State of the Lake Tahoe ski industry: ‘This is our time’

LAKE TAHOE — Lake Tahoe has always been entangled in
a wrestling match between ski industry growth and local community interests —
and now more than ever, as millions in resort upgrades are under way heading
into the 2011-12 ski season.Vail Resorts is nearing completion of $30
million in resort improvements at Northstar-at-Tahoe. Across the way, Squaw
Valley Ski Holdings — which now runs both Squaw Valley USA and Alpine Meadows
following September’s historic combination of the neighboring resorts — is
embarking on a five-year, $50 million renovation at Squaw, host of the 1960
Winter Olympics. And even more change could come if JMA Ventures’ multi-million
proposed renovation of Homewood Mountain Resort gains approval.An
industry term is “yield per skier,” which designates how much each skier spends
not only on the lift ticket, but associated amenities such as merchandise, food
and lodging. Those on the business side of the ski resort organizational
structure are consistently trying to augment this number. Conversely, local
government and residents are in a constant struggle to ensure the yield is
channeled toward local jobs, public projects and local business revenues while
allowing for sustainable traffic levels and environmental
preservation.

Optimism for change
is not shared by all. Nina Pivirotto, 24, came from Pittsburgh after graduating
college to live, work and play in the outdoor recreational Mecca that is Lake
Tahoe. She is, in many ways, a typical Tahoe resident — young, educated, but
willfully eschewing the big city rat-race, the corporate ladders and rush to
procure the corner office.

Like some, she prefers ski small resorts like
Homewood — in its current state — with traditional lifts and absence of hotels
or retail outlets.

“Nobody wants to see the corporate world take over
Tahoe,” she said in an interview earlier this year.

However, Alex Kruse,
an employee at a local snowboard and ski shop, couldn’t disagree more. Kruse,
25, sees larger corporations as an indigenous part of life in any true ski
destination — the ski amenities, season pass options and culture necessitating
deep pockets only found within the corporate world.

“I think it’s awesome
that you can buy one pass and ride both Heavenly and Northstar,” he said,
referring to the fact Vail’s Epic Pass not only gets skiers access to
Colorado-based resorts such as Vail, Keystone, Breckenridge and Beaver Creek,
but also secures access to Northstar and South Lake Tahoe’s Heavenly, which was
bought by Vail in 2002.

Kruse said he enjoys the village atmosphere,
teeming restaurants and rowdy bars that accompany a big business ski
resort.

“Part of the reason I came to Tahoe is because I wanted to
participate in a scene,” he said.

Countering opinions, however, beg the
question: If there is a middle ground between the region’s community interests
and the ski industry’s corporate world?

Standing at that intersection is Sandy Evans Hall, president
of the North Lake Tahoe Resort Association. She is tasked with leading the
organization as it invests millions each year into North Tahoe marketing,
tourism, infrastructure and transportation projects and programs through
Transient Occupancy Tax revenues — a surcharge tax paid by lodging guests to
rent rooms for 30 days or less.

According to NLTRA data, the average TOT
collected in District 5 of Placer County — encapsulating much of North Tahoe —
totaled about $9.25 in 2009-10 fiscal year, and about $10.46 in 2010-11, an 11
percent increase.

Robust TOT funding, Hall said, in addition to the ski
resorts’ visitor draws, are vital to the concept of a destination ski area —
replete with hotels, restaurants and other amenities — that provides critical
financial support to a healthy local economy capable of providing a decent job
supply.

“What we’ve found by conducting research is the destination
visitor stays in the area longer, spends more money per day,” she said in an
interview earlier this year. “Also, the destination visitor typically comes from
high-income brackets, and they spend money in our area.”

The last point
is a big one for Hall and other regional economic leaders, as increased visits
don’t only benefit the big resorts, but also the small independently owned
lodging operations, restaurants, retail stores and other enterprises dependent
on a strong annual influx of tourists for survival.

The resorts are aware
of this symbiotic relationship. Last week, Rock underscored Vail Resorts’
charity donation program, Echo, as evidence of the company’s commitment to the
entire Tahoe region; $20,000 already has been awarded to Excellence in
Education, supporting schools within the Tahoe Truckee Unified School District,
and to the Truckee River Watershed Council.

Another example, Rock said,
is a $1 donation per online transaction between Heavenly and Northstar to the
Tahoe Fund, a nonprofit corporation supporting conservation around the Lake
Tahoe Basin, estimated to total $75,000 by the end of Vail’s fiscal
year.

This all is coupled with Squaw and JMA Ventures, which have
individually donated at the $25,000-plus level to the Tahoe Fund.

“I’m
here to tell you that we’re here to continue that legacy and move on in that
direction,” Rock said.

Furthermore, Chapman said planned improvements to
Homewood’s lodging and village would bring an estimated 500 construction jobs,
180 full-time jobs and roughly $16-$20 million in visitor spending to the entire
region through additional visitors — in addition, an estimated $7 million would
be contributed annually to local public services through property tax revenues
and TOT taxes.

“Clearly this investment is going to have long-term
consequences in terms of adding to Tahoe as a major destination,” Chapman said.
“People today are going to other ski areas including Utah and Colorado, and it
was with this vision we undertook this master plan for Homewood.”

One ski resort is not a ski destination, just as one casino or
one amusement park is not a destination. For tourism aficionados, a destination
is a region dedicated to one dominant purpose. In Tahoe — though recreation
activities abound — skiing and snowboarding is that purpose.

Yet a ski
destination comes with costs as well as financial benefits. More visitors mean
more traffic congestion during peak hours. For resorts to be competitive
nationally, this requires land development and the notion of marketing the
region as a whole — which does create some competition to local business owners
unable to make such huge infrastructure investments.

The goal, of course,
is balance.

“It’s like anything else,” said Blaise Carrig, co-president
of Vail Resorts Management Company, in an interview earlier this year. “There
are bad corporations and there are good corporations.”

Part of the reason
that Vail Resorts is so successful (the company recently reported that Epic
Season Pass sales volume is up 9 percent over the previous year), Carrig said,
is it excels at giving the customer what it wants while keeping its eye on
balancing community interests.

“Each resort has to be true to its
authentic roots,” he said. “Vail owns six resorts, and I focus on cherishing and
nurturing the individual position of each of those. Breckenridge is different
from Heavenly. So we try to run like a small resort where it makes sense, and
try to operate like a big corporation where it makes sense, like marketing
campaigns or capital improvements.”

At Northstar this year, authenticity
means expansion in the form of 170 acres of new sidecountry terrain, a new high
speed chairlift, the construction of the on-mountain Zephyr Lodge, a 22-foot
half pipe constructed by Olympic Snowboarder Shaun White and village retail
improvements.

Squaw’s answer, Wirth said, was acquiring Alpine Meadows, a
deal that’s been a rumor for years. Last week, Wirth said he is in discussions
with Troy Caldwell — owner of the private White Wolf property separating Squaw
and Alpine — about a possible future cooperative agreement, although Wirth he
did not specify if such a agreement could provide a connection between the
resorts.

“Troy is a great guy,” said Wirth. “He’s a great friend. He’s
got a dream and we’re working together in terms of accomplishing things on a
long-term basis.”

While much of Squaw’s $50 million in upgrades will be
allocated toward culinary services and village renovations, Wirth said a
significant outlay will be dedicated to lift infrastructure, trail maps on the
mountain, and new grooming equipment with an eye toward enhancing the ski
experience.

“We will absolutely compete with Vail,” Wirth said.