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Economic Data

Introduction

While the Tahoe Basin will continue to be a visitor destination due to its many natural assets, it is clear that a broader strategy is needed to achieve economic diversification and income growth. The Prosperity Plan identified Health and Wellness and Environmental innovation as two economic clusters that could propel growth of professional, living wage jobs. We have not seen growth in these economic clusters so we must explore additional areas where we can expand the employer base and increase payrolls and earning potential in the Basin.

Tahoe Total Ecoomy
$5.1 billion

Within the clusters, recreation has emerged ahead of gaming as the second most important component of the Visitor Services Cluster. Non-gaming lodging and food services remains the highest employment sector in this cluster, but also lost the highest number of jobs between 2007 and 2015.

The job losses in Environmental Innovation were mainly driven by construction sector declines fueled by the recession. Construction and building design services account for three-quarters of the jobs in this cluster. Environmental restoration services had some job growth during this period, but if construction were separated from this cluster, the remaining business activities would represent a very small share of regional employment.

Notes:

  • Housing cost based on 30 yr mortgage at 3.5% APR, 10% down payment, plus 1.5% for taxes/insurance.Housing costs equal 30% of qualifying income.
  • Income based on US Census ACS 5-Year 2011-2015 Sample Tables B19001 and B25095
  • Source: ADE, Inc., based on data in Tables A-28-A29 and A- 26.2 

Gaming Revenue
Percentage Change

To some extent the loss in tourism in the region may be related to a similar steady decline in gaming revenue, which also peaked in 2000 and then suffered a 9.4 percent reduction in 2008, followed by a 25.8 percent decline in 2009. This downward trend is much steeper and more prolonged than what the gaming industry in Nevada as a whole has experienced. Nevada had seen significant annual increases in revenue until 2006 while Tahoe was already declining. During the recession, statewide gaming revenues dropped about 22 percent, but then have settled at a new normal at 80% of the level it had achieved back in 2004. Tahoe, with a modest uptick in 2016, is only at 50 percent of its 2004 level. The Tahoe casinos have seen significant competition from increased Indian casinos in California and also from newer properties and more contemporary offerings and amenities in Las Vegas. Local casino owners report that they are continuing to invest in their properties to create the best market attraction possible. This also highlights the need to develop other kinds of recreation and entertainment attractions to restore overall visitor levels in the Tahoe Basin. Casino owners have been collaborating with other industry stakeholders on efforts to develop new entertainment venues in particular.

Notes:

  • Housing cost based on 30 yr mortgage at 3.5% APR, 10% down payment, plus 1.5% for taxes/insurance.Housing costs equal 30% of qualifying income.
  • Income based on US Census ACS 5-Year 2011-2015 Sample Tables B19001 and B25095
  • Source: ADE, Inc., based on data in Tables A-28-A29 and A- 26.2 

Tahoe Skier-Days
2008-09 to 2015-16 (million)

Coming out of the recession, recreation had begun to rebound, led by the ski areas, but the continued drought had an effect in 2014 and 2015 on jobs. The number of skier-days peaked in 2009- 2010 and then dropped significantly in 2011-12 and again in 2013-14 and 2014-15, despite a slight reprieve in 2012-13. The 2015-16 season showed a rebound and projections for the current year are that will also exceed 4 million skier days. A number of the ski areas are repositioning themselves as year round recreation attractions and have invested in new facilities to support that direction.

Source: Data for the 2008-2014 provided by Bob Roberts and more recent data provided by Michael Reitzell, President, California Ski Industry Assn. Includes the following ski areas: North Lake Tahoe, Alpone Meadows, Boreal/Soda Springs, Diamond Peak, Mt. Rose, Northstar, Ski Homewood, Squaw Valley, Sugar Bowl, Tahoe Donner. South Lake Tahoe: Heavenly, Kirkwood, Sierra-at-Tahoe 

Annual Transient Occupancy
Taxes – Million

Looking at quarterly hotel revenue data for the Stateline/Zephyr Cove area, winter hotel revenues (Q3) reached average levels in 2013-2014 and 2014-2015 and exceeded average levels substantially in 2015-2016. In South Lake Tahoe hotel revenues were below average in 2013-2014 but then met the average in 2014-2015 and exceeded it by 46 percent in 2015-2016. In the North Shore areas, the performance has not been as positive until recently. Third quarter hotel revenues were above average in 2012-2013 but then remained below average in the two years after that. However, Q3 hotel revenues in 15-16 significantly exceeded the long-term average. These data generally reinforce the jobs trends discussed earlier. Winter job losses have been much heavier in the north than in the south. It is also likely there has been some lag in rehiring at the hotels despite the fact that revenues have shown some improvement over the past couple years. Summer hotel revenues (Q1) have been above average for the past three years in nearly all the areas, showing continued strong demand for summer recreation opportunities in the Tahoe Basin.

Source:

  • City of South Lake Tahoe
  • Applied Development Economics, based on five-year history TOT COLLECTIONS BY DISTRICT (2005-2006–2009-2010 and 2010-2011–2014-2015), from Jennifer Merchant, Assistant to Placer Co. CEO; Reno-Sparks Convention & Visators Authority, “Room Tax and Occupancy Statistics” (many months and years), from Robert Douglas RSCVA. Note: *Quarter One corresponds with July, August, and September
  • Tahoe Douglas Visitors Authority

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