Advantage: Highlands Inn for me.

I love both. The views can be spectacular at both. You can't go wrong unless you don't get the exact view you wanted.

Yes, there's much to be said about the inside of the two-story townhouses at the Highlands Inn with their fireplaces and two-person jacuzzis. This isn't to change your mind, but you'd have to get a room in one of the lakeside villas at Tahoe to match the townhouses at the Highlands Inn, and I'm not sure, but they may not be available to us for a free stay. I've only gotten one of those once in many Diamond stays at Tahoe -- and then I was hosting a conference. Otherwise, the views are either of Mt. Rose or a sidelong view of the lake. And of course the common areas have more to offer at Tahoe: its own casino, more dining choices, a large pool area that's usually more comfortable on summer afternoons.** As to dining, I'd have to give the advantage to the Lone Eagle Grill at Tahoe.

In sum, you can't go wrong either way. Something tells me advantage: Tahoe for your wife. (And, though the neighbors may try, there is absolutely nothing rustic about Incline.)


** Ironically, in July, the Carmel area is not so hot, literally. It's often gray. But a sunny, clear day in fall or winter is just about perfect.