Tahoe’s tourism industry hurting | SierraSun.com

Tahoe’s tourism industry hurting

Kyle Magin
Sun News Service

Editor’s note: This is the first in a three-part series on the local economy. The first in the series focuses on the local tourism economy and will be followed with stories on how local fundraising efforts are affected during tough times and on how retirees are coping with the dropping stock market.

The ailing American economy has already hit the North Shore’s tourism industry, said local business officials.

Don Cauley, owner of the Vacation Station, a local vacation home rental agency, estimated his profits are down 25 to 30 percent this fall.

Mark Pardue, General Manager of the Hyatt Regency Lake Tahoe in Incline Village said vacationers and business conventions are coming and spending less at the hotel, resort and casino.

Steve Teshara, the executive director of the North Lake Tahoe Chamber of Commerce, pointed to a report issued by the organization two weeks ago stating 93 percent of all business owners surveyed on the North Shore say the current economic situation has hurt business.

In the report, which is available on http://www.northlaketahoechamber.com, 46 percent of respondents say the economy has affected staffing levels.

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Pardue said that’s true of the Hyatt, though jobs weren’t cut, the Hotel brought in less staff than they generally do after the summer staff changed over this year.

“From my perspective this has had a deep and dramatic effect on the resort,” Pardue said. “We saw the first signs by spring of this year in relation to escalated oil prices which affected our drive market from the Bay Area.”

Respondents to the chamber survey agreed that gas prices are hurting business, with 49 percent saying gas prices have had a high effect on a downturn in business and 32 percent reporting a moderate effect.

Guests are also arriving later in the week, Pardue said, staying for a shorter duration and spending less money in the spa, restaurants and casino.

In the report issued by the Chamber, 41 percent of respondents said the current economic climate has significantly affected business.

“It’s affected people significantly, business owners are wondering if this is only a seasonal drop or if it lasts into winter, will (they) be able to hold out?,” Teshara said.

He said that an off-winter could cause closures of small business which provide services people view as non-necessary.

“I think with a good snow year most business can survive, but I think an additional number of businesses would close if we don’t get good snow,” Teshara said.

He said the local economy could be buoyed by ski tourists from the Bay Area who may typically take their business to the Rocky Mountain resorts but view the drive to Tahoe as cheaper.

Cauley, for his part, said the way people rent is changing with economic conditions.

“We’re seeing fewer bookings and people are booking shorter stays,” Cauley said.

“I’m seeing more of a trend toward downsizing, as well, people aren’t looking at the luxury properties like they have in the past and are looking more at the condominium market.”

While bookings for the holidays don’t pick up for a little while, Cauley said, early indications show they are down.

Pardue said he is also seeing more short-term bookings and is hoping that after the Nov. 4 presidential election vacationers will start to plan for trips to Tahoe over the holidays. Currently, bookings are on pace with where they were last year for the upcoming Thanksgiving holiday and down for the week between Christmas and Easter.

“Initially, we thought this drop would last through the second quarter of next year,” Pardue said. “But now, it’s looking like it may last all the way through next year and early into 2010.”

Teshara said he is counseling local business owners to visit with their financial advisors to formulate a plan for dealing with the economy.