Inextricably Linked – Tahoe Ski Industry & Real EstateJeff Brown, November 9, 2016 in Economics, NSAA, Real Estate, Ski Industry
The economic fortunes of Lake Tahoe real estate and the ski industry are inextricably linked. While the region is fortunate to offer compelling amenities in all four seasons, there is no denying the enormity of the ski industry’s impact on the region.
The NSAA (National Ski Area Association) Journal recently published results of the Kottke End of Season Survey sharing the health and well-being of the industry nationwide. The conclusion, while plainly obvious, is that where snowfall was abundant, ski resorts thrived.
Tahoe’s region saw snowfall in line with long term averages delivering strong economic results to the region’s resorts. Skier visits in the region jumped by 110% over the prior winter which saw disappointing snowfall. Demonstrating the financial capability of ski consumers, ancillary spending rose similarly through lesson packages (+115%) and season pass sales. The latter metric is particularly relevant for the Tahoe market given the frequent, short visitation patterns of consumers driving to the region from the Bay Area. Resort operators have courted the favor of these pass holders through discounted or dynamic (multiple resorts) passes that now comprise over 40% of all skier visits.
Following a logical path, as skier visits improve, resort operators are more willing to invest in capital improvements. The last year saw an increase of 17% heading into the most recent season. Non-ski activities are becoming an increasingly vital area of investment to capture the interest of entire families. Such investments include:
• Non-skiing chairlift rides
• Mountain biking
• Zip lines
• Climbing walls
Investment in resort real estate has similarly improved on a national level having increased from $24.8 million in 2014 to $96,5 million in 2015 and is expected to have further improved to $110.28 in 2016. The recently announced sale of the land occupying Northstar’s resort operations will undoubtedly drive this figure higher.
The survey concludes that while economic conditions remain stable, the greatest risk to the industry is weather. Assuming another strong year of snowfall, the ski industry in the Lake Tahoe region appears to be on very solid footing.