An Economy Dominated By Tourism, Tahoe Region Still Feeling Impact From First Stay-At-Home Order

When Heidi Hill Drum went Christmas shopping last weekend in South Lake Tahoe, she was surprised by the crowds at stores. Ten months ago, many of the same stores were empty as the state entered it’s first wave of stay-at-home orders to mitigate COVID-19 spread.

“When I asked the owners, how are things going, they said, ‘It's been a surprisingly busy Saturday,’” she said of stores on the California side of South Lake Tahoe, where a new stay-at-home order is in place.

Hill Drum is the CEO of the Tahoe Prosperity Center, a nonprofit that recently analyzed the pandemic’s impact on the Lake Tahoe area. She says the first stay-at-home order greatly impacted the region.

According to a new report from the group, within the four counties that surround Tahoe nearly 120,000 people lost their jobs during the first few months of the pandemic. She said that likely “translated to between a 5,500 and 7,500 drop in local employment over the same two-month period.”

That high figure shocked Hill Drum, who said it “is the same number of jobs lost during the entire great recession in Lake Tahoe."

Hill Drum says the hardest sectors of society were the arts, food and tourism.

“Many of our businesses are going to — in particular retail businesses — are going to have to think beyond people walking in their business, and they're going to have to shift to online commerce options or other things,” she said

Hill Drum’s group is in the process of figuring out how jobs have come back as the pandemic has moved forward and is creating a resiliency plan for the entire region with the hope that the pandemic ends soon. She says the second wave of stay-at-home orders isn’t hitting the community as hard, but the pandemic is forcing the community to realize it’s not prepared for disaster, whether it be a pandemic, climate change or wildfire.

“The pandemic highlighted that we're too dependent on tourism,” she said. “Those impacts were significantly negative for local workers, for many of these local businesses, and they're now having to rethink how they look at their business models.”

She says the Tahoe Basin faces a long path to recovery and the region should take a lesson from the era after the Great Recession. She hopes Tahoe area leaders and residents see the impacts of COVID-19 as an opportunity to diversify the economy, which she says is already happening in pockets around the lake.

For example, she says there are a few tech hubs that draw in remote workers whose jobs aren’t tied to seasonal work.

“We don't necessarily need to be ... helping businesses recover from the pandemic, as much as we need to be helping them focus on longer term resiliency and sustainability as a businesses [that pivot] away from just expecting a tourist to come in and pay all the bills to more of innovative technology models and things like that,” she explained.

After a flood of tourists returned to the lake this summer, and with many headed back for ski season, the economy is slowly rebounding, says South Lake Tahoe Mayor Pro-Tem Devin Middleborook.

“Our businesses were able to be very creative this summer, our restaurants expanded outdoor dining,” he noted. “But that being said, we have seen local businesses closing and some that will not reopen after this is all over, and that's a permanent loss to our community.”

Middlebrook says the Tahoe region hasn’t fully regained strength, but the second stay-at-home order is once again slowing down the economy. He said one positive note is that people never stopped coming to recreate in the Tahoe Basin despite the pandemic, because people needed to get outdoors.

“It's good that we had an economic base … but at the same time, it's challenging, because then you're having a lot of visitors that then increases the chance of COVID spread in your community,” he said. “So, it is a very difficult balance to strike.”