Business continues slump in Vail |

Business continues slump in Vail

Cliff Thompson
As winter approaches, sales-tax revenues in Vail are down, though there was a surge in collections in the Lionshead area, driven by earnings in the lodging sector.

The decline in sales tax collections in Vail this year is a continuation of a trend begun nearly 10 years ago that is both a cause and effect of the westward migration of locals out of Vail toward cheaper housing. Another factor harming business is the increase in competition from businesses in Avon, Beaver Creek and Edwards.

The combination of a national recession and that increased competition has resulted in some empty storefronts in Vail and elsewhere. Two “big boxes,” Wal-Mart and The Home Depot opened in Avon last summer, drawing customers there.

Surprisingly, Lionshead experienced a mini-boom at the end of the summer.

“Vail Village was absolutely dismal,” said Ghi Qui Hoffman of the Laughing Monkey, who has been running retail stores in Vail since 1975. Hoffman said she felt Lionshead’s renewed bed base was helping retail activities there. Lodging taxes were up 70 percent.

A new bed base in the village should help business there.

“It will help the village to have new hotel comes on line,” she said. “The Front Door project and streetscape will help.”

September’s sales tax collections declined from $716,271 to $666,954. The decline is significant because sales tax provides nearly 50 percent of the town’s annual operating revenue. The town council has pared nearly $1 million per year over the last two years from its $34 million budget.

Food and beverage sales showed the largest decline, 11.9 percent, while lodging showed the least, 3.2 percent. Retail sales, the largest sales-tax category dipped 5.1 percent, from $293,551 last year to $278,455.

Two small categories of retail sales, sports items and liquor sales, bucked the decline and showed a 6.8 and 3.1 percent increase, respectively, but contributed only an additional $4,978.

Purchases of gifts, jewelry and food also showed sharp declines in September. Sales-tax collections on food were down nearly $13,000, or 13.9 percent, while jewelry sales declined 29.8 percent, from $20,831 to $14,626. Gift sales, meanwhile, were down 37.9 percent, from $9,808 to $6,086.

Sales in only Vail Village suffered, down 16. 1 percent, while Lionshead’s numbers surged upward by 35.1 percent.

Sales-tax revenue in the village declined from $309,901 to $206,133. Lodging decreased 21.8 percent while retail sales were down 12.9 percent and food and beverage sales were down 15.7 percent.

Lionshead had a good September with lodging sales tax collections up 70.2 percent, from $23,664 to $43,839. The increase reflects the return of the remodeled Marriott Mountain Resort to the market after an extensive renovations following a 2000 fire.

Retailers in Lionshead also experienced a good September with collections up 20.8 percent, from $36,299 to $43,839. Sales-tax collections from restaurateurs were up 27.5 percent, from $25,230 to $32,173.

Sales tax collections in East Vail, West Vail, Cascade Village and Sandstone were down 17.2 percent, from $199,695 to $165,400.

For Loren Gifford of Vail Valley Ace Hardware September provided a small rebound, though he said his business has been hurt by the opening of The Home Depot and Wal-Mart,

“We were up 10 percent,” he said. “But October is close to the worst month since Home Depot opened.”

Gifford said the warm weather in October hurt his fall business which typically is better in bad weather. Hoffman, on the other had, said her October was good because the mild weather allowed her Front Range customers to come up to the mountains.

“A lot of our off-season business is due to the Front Range,” she said. “When the weather is nice these people are coming up here and shopping.”

Vail’s economic malaise led to a series of business meetings last summer to discuss ways of turning the town’s business fortunes around. Several volunteer committees are working with the town to create a more favorable business climate for the town – one with fewer regulations and a more business-centric climate.

One of of the group’s initiative is to have windows of empty storefronts decorated with art instead of being whitewashed or papered over.

Cliff Thompson can be reached at 970-949-0555 x450 or

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