Air service leads to drop in domestic ski visits at Tahoe
October 27, 2014
TAHOE CITY, Calif. — Domestic travel to Lake Tahoe's ski resorts has fallen by 40 percent since 2005 — and the problem isn't the snow drought.
Even as resort operators get things spruced up for the start of another season, they're not expecting the last decade's sharp decline in business to turn around any time soon.
"It took us a while to get to 40 percent down. It will take us a while to get back up," says Andy Wirth, president and chief executive officer of Squaw Valley Holdings.
A key element of the recovery, Wirth told business leaders from the North Lake Tahoe region a few days ago, will be improvement of passenger service to Reno-Tahoe International Airport.
“Our competitors are eating off our lunch tray.”
CEO, Squaw Valley Ski Holdings
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Separately, a researcher at San Francisco State University estimates in a new study that each 2-5 percent increase in the total number of ski visitors adds $10 million to the Tahoe-area economy.
The 40 percent decline in domestic visitors to Lake Tahoe — a figure that strips out the drive markets of Reno and the San Francisco Bay area — was calculated by RRC Associates, a Boulder, Colo., firm that Tahoe ski areas trust to assemble their proprietary data into a market-wide overview.
Wirth noted that the 40 percent decline at Lake Tahoe compares to a 4 percent decline at other Western ski resorts in the same period.
"Our competitors are eating off our lunch tray," the Squaw Valley executive said.
Lake Tahoe's decline, he said, has been largely independent of snow conditions.
"Ski areas are not all about snow," Wirth said. "It is substantially broader than that."
The effects of decline in Tahoe's ski business spread broadly, too.
An analysis by Patrick Tierney, a researcher in the Department of Recreation, Parks and Tourism at San Francisco State University, estimates that domestic ski visitors spent an average of $252 a person each day they were at Lake Tahoe during the 2013-2014 season.
Given an average stay of four days and five nights, that means a family of four from outside the area is spending more than $4,000 on a Tahoe ski trip.
While ski passes, lessons and equipment rentals account for much of that spending, Tierney estimated that nearly a quarter of the dollars spent by all ski visitors — including those from nearby Reno and Bay Area locations — are spent on food and beverages. Lodging accounts for more than 17 percent, and other retail purchases accounted for more than 15 percent.
He estimated the total economic impact of the ski resorts at $564.5 million. That includes the ripple effect of spending by 3,330 fulltime and 4,947 part-time employees of the resorts.
Ski Lake Tahoe, an industry association, has looked at stepped-up marketing efforts that would target Bay Area, domestic and international ski areas.
If those efforts moved the needle by 2 percent, Tierney said, total spending by visitors would increased by more than $11 million a year. A 5 percent improvement would add $23 million in spending.
Along with stepped-up marketing efforts, Tahoe ski operators are putting energy — and cash — into improved air service at Reno-Tahoe International Airport.
The number of daily departures from the airport has declined by 32 percent since 2005 — 61 departures daily today compared with 90 then. For skiers who begin to lose interest in a destination once they face more than four hours of air travel, that's a hard blow, Wirth said.
Brian Kulpin, vice president of marketing and public affairs at the airport, said development of direct service from big-city markets remains a priority.
"We have a gap in the East, and we're working very hard to fill it," Kulpin said.
The ski industry has joined forces with casino operators and tourism agencies in northern Nevada to begin offering subsidies to air carriers that bring new service to the region. Those subsidies range from marketing assistance to financial guarantees in case a carrier doesn't attract the number of passengers it expected.
Those subsidies, Kulpin said, also may come into play to protect important existing service.
Wirth, who also serves as vice chairman of the Reno-Tahoe Airport Authority board of directors, said development of better air service between Reno and New York, Minneapolis and Atlanta is the priority of ski operators.