Vail economic recovery is strong
July 18, 2014
By the numbers
70 percent: The proportion of Vail’s annual sales tax collections that come during ski season.
26 percent: Gain in Breckenridge sales tax collections in 2013 over 2008.
11 percent: Gain in Vail sales tax collections in 2013 over 2008.
$173: Average daily rate for summer lodging in Vail.
$186: Average daily rate (on average) of competing mountain resorts.
VAIL — Mountain resorts have recovered in many ways from the financial bust of 2008 and the slumping economy. Vail has been one of the leaders in that recovery, but other resorts are actually doing better in some ways.
The town of Vail recently hired RRC Associates, a Boulder-based market research firm, to create a competitive analysis that compares Vail to other mountain resorts. Company representatives recently presented that report to Town Council members and residents.
For this survey, the competition is fairly obvious. Other studied resorts included Breckenridge, Telluride, Aspen/Snowmass, Steamboat Springs, Park City, Utah, and Jackson, Wyoming.
Vail is doing pretty well in many ways compared to other Colorado resorts. Since the 2001-02 season, Vail's share of the Colorado ski market has grown slightly, from 13.8 percent to 14.5 percent. That's the biggest share of any resort in the competitive group, although just more than Breckenridge's 13.5 percent.
Vail and Breckenridge are essentially tied for a share of national visits to ski resorts, at 2.9 percent. Aspen trails slightly at 2.6 percent. During the past five years, Vail has led the state in skier and snowboarder visits, at just more than 1.6 million per year on average.
But Park City's resorts are collectively the big dog in the RRC competitive survey, with an average of 1.85 million skier visits per season.
The Park City resorts, a short drive from a major airport in Salt Lake City, also do better in terms of air service and sales tax revenue. That's to be expected, given the sheer convenience of getting there.
In Colorado, we worry about things like air service, since airlines have to be persuaded that there's a business case to fly into resort-area airports.
While traffic at Denver International Airport has grown in passenger traffic since 2002, with a slight dip in the bust years of 2008 and 2009. The Eagle County Regional Airport, meanwhile, has seen passenger traffic drop 25 percent since the peak season of 2007-08. With the exception of Aspen, other mountain resort airports have seen similar declines.
As you'd expect, summer traffic in Colorado resorts lags far behind winter traffic. In Wyoming, the airport at Jackson is far busier in summer, since it's the closest airport to Yellowstone, the nation's most-visited national park.
The good news is that Vail and Breckenridge are easily accessible from Interstate 70. The bad news is that weekend traffic on the highway can add hours to a trip, especially back to Denver.
Still, people come, and in Vail, they tend to spend a good bit of money on lodging.
Occupancy and rates
Vail's winter occupancy is tops among Western resorts during ski season, but neither Vail nor its competitors have recovered from the peaks seen in the boom years from 2005 to 2008. Last season, Vail's lodges, on average, were 57.5 percent full of paying guests. The number of the competitors measured was 43.5 percent.
Vail's average daily rate also topped the average of its competitors, and by a healthy margin. While Vail's average rate of $443 per night topped the competitive set's $331, Vail was actually second in average daily rate over the past ski season.
Vail's numbers change dramatically in the summer. Vail's average daily rate is actually below the competitive set in the summer, although its summer occupancy numbers lead the average of all its competitors.
That difference in lodging rates between summer and winter also means a difference in revenue collected. In Vail's case, roughly 70 percent of all sales tax collections come during the ski season. That split is about equal to that of Park City (68 percent) and Breckenridge (64 percent). But Aspen, Steamboat and Telluride all come closer to an even revenue split between seasons. In fact, Telluride actually collects more sales tax revenue in the summer than in the winter, thanks in large part to its large music festivals.
Bottom line time
Sales tax is what funds municipal government in Colorado, so more of that means more money for services and amenities for residents and guests. In that measure of success, Vail is doing well. But so are other resort communities.
Vail in 2013 surpassed its previous revenue high point of 2008, exceeding by 12 percent revenue collected in the last year of the last decade's boom. But Breckenridge (26 percent) and Telluride (15 percent) have had stronger recoveries. Vail's recovery from the slump actually puts it on par with Aspen, Snowmass and Avon (all between 10 and 12 percent) and quite a lot better than Steamboat Springs (down 5 percent from 2008) and Beaver Creek (down 13 percent).
What it means
All this points to the need for continued economic development in resort areas. Skier numbers nationally have been static for more than a decade. Eagle County's population is expected to double in the next 20 years or so. That means summer may hold the key to maintaining the valley's prosperity in the long run.
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, email@example.com and @scottnmiller.