Tahoe lodging sees big decline: Gas prices impact economy
September 8, 2005
With indications Tahoe’s lodging numbers were down for the summer – combined with increasing pressure of high gas prices and Indian gaming – South Shore tourism officials said Thursday that Hurricane Katrina will not be any help for the region’s economy.
“When oil prices rise, there’s always typically a reaction in terms of numbers of people,” said Carl Ribaudo of Strategic Marketing Group, which tracks Tahoe’s economic numbers.
“I don’t think it’s going to be dramatic, but it’s definitely something noteworthy. It’s something to watch over the next coming weeks.”
The North Lake Tahoe Resort Association reported Thursday a 42 percent decrease from last summer in room night revenue for the 44 properties they serve.
The association, which tracks the Lake Tahoe Visitors Authority central reservations phone line, said call volume was down 37 percent in July.
Those numbers are only a small indication of the big picture. Tourism officials are anxiously awaiting for Transient Occupancy Tax numbers for the summer, which is provided by South Lake Tahoe city officials. Those numbers will show exactly how this summer compared to last.
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Patrick Kaler, executive director of the Lake Tahoe Visitors Authority, disputed the significance of the reservations decrease, but said gas prices are definitely having an effect on the economy.
He cited the recent cancellation of an ice hockey tournament at the city’s recreation complex. The 12 teams slated to participate said traveling costs would be too high. The city lost the business of at least 200 people, he said.
Most of the drop in reservations can be attributed to a $750,000 decrease in marketing dollars from South Lake Tahoe, said Duane Wallace, executive director of the city’s chamber of commerce.
Marketing studies have shown that for every $1 spent on marketing, cities receive $12 back in tax revenue, he said. Indian gaming, school starting early and gas prices are increasing pressure on South Tahoe’s economy, he said.
“The little factors add up,” said Wallace. “There are some (lodging properties) doing well, and usually those are the ones that have reinvested in themselves or reinvented themselves.”
Still, some are optimistic about the upcoming shoulder season.
“There’s not a dramatic drop-off here in the fall. September has stayed strong and remains that way this year,” North Lake Tahoe Resort Association spokesman Andy Chapman said.
Chapman predicted the gas crunch won’t hinder as much tourism travel as many think.
Sean Comey of AAA, who serves on California Attorney General’s task force on fuel prices, said he hopes “the news is as bad as it’s going to get” despite the notion people will cut back on vacation time.
“We’ve seen in times of record high prices there are more changes than cancellations,” he said.
Chris Crystal, spokeswoman for the Nevada Commission on Tourism, agreed, adding the traveling market may experience a hiccup or blip but “over the long haul tourism increases.”
– Tribune staff writer Susan Wood contributed to this report