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Slump has hurt Tahoe tourism industry

By Anna Tong
atong@sacbee.com Published: Thursday, Aug. 13, 2009 - 12:00 am | Page 1B

SOUTH LAKE TAHOE – At first glance, you wouldn't think the economy had even ruffled the serene waters of Lake Tahoe. On a recent weekday – even an oddly overcast August day when hail pelted the lake – hordes of families flitted in and out of the shops at Heavenly Mountain Resort. A crowd of tourists exited the Tahoe Queen cruise boat, fanning out onto the marina.

But despite appearances, Tahoe hasn't been immune to the tourism industry's turbulence, which has bumped U.S. travel spending down 12 percent through June this year, according to the U.S. Travel Association.

At Tahoe, tourists are coming, but staying for shorter trips. With an eye on every dollar, they're choosing fewer pricey entertainments and less expensive meals. While hotel bookings are down, campgrounds are teeming.

Tourism officials and local business owners say the recession has left a decided crimp in this summer's revenue. The hotel occupancy rate in South Lake Tahoe was 47.1 percent in June, down nearly 13 percent from June 2008, according to the Lake Tahoe Visitors Authority.

Even the Reno-Tahoe International Airport is seeing a decrease in visitors. Through June this year, the airport's passenger count was down 19.4 percent from 2008.

Lake Tahoe is simply reflecting the economy's struggles.

"People are waiting to see whether or not they have a job, then deciding whether or not to travel," said Tahoe tourism consultant Carl Ribaudo.

He and other tourism officials have also noticed a hike in "drive market" travelers – those who are vacationing at destinations within driving distance of home.

Take Bryan Backstrom of Riverside, who said his family typically takes summer vacations to Mexico or elsewhere. This year, it's Tahoe.

"We're trying to be thrifty on expenditures, so we vacationed a little bit closer to home this year," said Backstrom, patiently waiting for his wife to finish shopping at the Heavenly Mountain Resort's shopping village.

"We're definitely a value proposition for travel," said Carol Chaplin, director of the Lake Tahoe Visitors Authority on the south shore.

In 2006, overnight visitors spent an average of $108 per day on the south shore, compared with $233 per day in Napa, according to the respective tourism bureaus.

That may help explain why Tahoe's hotel occupancy rates are down less drastically than more expensive vacation destinations.

Another sign of the times: more last-minute hotel bookings.

At the Embassy Suites Lake Tahoe Hotel and Ski Resort, between 50 and 75 hotel rooms occupied on a Saturday night are booked that same day.

"It's highly unusual that we get that many room bookings that same day," said spokesman Bill Cottrill. He said visitors usually reserve hotel rooms more than three weeks in advance.

Unlike past summers, vacationers are coming up for shorter visits, usually opting to stay just one or two weekend nights, said Chaplin.

"The weekends are always busy, but the weeks have been much slower," said cafe employee Gosia Pogoda, who has spent several years working in the south shore marina area.

Fancy restaurants and pricey recreation seem to be hit the hardest.

Nepheles Restaurant, a small fine-dining institution in South Lake Tahoe, has had a rough summer.

"We'll have a great weekend, but then things will slow right back down," said owner Tim Halloran, who opened Nepheles 32 years ago. "We're seeing a less 'spendy' crowd," he said, noting that revenue is down 25 percent from last year.

Over at Tahoe Sport Fishing, employee Nathan Owen said the company's revenue is down about 25 percent this summer.

"There's just not as many people here, so businesses are getting shut down," he said. "The Fourth of July fireworks were even cut short this year."

To cope, businesses have been slashing prices, advertising deals and reinventing their products.

To enliven its cruises, the Tahoe Queen hired local actors to portray historical figures such as writer Mark Twain and Julia Bulette, a Virginia City prostitute.

Tom Turner, owner of three restaurants around the lake, said he's lowered prices by about 10 percent at Riva in South Lake Tahoe and Gar Woods on the north shore.

"People are ordering less expensive items, and we're not selling as much wine by the bottle," he said.

Even some wedding chapels report a slowdown. Chapel of the Bells, the oldest wedding chapel in Tahoe, has seen business decline 15 percent to 20 percent in the past two years, said its owner, the Rev. Robert McIntyre. McIntyre is offering several budget-friendly enticements, including a $25 "recession special" wedding photo session.

Not everyone's suffering. The recession has proved a boon to at least one Tahoe sector: campgrounds and RV parks.

Families have been saving money by camping instead of renting hotel rooms and keeping busy with free activities such as hiking, biking and river rafting, said Steve Teshara, who heads both the North Lake Tahoe Resort Association and the North Lake Tahoe Chamber of Commerce in Tahoe City.

At Zephyr Cove RV Park on the lake's Nevada side, every weekend's been full, with bookings up 20 percent from last year, said spokesman Austin Sass.

At South Lake Tahoe's KOA campground, weekend reservations have been maxed out since July 4.

"Business has been good," said manager Shawn Poulen.

 
 
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