Balancing resort seasons now a ‘mandate’ | VailDaily.com

Balancing resort seasons now a ‘mandate’

DENVER — The resort landscape is always evolving, but that evolution may be headed toward rapid change in the next few years.

The pace of that change was one of the central topics of The Assembly, an annual tourism seminar produced by Destimetrics, a Denver-based resort market research and consulting firm.

The biggest change is happening now. Mountain resorts throughout the Rockies are faced with what is, ultimately, a good problem: Peak periods have gotten to the point that there are few, if any, traditional lodging units available during those times.

The other side of that problem, though, is the valleys in lodging demand. Those peaks and valleys don't add up to enough steady occupancy to make building new units worth the while of developers.

“We need to integrate all these things into communities. Balancing seasonality is becoming a mandate.”Ralf GarrisonFounder, Destimetrics

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Developers need to see a year 'round occupancy of about 60 percent before they'll start to plan new hotels. Occupancy has to hit 65 percent before a developer will build.

Average occupancy throughout the resort region doesn't approach the level to even start planning.

That leaves resorts facing a problem of increasing demand with no new supply from traditional sources.

Rent-By-Owner Market

That's where the burgeoning rent-by-owner market comes into play.

That market, led by companies including HomeAway and AirBnB, has put hundreds more condo units into the short-term rental market. And that industry will only grow.

At a session called Tomorrow Land: Fundamentals for the Future, HomeAway Vice President Bill Furlong said the number of units available is likely to grow in coming years. The past few years have seen solid growth in the sales of vacation homes, and, according to a 2013 study, as many as 77 percent of vacation home buyers plan to rent those units.

While that growth can help resorts increase lodging inventory, many units are being taken out of the long-term rental market. That has put further pressure on local rental markets for local residents.

Another way to drive occupancy — and to try to generate enough demand for more hotels — is to try to fill in a resort's lodging weak spots. That means summer, of course, but summer peaks now rival winter peak periods.

At a later session, Loving our Mountains to Death, Julia Theisen, vice president of sales and marketing for the Aspen Chamber Resort Association, said July occupancy now exceeds January's numbers.

That means resorts need to build business in the spring, as well as later into the summer and fall.

"I'll be most interested to see if this is an opportunity or a mandate," Destimetrics founder Ralf Garrison said between sessions.

'Perfect Storm'

That off-peak growth carries its own baggage.

Summer campsites can be hard to find near resorts on many summer weekends, and, while summer travelers look demographically similar to winter guests, the two groups are very different.

Theisen said that ski-season visitors often arrive by air, and many of those people don't rent cars while in Aspen. The same is true, albeit to a lesser extent, in Vail. Then there's the fact that ski-season guests spend much of their time skiing.

"They're all over four mountains (in the Aspen area)," Theisen said.

In the summer, fewer guests arrive by air, and more are on road trips in cars. Add in the fact that far fewer people are on the mountains, the result in many resorts is more traffic and more crowding in town.

At the same session, Jim Clark, CEO of the Steamboat Springs Chamber Resort Association, talked about a "perfect storm" of summer events, from tubers leaving trash along the Yampa River through town to traffic snarls and more. Those big summer groups came at the same time a long-running youth baseball tournament asked Steamboat Springs town officials to extend a contract to use town fields in coming years. The town denied that request.

Beyond growing numbers of people who may not know how to treat sensitive natural areas, there's the fact that the people who live in resorts live there for the same reasons people visit.

That's part of the current rapid evolution of the resort markets, Garrison said. That's why it's important to grow the "valleys" of lodging occupancy.

"You're not doing it just for customers," Garrison said. "We need to integrate all these things into communities. Balancing seasonality is becoming a mandate."

Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, smiller@vaildaily.com and @scottnmiller.

By the Numbers

32 percent: Number of rent-by-owner lodging clients using a service for the first time.

100 percent: Expected growth in Vail Mountain summer visitors with its Epic Discovery programs.

$3 million: Increase in town of Vail spending to support events since 2007.

$3.5 million: Annual spending on flight guarantees into the Steamboat Springs/Hayden airport.