Opinion: Passing Go

When I was growing up my friends and I would play Monopoly. I always sweated as I had to avoid landing on Park Place or Boardwalk. If lucky, I could pass Go and collect $200. That game taught us about the trials and tribulations and realities of business.

When I went into business myself at age 21 as a restaurant owner in Tahoe, I lived the Monopoly game in the real world. We opened Happy Steak on January 5, 1975, in the middle of a big snowstorm. I stood there with my shiny new spatula all day with only loyal family and friends coming in. No locals or tourists could see us over the giant snow berms similar to those we have now and we still needed to convince the locals that we were worth giving us a try. I worked 8 a.m. to 10 p.m. 7 days a week for the next six months losing money every day until summer arrived just before the end of my dwindling personal savings. I felt like an Oriental Avenue income in a Boardwalk rent world.

Then summer arrived and so did the tourists. I had to hire more employees and train them quickly in order to now handle what we later called "passing Go."

We eventually built a solid customer base of loyal locals over the next 16 years in Tahoe and 10 years in our next restaurant in Carson City. But our local customers also relied on the tourists either directly or indirectly no matter what profession they were in. Even those businesses that catered mostly to locals could not thrive if their customers didn't have the wages and tips that they themselves received from the tourists. We all benefitted by passing go. Tourism has ebbed and flowed over the years due to weather or economic conditions such as road closures, droughts, fires, pandemics, the advent of Indian gaming, high gas and food prices, and heavy snow years This year we have a crippled economy, and high gas and food prices layered on top. After all, is said and done, we are tourism farmers, dependent on the weather. And the weather can be a dampener on tourism all by itself. The weather doesn't need any help in slowing down our economy. Just this year the snow came in amounts that actually closed down the ski resorts for a while and the weather reports caused many reservation cancelations.

We have been told in articles and by supposed experts that we are experiencing "over-tourism." Yet the actual facts and numbers show that tourism has been dropping since 2015. During the pandemic, Tahoe wasn't over-touristed we were over-congregated. The beaches were closed, the major attractions were closed, and we were afraid to get near each other. People in the Bay Area who owned second homes here fled from Covid and rising crime to their Tahoe homes especially because they could work from home. But, the actual numbers tell a different story than what we were being told.

If we look at the five largest Stateline, Nevada hotel and gaming properties’ annual occupancy rates in 1990, the reports from the Nevada Gaming Control Board show the annualized hotel occupancy rate was 82 percent. Fast forward to 2022 as the past 10-plus years, the annual casino hotel occupancy is running a dismal 65.9 percent to 67 percent.  Annual hotel/motel occupancy in the city of South Lake Tahoe has been dismal economically as well, running at or below 50 percent annually for the past 10 years, drastically lower than long-term historical numbers. A hotel/casino or motel lodging property does not yield well to be healthy until its annual occupancy reaches around 80 percent.

We keep hearing about the dreaded “Day Tripper,” a person or family who drives their car into the Lake Tahoe basin just to poach the resources and then spends ZERO money at the Lake. The Shops at Heavenly Village in the Lake Tahoe Basin are the #1 destination with more visitors annually than anywhere else. Approximately 35 percent of the traffic and business is derived from day trip visitors. The Nevada Department of Transportation’s Automatic Traffic Recorder at US50 (located at the Stateline Casino core) gives the verified hard data of traffic counts. In 2002 approximately 35,000 average vehicles per day passed by Heavenly Village on US50.  In 2021, only 25,600 vehicles per day passed by Heavenly Village, a 27 percent decrease of 9,400 fewer vehicles per day! In fact, between 2011 and 2021 the average annual cars per day on US50 at Stateline was around 26,500 cars per day. There is no dramatic increase or over-tourism in vehicle traffic counts, which is actually down 20 percent from the highs in the 1980s. 

Data collected by the Nevada Gaming Control Board (NGCB) shows the Stateline casino/hotels employed nearly 11,000 employees in 1990 which fell off in the year 2000 to 6,400 employees and in 2022 an extreme decline to just 2,100 employees. The loss of these employees moving away further hurts our local economy. Less business means fewer employees and as a result, we have fewer schoolchildren thus fewer teachers and their families. The NGCB reports show that in 1990 total annual revenues were over $564 million compared to just $361 million in 2023 a decline of $203 million or 36 percent! This declining trend in the Stateline gaming industry has been declining for years. The expansion of Native American gaming in California may be the main reason, but regardless the end result is less tourism.

So are we really seeing over-tourism now?  Or are these claims coming from feelings and emotions brought on by the pandemic and or the agendas of many environmental agencies who have somehow altered the tourism marketing organization's mandate of marketing South Lake Tahoe?  

The real data shows a trend of less tourism in the South Lake Tahoe/Stateline region.  Further, stats show business is off 30 percent to 40 percent in areas by the "Y" on SR89, and 30 percent to 40 percent vacancy rates in commercial properties throughout town. Even the annual sewer flow charts for the past five years, show fewer people were in town. This equates to fewer jobs for bartenders, baristas, bussers, etc. Some might say that we should stick it to the large companies because since they are large, they must be evil with their evil corporate profits. I've often found it disingenuous that those saying such things often have their own retirement funds invested in large corporations because they make profits that grow their retirement.

So what should be the response? Should we be trying to levy the max tax on our businesses? Should we be adding insult to injury for those hearty souls who have managed to hang in there during hard times? Or, should we be looking for ways to work together to support the businesses that support the employees who we also support?

There is an old saying that "a rising tide raises all the boats." We are all afloat in this Tahoe economy. Shouldn't we all support ALL the local businesses that support us? After all, is said and done, when those who protest and say tourists go home, they are actually taking food off the table of their own friends and neighbors, or maybe even their own. After all, the government does not create wealth. It exists as a result of reasonable taxes on businesses for the benefit of our citizens and by allowing those citizens and the businesses they own and work for to prosper.

Duane Wallace, CEO, ACE
South Tahoe Chamber of Commerce