Decline in foreign visits to the United States, and Vail, due to economics, travel costs, politics
August 25, 2018
EAGLE COUNTY — While the local economy is robust, there could be signs of concern on the horizon.
The Vail Town Council recently looked at 2019 budget forecasts showing only modest growth.
There are a number of reasons for that caution, one of which is some weakness in foreign visitation.
Foreign visitors, especially those from Mexico and South America, have long been an important part of Vail's financial picture. But those visits seem to be cooling.
Mike Brumbaugh owns Venture Sports. That business has several locations, including stores in the Hotel Talisa, The Sebastian and the new Lion condominiums. All three of those properties are owned by, or are popular with, Latin American interests.
Brumbaugh said foreign visitors make up a big part of Venture Sports' business, especially in the winter. Those visits the past couple of years have been "flat to down," he said.
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Ralf Garrison is a longtime resort industry analyst and consultant. He said that nationwide, there's been a decline in international leisure travel into the United States.
Garrison said there are three main drivers of foreign visits to this country: economics, the cost of transportation and geopolitics.
For the past few years, economics has played a large role in how much a vacation to the United States costs.
Over the past few years, the Euro has lost roughly one-third of its value against the dollar. The Mexican Peso has lost almost half its value against the dollar since 2008.
That means it's more expensive for visitors from Europe and Mexico — along with most other countries — to visit the United States.
Perhaps just as important is politics. Garrison said that in the past 18 to 24 months, many international visitors see the Untied States as not a particularly welcoming place to vacation. People aren't coming as a result.
Tom Foley, of Inntopia, formerly known as Destimetrics, added that there's been a change in the perception of the United States as a friendly place for international visits.
Still, Foley said, the high-end travel market — one which the Vail Valley caters to — hasn't been particularly hard hit by either the Great Recession, current economics or politics. But that applies to high-end travelers.
Things are different when marketing to the merely well-off.
Foley said with the added expense of traveling to the United States, there's an opportunity to market to a domestic audience. But, he added, there's a lot of competition for that audience.
"Travel abroad is a bigger opportunity for the domestic market now," Foley said. Additionally, competition for domestic visitors goes far beyond mountain resorts. Competition also comes from places including Disney World, Sea World and cruise lines.
Foley added there's also an "aggressive fight for non-luxury foreign travel."
That means destinations have to be smart in their marketing.
Garrison said Vail Resorts, particularly when it comes to Vail, has long worked to appeal to international travelers.
The resort company is "trying to position Vail as the cream of the crop in the world," Garrison said. The problem, though, is there aren't very many of those high-end guests, and competition for them is fierce.
Garrison noted that in the past 18 to 24 months — roughly since the election of President Donald Trump — visitors from Mexico and South America have been traveling more to Canada. Politics plays a role, but so does the fact that a peso goes farther in Canada than it does in this country.
While Foley, Garrison and other analysts look at broader trends, Brumbaugh's business is far more specific. In his view, economics and politics play a secondary role to the factor always in play in mountain resorts: weather.
"Last winter especially, we've had poor snow and there's been good snow in the Northwest. That's why they're strong," he said.
Vail Daily Business Editor Scott Miller can be reached at email@example.com and 970-748-2930.