Trying to meet needs: Ski resorts providing more housing options for employees

The fact that housing costs in Lake Tahoe and Truckee are untenable for front-line ski resort employees is as well known as the 10-minute rule about changing weather patterns in Northern Nevada.

Seasonal employment at regional resorts spikes into the thousands when lifts start spinning in late November and early December. In an effort to lure and retain front-line resort employees, as well as provide lodging options for key year-round employees, major ski resorts in Northern Nevada and Northern California have added a variety of housing assets to their real estate holdings or signed numerous master leases on Tahoe-area motel and lodging properties.

Tom Fortune, Vail Resort’s vice president and chief operating officer for Heavenly and the Tahoe region, told NNBW that affordable housing and transportation are hot topics among all resort operators – and it’s a crisis situation in many areas.

“It’s a key part of our business strategy now,” Fortune said. “We have a department within our corporate structure that deals with housing across all our communities, and we have a Tahoe-specific manager whose full-time job is managing our housing and looking for new opportunities.”

Dee Byrne

 

Dee Byrne, president and chief executive officer of Palisades Tahoe, said the resort also had to adjust its business strategy to sharpen the focus on providing increased housing options for resort employees.

“We needed to go from a business operating plan where we didn’t provide housing for seasonal employees other than on a small scale to a larger scale in order to attract and retain employees,” Byrne said. “As the (housing) market shrunk here in Tahoe, our need exacerbated, and it was really post-COVID.”

A number of dynamics came into play following the pandemic. Many Tahoe-region properties that used to be seasonal or long-term rentals for resort staff were turned into short-term vacation rentals, reducing available housing inventory for resort employees. And as the pandemic forced thousands of well-paid tech industry workers out of offices in Silicon Valley, San Francisco and elsewhere, Lake Tahoe became a desirable place for remote work. Property prices skyrocketed as a result.

Lake Tahoe’s largest resort operators adjusted by purchasing additional housing assets and increasing their number of master leases on rental properties that are sublet back to employees.

Palisades Tahoe last year acquired the 30-room Tahoe Vistana motel in Tahoe Vista, along with an eight-room cabin-style property in Kings Beach. Tahoe Vistana can house up to 50 employees, while the Kings Beach property can house just over 20, Byrne said. Palisades Tahoe also owns and rents 13 apartments in Olympic Valley, and it has leases during winter months with the U.S. Forest Service for employees to camp on 23 sites.

“These properties have been a game-changer,” Byrne said. “Expanding our housing footprint has provided us with stability, which directly correlates with stability for our staff.

“This is definitely a game-changer, but it’s not a silver bullet because it’s not enough rooms for the demand we are seeing,” she added. “We still have quite a waiting list.”

Tahoe Vistana was built in 1960 on nearly four acres and contains a mix of room types, from standard motel rooms to a two-story cottage and a manager’s residence. A handful of the rooms have kitchenettes. The property was listed for sale at $1.37 million.

Resort housing isn’t just for seasonal employees, Byrne added. Year-round employees who demonstrate a need also may have housing provided by Palisades Tahoe.

Tom Fortune

 

“We help them out until they can integrate into the community and find their own stable housing,” she said.

Palisades Tahoe employment ramps up to nearly 2,000 during peak season, she noted. Although seasonal employees often return for multiple years, total headcount isn’t determined until bodies actually walk through the door, Byrne said.

“We rely on all these seasonal employees, and if they don’t have a place to live, then they are not going to stay, or they won’t show up when you are counting on them. In this industry, we like to say that we don’t count on (employees) until we see the whites of their eyes.”

Palisades Tahoe has a longer-term housing solution in play with plans for a 350-room workforce housing project at the entrance to Olympic Valley, but that project is tied to Palisades’ general plan to redevelop properties across Olympic Valley, Byrne said.

“(Workforce housing) will be the first project that we do, and I am incredibly excited that it might be in our near-term. We have been waiting literally a decade for this to happen.

“Logically, the earliest we could get going on the housing project is spring of 2025,” she added.

Over on the South Shore of Lake Tahoe, Vail Resorts has invested $175 million across all its resorts to bolster the employee experience, Fortune said. In addition to a $20 hourly minimum wage, a large part of the resort operator’s initiative includes providing increased housing and transportation options for resort employees.

During peak season, employment at Heavenly and Northstar approaches about 1,500 people each, while Kirkwood ramps up to about 950, Fortune said.

“In 2022, and even prior to that, we had a lot of challenges with staffing at our resorts that were wage, housing and transportation related,” Fortune said. “We addressed it in multiple ways.

“Heavenly has housing it has owned for many years, and it also has long-term master leases on multiple motel properties in South Lake Tahoe that house employees of both Heavenly and Kirkwood. We have made improvements with new furniture, beds and flooring, and it’s worked out really well for us.”

Altogether, Fortune said, Vail Resorts controls about 450 beds in the Lake Tahoe region. Lodging options serve dual purposes: It provides housing for employees and also serves a recruitment tool for potential employees. Housing options are split equally among different business departments to ensure beds aren’t not skewed in favor of one department, Fortune noted.

“It’s made a big difference in our ability to staff and have full operations at our resorts,” he said. “It’s also a big part of our hiring process. We have a centralized hiring process for all of our resorts, but we also have a lot of local hiring. In our centralized hiring, housing is one of the first ways we fill our roles with people coming from outside the area. If they need and can get a bed, those roles get filled first. It ensures we can operate our lifts and run our restaurants.”

Fortune said that after the ski season wraps up, typically in April, Vail Resorts sublets some motel rooms to golf courses and other businesses that see a spike in business during the summer months, which helps offset master lease expenditures.

Palisade’s Byrne said that its master lease program has actually been more beneficial than direct property ownership. Palisades works directly with property managers to execute master leases and sublets housing assets back to employees at below-market rental rates.

“We have developed a good reputation as a landlord, and we are working with quite a few people throughout the community who like the consistent income and security that our rent brings,” Byrne said. “We are able to subsidize our employees in that arrangement. Generally speaking they are not paying (market rent). It’s part of our budget to support them that way so that the room or bed is affordable.

“Tahoe can’t retain its reputation and be the destination it wants to be if we don’t have the workforce and housing to support it,” she added.