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Little room for growth in peak periods

By the numbers

11 percent: Growth in Vail’s average daily lodging rates from 2013/14 to 2014/15 seasons.

6 percent: Growth in average daily rates for the same periods in other mountain resorts.

0 percent: Growth in Vail’s lodging occupancy for the same periods.

5 percent: Occupancy growth in other mountain resorts.

Source: Destimetrics.

VAIL — When it comes to peak periods in the winter, Vail is essentially maxed out. That’s good news, sort of. The better news is there’s still plenty of room for growth at other times.

That’s the gist of a recent report to the town from Destimetrics, a Denver-area consulting and analytical company. Company director Ralf Garrison Tuesday spent some time crunching numbers with the Vail Town Council, and the news was predominantly good.

That good news includes the summer season, which continues to grow. But how that growth comes appears to be evolving.



Destimetrics tracks seasonal lodging occupancy and rates at 18 resorts across the mountain west, including Avon and Beaver Creek. In Vail, the company tracks companies that manage nearly two-thirds of the town’s lodging inventory.

According to the company’s most recent look at the next six months of lodging reservations, summer is shaping up to be a strong season. As of April 30, the already-booked reservations added up to more than half of the actual numbers recorded between April and October of 2014. That’s good news.



But since summer travelers tend to book rooms close to their travel dates, Garrison told the council that it appears Vail may be seeing more destination guests for the season.

Those guests, defined as people who come from out of state, tend to stay longer and spend more money during their visits. Resorts like destination guests.

Destination guests are also less dependent on weather than people traveling from, say, the Front Range. In a year with less-than-ideal snow, destination guests tend to stay in town rather than on the mountain Garrison said. That means better economic news for resort towns.



TRAVEL OUTLOOK FAVORABLE

Economic conditions also seem favorable for the resort industry over the next several months. The nation’s stock exchanges are up, as is the Consumer Confidence Index. Garrison said that means “Wall Street and Main Street” are both feeling good. That, in turn, leads people to feel better about taking vacations.

Throw in fuel prices that, statewide, are still about 90 cents per gallon lower than they were 12 months ago and the travel outlook is favorable for the coming months.

BUSINESS FROM GROUPS

Garrison said advance bookings for summer could also indicate more bookings from corporate and other groups.

People in those groups bring a couple of benefits to resort areas. First, those groups tend to book in spring or fall, when hotels are mostly empty and rates are low. Corporate groups also tend to come in the middle of the week, when lodges most need guests.

Group business is rebounding enough that some members of the Vail Economic Advisory Council believe the town needs to take yet another look at creating modern, technically up-to-date space for them.

“(Groups) want to come and we don’t have a place they can go to do what they need to do,” said Rayla Kundolf, owner of Masters Gallery in Vail and a longtime member of the advisory council.

A CONFERENCE CENTER?

Vail has tried more than once to create a conference center and has been unable to build a facility.

But “the idea of conference centers driving shoulder-season occupancy hasn’t panned out,” Garrison said.

Given the town’s history with attempts to build a conference center — the last, about a decade ago, foundered when costs escalated past the town’s ability to pay — council member Dale Bugby suggested that perhaps the theater at Vail Mountain School could be a good presentation venue for groups up to a few hundred people in size.

While town officials continue to wrestle with the idea of space for corporate, educational and other groups, the fact is that the town is running well during its peak periods.

“What we’re seeing now is that all eight cylinders are running fast and furious,” advisory council member Michael Kurz said.

But Garrison offered a word of caution about peak periods.

“Limits to your (lodging) supply are going to start to impact your ability to grow,” Garrison said. “How long will guests be willing to pay (increasing room rates), and what will their expectations be?”

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


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