The Lake Tahoe Truckee Lodging Report is presented to inform the tourism industry policymakers and residents about the changing dynamics of the tourism industry within the region. Tourism in the region has been undergoing changes from before the pandemic. The pandemic accelerated those changes. This report was developed to provide perspective and an understanding of what those changes are and, more importantly, how to adjust to them. The data in this report comes from government tax receipts and lodging performance reporting from Placer County, Washoe County, the Town of Truckee, the City of South Lake Tahoe, El Dorado County, and Douglas County. The data set includes data from 2018 through the end of 2022, the most recent data available for comparative purposes. We intend to provide periodic updates on these important trends in order to provide and inform the tourism industry, policymakers, and community members about changes in the market.
About the Tourism Impact Model
About The Tourism Impact Model The Tourism Impact Model (TIM) was created by Triple Point Consulting and SMG Consulting to understand the size and scope of the Lake Tahoe and Truckee region tourism economy and to provide insight to the tourism industry, government policymakers, and the local community to understand the changing dynamics of the tourism economy. The model was developed using government data sources and extensive visitor survey data. For more information contact Carl Ribaudo at carl@smgonline.net.
Key Findings
Overnight visitation data illustrates a tourism economy in transition. The data shows three consistent themes:
- Overnight visitation and lodging occupancy data have trended downward from 2018 through 2022.
- The average daily rate charged by the lodging industry has increased.
- The higher average daily rate has increased overall lodging revenue and transient occupancy tax collected.
This data illustrates a shift from a destination reliant on the overnight volume of visitors to one that has shifted to a higher yield per visitor. As might be expected, higher lodging pricing has reduced overall demand for the destination among overnight visitors and increased overall revenues generated by overnight visitors. The following figures illustrate this shift.
Figure 1: Lodging Occupancy — Includes the lodging occupancy trend between 2018 and 2022. Note the downward-sloping trend line.
Figure 2: Average Daily Rate — Showing the Average Daily Rate charged by all lodging properties to the guest.
Figure 3: Revenue Per Available Room1 — Includes the revenue generated per available room.
Figure 4. Transient Occupancy Tax — showing the overall Transient Occupancy Tax generated.
1 RevPAR shows the revenue generated per room regardless of if rooms are occupied or not. Thus, RevPAR is calculated by dividing total room revenue by total rooms available. This metric is of course applicable to any currency. RevPAR = Room Revenue/Total Rooms Available.
Lodging Trends
Figure 1: Lodging Occupancy
Figure 2: Average Daily Rate
Figure 3: Revenue Per Available Room
Figure 4. Transient Occupancy Tax
Destination Implications
The implications for the destination are significant. Fewer overnight visitors mean fewer transactions. For those businesses that have relied on the volume of transactions, this trend requires a challenging shift in product offerings and/or pricing to appeal to existing and fewer customers. In addition, the following implications are being experienced in the destination.
- Increased revenue: The Lake Tahoe and Truckee region tourism revenue increases with fewer visitors spending more. One result could be a more sustainable tourism industry as the focus shifts from mass tourism to quality experiences.
- An enhanced local economy: Higher tourist spending can benefit the local economy, but business needs to adjust their product offerings, marketing, and pricing strategies.
- Shift in target market: The shift towards fewer visitors spending more may require changing target markets in order to increase revenue further.
- Diversification of tourism offerings: The destination needs to shift its focus to improving the overall visitor experience.
- Sustainability considerations: With fewer visitors, destinations can focus on implementing sustainable practices and minimizing the negative impact of tourism on the environment and local communities. This may include promoting eco-friendly accommodations, responsible tourism practices, and conservation efforts.
Summary
As the tourism economy shifts destinations, marketing and promotion strategies must continue to recognize that peak tourism will continue to occur, and so will the need to educate visitors on protecting and caring for the Lake Tahoe and Truckee environment.
Additionally, as the market changes continue, so will the need for government agencies at all levels must adapt to policies that reflect the need to improve management and the visitor experience.
Overall, shifting from volume-based tourism to fewer visitors spending more can lead to a more sustainable and profitable tourism industry, with a focus on quality experiences, economic growth, and environmental responsibility.
For more information on this report or additional strategy and analytic services
Contact Carl Ribaudo at carl@smgonline.net.
