We estimate the impact of the Caldor Fire using the Lake Tahoe Tourism Impact Model™ (TIM). Our analysis is conducted at the community level. These sub-models are combined to show total impacts of the fire from a regional tourism perspective. Previous estimates of the fire’s economic impacts to Tahoe’s tourism-dependent economy are scarce. According to CalMatters, “California has an incomplete understanding of how much wildfires cost the state each year.”
We estimate the total economic impact to the broader Tahoe region’s tourism economy exceeded $268 million, which is the amount of direct visitor spending that did not occur. If multiplier impacts were added, the total impact would likely reach the $400 million.

Source: Lake Tahoe Tourism Impact Model.
Fire background
The Caldor Fire started on August 14, 2021 and was contained more than two months later on October 21st. The Fire burned 221,835 acres in El Dorado, Amador, and Alpine Counties. Impacts include the destruction of personal property, ecological degradation, poor public health conditions, and reduced economic activity.

Source: By NASA/Lauren Dauphin.
Lake Tahoe Tourism Impact Model
The TIM first estimates visitors and visitor days by visitor type and month from monthly lodging tax receipts, tax rates, room inventories, and various survey data showing commercial occupancies, room rates, vacation rental (VHR) usage, friends/family and vacation home visitation, and day visitation.
The TIM extrapolates spending at the visitor day level. Daily visitor yields provide an additional reference check on the accuracy of the results. The TIM offers the flexibility to analyze fire and other impacts using a variety of approaches. The results presented in this article demonstrate one approach by considering the average 2019 and 2022 the baseline.
Impacts by Month
For those in the Tahoe Basin who suffered significant losses, the impacts continue. For the overall regional economy, visitor spending returned to previous and anticipated levels by November. The most significant impacts occurred in September as illustrated below.

Source: Lake Tahoe Tourism Impact Model.
Impacts by Select Sectors
The total loss of direct visitor spending in the restaurant sector was over $64 million over the three-month period. Shopping lost $37 million and lodging lost $32 million.

Source: Lake Tahoe Tourism Impact Model.
Geographic Distribution of Impacts
The losses were greatest in the City of South Lake Tahoe, exceeding $100 million. For the South Shore overall, losses reached $169 million or 63 percent of the total.

Source: Lake Tahoe Tourism Impact Model.
As a share of local tourism activity, the City of South Lake Tahoe also experienced the greatest impact losing 34 percent of spending. In Washoe County, the loss was relatively low compared to other communities, at $24 million, but this was 21 percent of activity.

Source: Lake Tahoe Tourism Impact Model.
Impact by Type of Lodging
Traditional commercial lodging properties such as hotels, motels, and B&Bs and the associated spending from this sector, incurred a disproportionate share of the impacts compared to casino lodging and vacation home rentals (VHR). In fact, the 30 percent loss to the commercial lodging sector was twice the share incurred by the VHR sector.

Source: Lake Tahoe Tourism Impact Model.
Insurance Industry Reacts
Recent news headlines underscore the severity of wildfire risk and costs. Allstate and State Farm are no longer accepting new property insurance applications in California. According to the Wall Street Journal, “other property and casualty insurers, including AIG and Chubb, have also been shrinking their California footprint after years of catastrophic wildfires, which are becoming more common owing to drought and decades of poor forest management.”
Conclusion
Evacuations, smoke, poor air quality, and the threat of fire reduced visitor spending across the Tahoe Basin. TIM results show the impacts are unevenly distributed across time and space. While the City of South Lake Tahoe was directly threatened by the fire and incurred the most significant impacts, the entire Basin was impacted by a “Halo Effect” of cancelations resulting from smoke and poor air quality. The results presented in this article show only direct visitor spending, however employment, tax revenue, and other impacts are easily extrapolated from TIM results using economic impact models such as IMPLAN.
A study commissioned by the Sierra Nevada Conservancy offers a number of strategies DMOs should consider for managing and mitigating wildfire impacts. As Robert Wilson writes in The Hill, “when it comes to wildfires, we’re all Westerners now”.