Decline in Travel spending – Impact on Truckee

With much reliance on its tourism industry, Truckee is preparing for the economic impact from losses in visitor spending due to the outbreak of COVID-19.

In early May, Tourism Economics released a report that projected California will lose $72.1 billion in travel-related spending in 2020. The lost amount is nearly half of what the state generated in 2019.

“If 50% is the baseline used to forecast Truckee’s future, this could mean significant loss in town of Truckee’s revenue,” said Mayor David Polivy in a news release. “Visitor generated tax revenue consists of a 10% transient occupancy tax (TOT) on lodging, plus sales tax that goes toward the town’s general fund, which support important essential services such as public safety, snow removal, road maintenance, trail and bike parks, transit, streetscape projects, emergency services, river revitalization, and more.”

With projections of roughly 50% lost in visitor spending, Truckee is likely to see a significant impact in revenues moving forward. According to a study done last fall by Dean Runyan Associates the town had $149 million in visitor spending for 2018. Visitor spending supported 1,460 jobs and generated $5.6 million in local tax revenue.

“Truckee has seen steady growth in visitor spending over the past decade, contributing not only to the experience we’re able to offer those who travel here, but to the creation of local jobs and to our community’s essential services and way of life,” said Jim Winterberger, Truckee Tourism Business Improvement District committee chairman and owner of Tahoe Getaways, in a release. “Visit California’s projections that travel spending will decline 50% this year are grim. At this point, with travel restrictions still in place it’s not clear whether the financial losses in Truckee will be greater or less than Visit California’s estimate. Either way, because we rely on tourism, this is devastating to our local economy.”

Of the $149 million generated in visitor spending in2018, 38.6% was generated by retail, groceries and gas, 28% by lodging, and 16.6% by restaurants.

Truckee’s gross lodging revenue, according to Visit Truckee, is likely to suffer the greatest loss of all of the town’s economic sectors. The loss in lodging revenue will also impact the town’s ability to market to visitors.

“Visit Truckee’s destination marketing budget, funded by the (Truckee Tourism Business Improvement District) 2% assessment on lodging, will be significantly low in collections for 2020, while recovery marketing will be critical to aid in rebounding and rebuilding our economy once travel restrictions are lifted and it’s deemed safe to travel again,” said Colleen Dalton, director of tourism and economic programs for Truckee Chamber of Commerce, in a release.

Getting to Truckee

Visitors arriving by car during the summer months are expected to remain strong, according to Visit Truckee, but little to no visitors are expected to arrive by air through the summer and potentially through the remainder of 2020 and into 2021. Of Truckee’s summer visitors, according to a Visit Truckee four-season visitor intercept study in 2019, 25% arrive by air.

“We are seeking to predict the impacts, traveler behavior and timing for Stages 3 and 4,” added Dalton. “Our role is to help educate visitors prior to arrival about the exceptional, socially distanced experiences they can have here, and the precautions our retailers, restaurants and lodging properties are taking to ensure health and safety of both visitors and residents.”

Truckee’s Know Before You Go campaign is an educational website at http://www.truckee.com/knowbeforeyougo, and highlights what visitors can expect. Truckee has also partnered with Take Care Tahoe to create a regional message at http://www.takecaretahoe.org/covid-19

Leakage to neighboring states

With some nearby states having relaxed restrictions regarding COVID-19, Visit California released info that shows Californians traveling to Nevada, Arizona, Oregon, and Utah took $588 million in spending to those states. The loss is expected to grow to nearly $1.6 billion by the end of the month.

“The safe reopening and community’s economic future is highly contingent, and reliant upon the state and county’s action,” said Polivy in a release. “We’re highly aware of the need to balance those two, and also aware of the revenue being lost the longer it takes to reopen — especially when we see our neighbors in Nevada reopening. The ‘travel leakage’ Visit California cites is a very real concern.”

Justin Scacco is a reporter for the Sierra Sun. Contact him at jscacco@sierrasun.com or 530-550-2643.