent during the coronavirus crisis.
Could the region’s economy even thrive without such a heavy tourism component? Placer County District 5 Supervisor Cindy Gustafson says maybe. “We need other industries, more of a balance,” she told Moonshine, citing the possibility of beefing up the remote working scene as one way the economy could shift from being reliant on visitor flow. Though Gustafson described the adaptability and resiliency of Tahoe’s economy, the current reality is that business is extremely dependent upon day-trippers and weekend warriors who aren’t supposed to be here right now.
“We don’t have a local population base around us that’s big enough to support our business community,” echoed Hentz. “If we didn’t have tourism and [just] the few thousands of folks that live in our community, it would be enough to support maybe five businesses, five restaurants, and a gas station or two.”
Thus, the coronavirus’ effects on life as we know it has yielded a dramatic drop in revenue not only regionally, but statewide. In its Tourism Economics 2020 California Forecast, released April 24, Visit California predicted a 50% decline in travel spending for 2020, from $144.9 billion in 2019 to a projected $72.8 billion in 2020.
The North Tahoe area sees visitors spending between $800 million and $900 million annually in a typical year, Hentz said. Rather than the full 50% drop, the NLTRA is estimating a 20% to 30% of that amount being lost. Call it an optimistic outlook: He explained that the two to three months already lost are not Tahoe’s busiest season. “IF we would lose the full summer (June through September),” he wrote in an email, “the potential visitor spend losses would be higher.”
Colleen Dalton, director of tourism and economic programs with the Truckee Chamber of Commerce, said her team is using the 50% projection as a baseline to forecast Truckee’s immediate future.
Looking at 2018 as a comparison, Dalton explained, visitor spending in Truckee amounted to $149 million, supported 1,460 jobs, and contributed $5.6 million in tax revenue. The 2020 version of those numbers, when based on the 50% year-over-year decline, may equate to approximately $75 million in visitor spending; 730 jobs at the lowest point (May); and potentially a $2.8 million drop in town tax collections (Transient Occupancy Tax and sales tax) and tourism marketing (Truckee Tourism Business Improvement District) fees.
“Truckee’s gross lodging revenue … is most likely to suffer the greatest loss of all Truckee economic sectors while hopes of opening in stage three [of Newsom’s reopening plan] may not be realized until late May, June, or July, while Reno hotels are open or opening imminently,” wrote Dalton in an email.
Ah, yes. The lodging.
As retail and restaurants are slowly ramping up again, lodging serves as the critical last piece of Tahoe’s tourist allure.
“Let’s say two weeks from now all of our retail is back, full staff or whatever, staff in restaurants,” Hentz said. “Without our lodging open, we’re really not a complete, whole destination, and that’s going to really minimize any type of traffic over here beyond a day drive.”
When that lodging piece is in place alongside appropriate health and safety guidelines, freedom bells may still be ringing only softly. Business owners, community members, and visitors alike will need to be vigilant and transparent with safety protocols to avoid future infection and spread.
The NLTRA’s focus, Hentz says, “is to make sure that those businesses that are opening have all the right communication, the right tools, the right information, the right protocols because we have to have them open successfully. We’ve got to sustain that so we don’t go back and reverse our progress.”
This compliance is based on a system of honor, said Alex Mourelatos, general manager of the Mourelatos Lakeshore Resort in Tahoe Vista. There won’t be any entity handing out gold stars or F-minuses — rule-abiding needs to be maintained and monitored on a daily, even hourly, basis by the very businesses implementing them.
“If a restaurant is lax, if an owner or a bartender doesn’t remind people to maintain social distancing, then that business owner carries the weight of the full community,” he explained. Ultimately, Mourelatos holds each business accountable to the safety of their customers, and if they don’t, he says, “they have just screwed everybody else in this community. I’m not going to be that guy.”
Bud Haley, owner of Jax at the Tracks in Truckee, likely won’t be that guy either. The two months of takeout orders, he said, allowed staff to “re-do the entire interior of Jax” — new booths, sanitizer from Old Trestle Distillery, and touchless menus.
Jax is now open for dine-in, and Haley said people have responded extremely positively, both to the establishment’s sanitization efforts and just to be out and about.
“We also were quite surprised at the level of customers in business compared to last year,” he continued. “We had really nice weather. Maybe it’s a happy coincidence or a bounce, but our numbers in terms of sales were very comparable to the year prior. It was quite surprising.”
A second wave of the coronavirus is quite likely, experts say, and with a better understanding of what the current pandemic has yielded, round two could be even more debilitating — what with further financial hits and extended job loss. The secret sauce for success isn’t pretending round two won’t happen, said Hentz; instead, it’s keeping the possibility in mind and implementing an effective and healthy approach as an entire community.
“If … we can get other communities to work together and follow each other, maybe we can avoid that potential catastrophe [of a second wave],” he continued. “Because if it does happen again, and we’re told to go back to what we’ve just gone through, that would just be catastrophic in so many ways for our business community, let alone any business community throughout the country.”
There’s a third ball in the air to juggle in addition to statewide mandates and the region’s need for dollars: Many people are over being stuck at home and having their businesses closed. Mourelatos told Moonshine he sees June 1 as the day many folks have in their mind as when lodging will reopen and Tahoe becomes the ideal escape destination. With that in mind, even as a prediction, Mourelatos plans to be ready.
“There’s been too much cost associated with compliance that it will overboil, it will overflow, and it’s going to overflow on multiple points,” he furthered. “That’s where I start being a pragmatist. I’m not going to allow that to happen to me and my business. I am going to be prepared.”
Mourelatos’ boy scout motto will be useful regardless of whether the June 1 dream is real or not — to Hentz, at least. He believes Tahoe will be one of the earlier rebounding destinations once the necessary mandates are relaxed.
“The community we have here understands it, they know how important tourism is — it’s our cash crop and it’s a priority and we’ll come through this with great results,” Hentz said, while cautioning unfettered optimism, making it clear that he’s “talking into 2021 or beyond” for a full recovery.
“But until that, we’re going to have to struggle, we’re going to have to work hard to be smart in getting people here to support our businesses,” he continued. “At the same time, never lose sight that safety and public health, those guidelines and protocols have to be part of everything we do to ensure that we don’t go back or risk a problem.”