Study: Too many rooms, prices too low on South Shore
By Kathryn Reed
STATELINE – The $35,000 economic study involving the South Shore Vision Plan has been completed, but is not being released to the public.
Carl Ribaudo with Strategic Marketing Group gave a presentation to the Lake Tahoe Visitors Authority board last week, but because he neither provided members nor staff with a written or electronic version of his PowerPoint, it is not a public record, according to the Douglas County District Attorney’s Office.
Nancy McDermid, Douglas County’s rep on the LTVA board, and Tom Davis, South Lake Tahoe’s rep, were surprised after the Sept. 14 meeting to learn it was not public. They are the only two public officials on the board. The rest represent private entities.
Embassy Suites has the highest occupancy on the South Shore and the Marriott properties are among a handful built from the ground up in the last 15 years. Photo/LTN file
However, when Ribaudo makes his presentation to the South Lake Tahoe City Council in October, it will have to be public – whether he hands anything out or not, per California opening meeting laws, according to city officials.
Ribaudo told Lake Tahoe News he did not want to physically release the data to his clients – and by default the public – until all had heard his presentation. This is why Lake Tahoe News does not have a full report on the economic study. Douglas County commissioners are expected to hear from Ribaudo in November.
Douglas, South Lake Tahoe and LTVA each contributed $10,000 to the study, while South Tahoe Association of Resorts put in $5,000.
Ribaudo told the LTVA board with every town seeming to tout a tourist attraction, Lake Tahoe has more competition than ever before.
Besides tribal gaming taking a hit on casinos throughout Northern Nevada, the introduction about 15 years ago of cheap air service from the Bay Area to Las Vegas has whisked people away.
John Koster, general manager for Harrah’s Lake Tahoe and LTVA board member, acknowledged the deals being offered are significant – including what his parent company is putting out there.
Ribaudo noted that the value of the lake itself is missing when it comes to the rate of a hotel room. Lakefront lodging is not doing substantially better than the rest of the South Shore. Embassy Suites is doing best in terms of occupancy and average daily rate.
Non-casino lodging on the South Shore represents 34 percent of the inventory, but where only 20 percent of the visitors are spending the night. This highlights the fact that many of the hotel rooms in South Lake Tahoe are not where tourists want to stay. Many have become weekly and monthly rentals.
It also points to the problem that the number of hotel rooms far exceeds any anticipated demand. Those rooms also drive down the price of rooms throughout the region.
Part of the problem is anyone who might want to buy the rundown motels are handcuffed by the regulatory process. McDermid, who also sits on the Tahoe Regional Planning Agency board, said the Regional Plan update should give more flexibility to people wanting to repurpose those properties.
Her LTVA colleagues were more skeptical in what might emerge in the Regional Plan that is supposed to be adopted in December. Davis would like to turn tourist accommodation units into commercial floor area. Both are commodities based on how the TRPA does business.
But, as attorney Lew Feldman pointed out, “We also have too much commercial that is unsustainable.”
Ribaudo did note the campgrounds in the area are faring quite well.
He shared data from Smith Travel that said South Lake Tahoe has an occupancy rate of 43 percent, with an average daily room rate of $102. This, Ribaudo said, is well below the regions South Shore is competing with – like Napa and Monterey.
In 2001, at the peak of gaming, hotel occupancy in the area was 50 percent. Ribaudo said the lodging was built to sustain the once $400 million gaming industry. Now gaming is a $190 million industry in Stateline.
It was also noted that the South Shore has had few lodging properties built from scratch in the last 15 years and that most hotel chains are getting rid of exterior room entrances. But when hotels are remodeled on the South Shore that isn’t the case.
Ribaudo said based on his research it’s not a matter of if things should change, but what should the changes be.
Economic study history
SMG was one of three firms to send in bids to do the report. The others were from Las Vegas and Denver.
Mike Bradford, with Lakeside Inn and Casino, has been leading the South Shore Vision Project for Douglas County, which initiated the idea. Bradford said it was through the county’s Economic Vitality Department that a request for proposal was put out to find someone to do the economic study.
Bradford and Mitchell Mize, director of real estate for Edgewood Tahoe, are the two who reviewed the three bids. They picked Ribaudo. (Lynda Ribaudo, Carl’s wife, is CFO for Edgewood Companies.)
Ribaudo’s study also has specific applications for LTVA – called the Destination Decision Model – that will allow the tourism bureau to use “what if?” scenarios for economic forecasting. The goal is LTVA will be able to track its marketing dollars better and see if there is a return on investment.
“Lakefront lodging is not doing substantially better than the rest of the South Shore. Embassy Suites is doing best in terms of occupancy and average daily rate.”
Embassy Suites, with hard work by chief engineer David Hansen, has made signifcant and verifiable upgrades in it’s green credentials such as: composting ALL of their food waste, installing a low water and energy use oozone laundry system, signifcantly reduced power usage overall by switching to LED bulbs, sensor switches and varialbe speed pumps, etc.
This has earned them recognition from the Green Lodging Association and, obviously, heads on beds from an increasingly aware and connected visitor base who will support businesses and communities that are taking real and verifiable steps to protect the environment. That should be a HUGE clue for the whole region.
It’s not rocket science. A major contributing factor to the low occupancy rates is the shift of the bed base to vacation rentals in our residential neighborhoods, yet this article doesn’t even mention that. I now live in the new “motel district”, with new neighbors every weekend. And there is no way the City and County are collecting all the TOT they should.
This shift has also adversely affected our local restaurants and even the grocery stores. People rent homes, buy their groceries where they live, and cook their meals in their rented house with a full kitchen.
I saw an article in a Bay Area newspaper not long ago indicating that a Peninsula catering company had significantly expanded its business to put together pre-made meals, pack them in dry ice, and ship them to Lake Tahoe for those on vacation. There’s not a lot of economic benefit to our community from this!
And meanwhile, our residents have a revolving door of neighbors who have to be constantly educated not to feed the wildlife and that parties until 3:30 in the morning might not be appropriate in a residential neighborhood.
Thank you Tom for the informing us of Embassy’s doings. They have taken the lead and hopefully others will follow.
A problem with vacation rentals? How surprising. Doesn’t everyone enjoy meeting new strangers every weekend who like to party and have very little regard for adjacent homes?
Eliminating vacation home rentals would immediately force those folks into hotels, where they should be and ensure the city collects its hotel taxes. Sounds like it would also immediately fix part of the problem. All it would take is a simple vote to undo the code allowing the rentals.
Red Dog, your kidding right? You want to 86 what could be considered one of the only growing segments of the travel industry? You want to force our visitors to choose between what THEY might consider over priced hotel rooms, or flea bag motel rooms? I think our economy would be better served creating MORE choices for visitors (both lodging and activities), not impeding their choices. Yes like all things in life positives come with negatives, but the way I see it the positives FAR outweigh the negatives in this situation.
Wow! Did I just hear a vote for the free market from Bigger? Halleluia, there is hope!
Totally agree with Passion4Tahoe, and many of the above commentators.
1. Improve local economy, and grow better quality jobs in town.
2. More families move in to town, to have a better quality life, as there are good jobs, great schools, and a world class recreational environment.
3. Nightly residential rentals get converted to monthly or owner occupied residences.
4. The majority of visitor stays shift back to the commercial areas.
Dog, when have I ever railed against the free market? I’ve ALWAYS commented a pro SLT business viewpoint. You must have me confused with some one else.
it’s all part of the big plan to shrink the town
most of you folks must have agency jobs
for them it just does not matter what size the town is
Maybe there should be a limit on the percentage of residences in South Lake Tahoe that can be rented as vacation rentals. The vacation rental market is flooded up here and this has made homes that otherwise could house families just sit vacant for weeks and months. I clean many vacation rentals and am very aware how often some lack being rented. They could instead provide affordable housing for local families so that families are not forced to find cheaper places to live down in the Carson Valley. I know many people who moved to Gardnerville and Carson because they could find better, cheaper homes for rent down there while still being close enough to commute to work everyday. This takes away from the local economy drastically.
The attitude of wanting to corral people into staying at hotels or motels, and remove the choice of vacation rentals (which are much more cundusive to activities like family reunions, weddings, group gatherings, etc.) is akin to passing a law that requires anyone wanting to visit here be required to spend $200+ a day per person, or take your business elsewhere. NOT A POSITIVE BUSINESS MODEL!
Eliminate Vacation Home Rentals? My gosh, that sounds like a horrible solution. The vacation home market is a wonderful alternative to flea bag motels with bed bugs. Plus it helps 2nd home owners offset their costs and pay property taxes. Vacation home rental companies pay the hotel taxes and should be recoqnized for the Good they do for the city. Eliminating what is working, is not a good idea to me.
Lake Tahoe’s Alive,
You must own a vacation rental or work for one of the management companies, and certainly don’t have vacation rentals around you. Vacation rentals in my neighborhood have destroyed my “home” and do nothing but but bring noise, traffic and strangers who don’t care about the neighborhood or their impact, into our lives. Get vacation rentals out of our neighborhoods!
Oh, and those taxes, there is no oversight so owners/managers just pay whatever they feel like,if they pay at all. Remember the director of the chamber of commerce not paying her vacation rental taxes and all the while showing others how to “manage” their properties?
And who pays for all those hours that the sheriff and police spend at vacation rentals taking care of complaints? Certainly not the tourists, it comes out of my taxes.
Steven, there are plenty of long term renters AND resident home owners who are just as guilty of many of the infractions you blame on vacation rental folk. Should we 86 them as well? And just want to remind you that tourism is the main economic engine driving this community thereby a certain percentage of the local tax base comes from these sources, not just your wallet.
Passion4Tahoe,
I grew up on So. Shore in the motel biz and all these years later I find myself still in it. Except now it’s in my neighborhhood. Half the homes on my street are owned by second home owners who come up once every couple of weeks, one is a vacation rental with different folks all the time. I take care of everyones trash and keep an eye on the properties. Also from what I can find No TOT being paid on that vacation property.
There is definetly a trend here of people not staying at whats left of our motel / hotel rooms.
When Harveys first built the big tower of rooms my Dad said,”we’re gonna lose alot of our guests”. Although through hard work and bending over backwards we managed to keep people coming back to stay at our motel.
Now with a lousy economy and so many empty houses here, people are renting them out or letting friends and relatives stay for free. Hence no TOT and slow business for the restaurants, stores and other businesses.
Who is looking into TOT collection? And how can you prove it’s actuaully a rental or a family cabin owned for generations? Who can regulate 10 cars at a house with parties till sunrise?
Hah! Listen to Old Long Skiis! Once the party animal on this street in the 70’s and now I’ve become the grumpy old man.
Take Care Old Long Skiis(and turn down that loud thump thump music, ya damn whippersnappers!)
There are 4 vacation rentals on my street. Two are managed by a local rental business for the owners and they collect and pay the TOT. The other 2 are rented out by the owners of the properties and they are not required to collect and pay TOT. They are running a business and collecting taxes (like sales taxes) is a requirement of retail. Why not make the owners collect and pay the TOT?
Well two comments – vacation rentals, whether you like them or not, are definitely affecting local hotel demand and two – poorly maintained hotels dont help. It isnt a matter of room cost, it’s value – and most south shore properties dont exactly offer good value. This allows a few “nicer” places to overcharge and the rest to draw in the crowd looking for bottom dollar regardless of quality. A hotel or motel does not need to be be a new building to look attractive, but it certainly helps if it doesnt look like a flop house or is surrounded by a ratty neighborhood! The idea that we need to worry where where the door is missing a lot of what lies between here and there.
You hire and pay for the outcome you want. How about it Carl?
Hey, Long Skis — I grew up here at Tahoe, too. My family owned a small business and most of my friends parents owned motels or other small businesses. These are the folks that used to constitute the middle class in our community.
I argued vehemently against allowing vacation rentals when this issue was brought to the forefront and told members of the then City Council that it was not a property right to allow people to use their home for commercial purposes. The real estate community and many others who make a living off of this type of enterprise swayed elected officials from viewing this as a zoning issue, and as a result, the City and County erroneously began viewing it as a property right.
It is my belief that many fantastic residents left our community, in part, due to the change from maintaining a balance between offering a good product for our visitors and maintaining a high quality of life for our residents. It seems to me the almightly dollar won out.
What a shame!
TOT
Every vacation rental is required to collect and pay TOT, whether in the city or county, managed by the owner or a company. If you suspect otherwise contact the city or county and report the address and your concerns. If you don’t, shame on you. By reporting the address you can also find out if the property is licensed to be a vacation rental, also a requirement.
FUNNY ABOUT MONEY,MOTEL VERSE HOTELS,VERSE SECOND HOME OWNERS ALL IN THE SAME BAG.
IS THERE NO CORRECT WAY SO EVERYONE WINS A LITTLE PIECE OF THE PIE?
THESE STORIES ARE ENDLESS,CAN’T SOMEONE COME UP WITH A AWAY WHERE WE ALL WIN?
Old Long Skis,
Haven’t you called the trash company or Clean Tahoe to take care of the trash problem on your street, yet? By picking up after the fact, you are just helping promote bear and other animal problems. Get pro-active!
It would, in theory, be pretty easy to regulate and tax the vacation rental homes in the Tahoe Basin, but we need a strong system to do so. This should be the responsibility of the jurisdictions, as they are the ones who get the TOT anyways.
There could be a registration system for starters; if a vacation property doesn’t get registered then there’s a fine. The property management companies could also be required to register all their listed vacation properties. The “new” TOT property tax could be added to a properties annual land taxes, or setup monthly or quarterly. This is something that the local jurisdictions regulate not the TRPA. And I for one would be happy to see the vacation renters pay their “fair share” in TOT.
And yes, I live in a West Shore neighborhood dominated by second home-owners and vacation rental properties. But, generally it is a nice quite neighborhood.
Passion 4 Tahoe,
You are correct about how vacation rentals became “legal”. We can all thank the real estate community and some council members who own vacation rentals, Tom Davis is one. The city and county thought vacation rentals would be a good way to collect more tax, and then they have never put in an oversight. And penalties for infractions such as parties, excessive noise, to many people, to many cars, are almost non-existant. Have you ever heard of a vacation rental loosing it’s license?
Issues with vacation home rentals (VHR) are neither new nor unique to our area. I’ve found links to several articles and ordinances which I’ve provided below. While VHR are most certainly a valid topic for discussion here, it seems the dialogue is once again reverting into a ***** session and away from being solution oriented. Yes, I have several vacation rentals on my street and yes there have been occasional problems associated with that. I do empathize with those who experience significant and repeated problems with VHR. There is a mechanism to deal with it as outlined on the city’s website:
http://www.cityofslt.us/index.aspx?NID=453
If the city does not adaquately address the problem, you might need to form a group with your full-time neighbors and take legal action.
Here is a 2005 Douglas County ordinance:
http://cltr.co.douglas.nv.us/clerk/Vacation%20Ordinance.pdf
This from May 2102 very succinctly outlines the benefits, problems and potential solutions associated with vacation home rentals. Here’s an excerpt:
Like anything else, the key to finding a potential solution in local communities is communication.”Vacation rental owners and managers should form local and regional organizations for the purpose of improving the way they operate, mitigating impacts, and dialoguing with their host community about benefits and issues associated with vacation rental operations,” Coates said. “We believe that appropriate regulation based on real, documented issues will benefit all parties
http://www.inman.com/buyers-sellers/columnists/tomkelly/vacation-rentals-a-tough-sell-some-communities
Another angle from Mortgage Orb posted June 2012
http://www.mortgageorb.com/e107_plugins/content/content.php?content.11861
I found all this with a simple Google search. Please, let’s be solution oriented lest we lose sight of the goal: a prosperous, rejuvenating and sustainable mountain community set in one of natures finest locations.
p.s. Thanks for the positive comment Scott Bluemthal
I don’t own a vacation rental, but I understand why folks rent them. Most today prefer an outdoor experience with outdoor-related amenities; outside BBQ & seating. The hotels could incorporate outdoor common areas with fire-pits, happy-hour music, food & drinks (ala The Beacon), and bike/ski valet service to capture that audience. There could be bike-taxis to take folks around the area to pubs, restaurants, etc. during the summer. They should turn that convention-hole-in-the-ground into a huge water-park/sled-tube-park (summer & winter respectively), and surround it with food outlets and shops. I stayed at the old hotels during the 60’s & 70’s — and not much has changed with them — but it has changed with me. The smell, noise & view inside the old hotels just does not cut it today.
The Edgewood improvements make sense because they focus on what folks enjoy today — not on how to make the old suit fit. The old motels could be re-purposed into retail downstairs, housing upstairs or something similar. “Engagement” is the name of the game today for visitor dollars.
I live next door to two vacation rentals which I’ve had many complaints for over a year. I’ve had to threaten the county tax collector who issues the permit for not enforcing the VHR Ordinance. I suggest anyone having problems in the County contact Norma Santiago’s office, or C.L. Raffety for immediate results. From what I’ve been told they are working to update the county ordinance to stop hot tub usage after 9pm. Hot tubs according to the Sheriff are the main source of complaints. I’ve never seen a permit revoked either but if I have many more complaints, EDC will be getting a big fat lawsuit. If the landlords are not held responsible by the County then it’s time to go after the County (same goes for the City). Call Santiago or Raffety if you have constant problems (Bob Albertossi in the City). By the way – if you saw what people do in these hot tubs week in and week out you wouldn’t go near one. The maintenance man next door says chlorine isn’t enough to kill what goes into those tubs.
Room prices too low??? I think that’s great – now my friends can afford to play and stay in Tahoe. Nobody wants to pay $150 to stay the night! Too much time wasted on this vacation rental issue – HOW ABOUT WORKING ON THAT BIG HOLE AT STATELINE!!!! Can’t believe you paid $35,000 for this study – what a joke! Any local could have told you the same thing for nothing
Tom, It was not my intent to begin a negative trip down a long road. My point is that too much of a good thing is not a good thing, and policy makers need to consider the need for balance between our all important tourist industry and the quality of life for residents.
I would bet that you are not surrounded on three sides by vacation rentals as I am. It starts to get to a person after a while when incidents happen on a very frequent basis.
Bob, I am delighted to hear that there is consideration of a curfew on hot tub use. That would certainly make a positive difference in this neighborhood. I had to call the Sheriff last week at 3:30 in the morning…
Irish, you have some great ideas. How much more fun would it be if our Stateline casino hotels would do some REAL updating and remodelling and make their places more like what’s been done on the California side? I love the idea of indoor/outdoor common areas with firepits and bbq’s and such. I get together with a group of old army buddies to ski every year and we usually find something of that very nature in other ski resort towns. And the best ones entice us to come back every couple of years or so.
There is a reason we’ve never gathered at South Shore.
P.S. We are not a small group, either. We range from a low of 90 up to 150 attendees annually. That’s not chump change.
As usual,lots of good comments. There’s a bunch of stuff that could be done in this town to bolster the local economy.
Start by marketing what we already have.Anyone remember that old slogan “Americas Year round playground”? Lets get some heads in beds. We have great Skiing, great beaches and of course the lake itself and so much more!.
Vacation rentals can be a bummer but I will say the people on my street that have their second homes here are really cool. Always stopping by to say hi and bringing me something from their gardens off the hill.
Steven, I’ve had some success with quelling the the bear problem. I’ve talked with my neighbors and they are keeping their smelly kitchen trash indoors till pick up day. Hooray for me!
As far as calling STR ? … Nah,I worked there 31 plus years and I don’t need to call them. I know plenty about trash and bears, trust me.
Take Care, Old Long Skiis
1. I believe that the Tahoe Keys Resort Vacation Rental business started in the early 1990’s. The two individuals who created the business plan and started the rental business, probably hired Tom Davis for his so-called marketing skills and especially his political connections. Tom Davis will never do anything to help rein in the vacation rental problems.
2. Attorney Lew Feldmans Law Firm has just been named in a Federal Court Bankruptcy fraud case.
https://www.laketahoenews.net/2012/09/court-trustee-accuses-members-defunct-transit-system-of-fraud/
Lew Feldmans Law Firm represented Lake Tahoe Development Co. in the “Tahole” project.
Why is he even quoted in this article?Where is his credibility?
Totally invalid report!! SMG?? SMG?? Who anointed them as experts? When have they ever done anything that’s generated business either for our town, or a private entity?
Well SMG is brilliant in that they can get 35k for saying the same dribble they always say!
Keep Tahoe Alive by marketing globally our natural resources. Locals, get off the couch and start cleaning up the beach and getting involved in protecting what we have. If you want more ideas, contact me. It starts from the heart not the wallet.
Me, I lived here most of my life
Passion4Tahoe,
I hope you didn’t take my comments personally. I was certainly not singling you out. You and other locals clearly have some valid complaints. It’s widely understood that VRH can and do cause ongoing and infuriating problems as well as some benefits as the articles I added links to pointed out. I hope they provided LTN readers with some useful info. Bob’s advice on how to deal with recalcitrant VHR owners / managers was also very helpful.
My point is that there are some posters who regularly take what could be a useful dialogue that is solution oriented and twist and subvert it into personal attacks laced with opinions rather than facts. We need to stay focused on solutions and not just vent and spew under the cover of pseudonyms if we hope to solve our problems and move in a positive direction.
Dear Passion for Tahoe.
I too have 3 vacation homes surrounding my property. I agree with everything you have said. I noticed the decline for the Motels when the sign always say, there are vacancies. That is when the vacation home frenzy came into effect. I have a passion for Tahoe, and living here for 27 years, I still love this place. Thanks again Passion.
I like the vacation rentals in my neighborhood. The properties are kept up well and they rarely have occupants in them. It’s all the long term rental houses that have peeling paint, junk outside the door, and the landscaping is lacking. There is no incentive for a long term renter to paint the house and keep the neighborhood free of trash. They are just here for a couple years and then willl move on. At least vacation rental owners maintain their property.
Marc, true, unless you live next to the popular, frequently rented properties, especially the ones that have occupancy at 20+ people, It’s like a high school kegger almost every weekend, only being 50+ years old, I’m not into them anymore, life has evolved ;)
I understand and respect Carl Ribaudo’s resistance to releasing his report until all funding partners have a chance to receive it first.
And by providing a majority of the funding, taxpayers can certainly look forward to reviewing this study that they largely paid for. Let’s hope for $35 grand that they got their money’s worth.
Far more annoying than that “skunk smell” down the street are the loud and intrusive vacation rentals in my neighborhood. If we have such stringent laws regarding cultivation here why not the same for these rentals? Why aren’t landlords being fined $1000 per day when thier neighbor reports them for not paying TOT of having noice complaints from nightly tennants?
Local Government = Hypocratic and Greedy Scum
Get Rid of The City