Service industry advocates say inflation is adding extra pressure for Tahoe's low-wage employees

With summer in full swing, Lake Tahoe is a major destination for vacationers with its pristine lake and cool forests. But this summer season brings with it not just pressures from the past two years — like the pandemic, supply chain issues and wildfires — but the onset of inflation as well.

Community advocates worry that rising inflation may be the final straw for those who work in the service industry.

“The housing in South Lake Tahoe is almost non-existent at this point, the housing prices have skyrocketed dramatically, the number of rental units in the community are almost at nothing,” said Bill Martinez, executive director of the South Lake Tahoe Family Resource Center. “We don’t want to become like a Vail where people are bussed from the service industry to serve the community, it’s getting to that point.”

Martinez’s center provides bilingual counseling and advocacy services for Latino families in the area. He notes that about 30% of South Lake Tahoe’s population is Latino and that the majority of those families have come to find work in the area’s tourism industry.

“Those are the folks who are working in the service industries and are really struggling with inflation in South Lake Tahoe and are not sure what to do. It’s becoming more and more difficult to put food on the table and pay rent,” he said.

In the past year, he said he’s seen many people who work in these industries move out to more affordable areas, like Reno or Minden, Nevada, or to population centers where there are more job opportunities, like Los Angeles.

“The folks who remain remain because it’s such a wonderful place to be; the attraction for tourists is the same attraction for the people who live here. But if you can’t make ends meet then you really can’t be here, and that’s the sad part of inflation and the wealth gap in our community,” he said.

But this isn’t just a Lake Tahoe problem. Sarah Bohn is a senior fellow at the Public Policy Institute of California, a non-partisan think tank. She authored a recent report on income inequality in California.

“It’s been growing substantially over time. California has one of the largest gaps between high and low earners in the nation,” Bohn said.

The report also showed that Black and Latino families earn 50 to 60 cents for every dollar earned by white or Asian families. It also revealed that Black and Latino families were three times as likely to be in the lowest tier of wage earners — meaning they will be more vulnerable to pandemic job loss and the rising cost of food and gas.

In terms of the direct impact of inflation on the tourism economy, it depends on who you’re looking at, according to Carol Chaplin, president and CEO of the Lake Tahoe Visitors Authority. By some measures, fewer people are visiting.

“As far as South Lake Tahoe goes, we’re looking at a 10-15% softening over the summer,” she said, saying that things like higher gas prices and less availability of flights may be contributing to some visitors deciding not to come this year. “We’re still getting strong visitation but maybe not as many days, maybe people are looking at cutting it a little bit short or not doing some of the activities that they would normally do, but they still want to get out.” 

She said visitors should expect to notice small changes, like restaurants with shorter hours or with fewer menu items. And that’s because of the intersection of housing instability and rising prices leading to an inevitable reduction in services that visitors might usually expect.

“We’ve had a housing issue for a number of years, but when you look at the fact that many of our employees also live a little bit farther away and they’re commuting and then you impact that with gas prices, it’s definitely taking its toll,” she said.

Tony Karwowski, the president of the North Lake Tahoe Resort Association, agreed.

“Workforce housing is a real challenge in North Lake Tahoe right now, the average price for a home has more than doubled in the past five years making it very difficult for employees to purchase a home here, and that correlates to our rental market as well in terms of the availability of rental units,” he said.

He added that he has been recommending that people come midweek instead of on the weekend to avoid large crowds and long waits.

“Bring your patience and understand that the people who are here are here to make sure you have a great time, and they want nothing more than that,” he said.

For those who continue to work in the tourism industry, Chaplin says the Tahoe region is seeing visitor numbers very similar to previous years, as the pandemic has only increased demand for outdoor-focused destinations.