Lodges lead leap in Vail business | VailDaily.com

Lodges lead leap in Vail business

Cliff Thompson
Members of Roaring Fork Outdoor Volunteers work on the new Smith Trail in the North Star Preserve. Daniel Bayer photo.

Driven by a 34 percent jump in lodging, Vail’s June sales tax collections showed a healthy 12.5 percent gain.

But tempering that good news is the fact that Vail’s sales tax collections at the halfway point of the year are down 5.5 percent compared to last year. That decline in sales tax collections is a continuation of a trend that started nearly a decade ago, forcing Vail’s town government to downsize its annual budget. Some of Vail’s oldest businesses also have seen a drop in sales.

The decline is believed to have been caused by a combination of increasing competition from downvalley businesses, an aging resort and by a shift in the population away from resort areas. It’s a major red flag to the business community here because surveys of visitors indicate that shopping is the second most popular activity, after skiing.

It’s doubly significant when nearly half of the town of Vail’s budget is based on its 4 percent sales tax.

Whether the increase in June represents the beginning of a trend or a statistical anomaly will be determined when the rest of the summer’s sales tax collections are recorded.

The June statistics at least seem to indicate an end to the short-term hangover from war and terrorism worries that hurt tourism in the second half of the ski season; collections townwide totalled $738,1262 versus $656,026 the previous year.

Restaurants were pretty busy during June with overall sales tax collections up 15.7 percent. Retail sales rebounded and were up 6 percent.

Business in Lionshead virtually exploded in June because there were more hotel rooms this summer than last. Sales tax collections in Lionshead were up 45 percent overall, but food and beverage sales were a whopping 121 percent of last year’s total while lodging was up 62 percent.

Curiously, retail sales in Lionshead were down 5.6 percent. With the exception of Vail Village, where retail sales were up 5 percent, retail sales across Vail were down or flat.

One of the driving factors for the improved numbers is more hotel rooms have added this year. The expanded and remodeled Marriott is seeing its first full summer of operation in two years.

Another factor that probably helped June’s sales tax numbers was the Teva Mountain Games, which was moved to the first week of June from Memorial Day weekend, where the event has been held for the last eight years.

That event brought 800 competitors, spectators and even Teva’s top brass here for an annual meeting during what is normally a soft spot in summer business.

One more factor that may have had an impact was the sinkhole that caused the closure of portions of Interstate 70 in East Vail for nearly a week while crews repaired it. Traffic flow was quickly restored, but news that the sinkhole had forced closure of the interstate persisted.

When that happened, area marketing organizations and businesses made an extraordinary effort to counter the news that you couldn’t drive to Vail.

“When the sinkhole happened there was a (large) proactive effort to get the news out that you still could get to Vail,” said Ian Anderson, communications director for the Vail Valley Chamber and Tourism Bureau. He also said the community has begun to engage in more aggressive marketing.

Sales tax collections, for the first six months of 2003, have declined throughout Vail:

– Vail Village, down 5.7 percent.

– Lionshead, down 3.2 percent and are down 3.2 percent.

– West Vail and Cascade Village, down 3.2 percent.

Vail’s retail fortunes have been the subject of a series of business community meetings aimed at energizing Vail’s flagging economy. Meeting participants have been busy highlighting things that are working and those that are impediments to business.

A report on the findings generated during the meetings and a series of recommendations on how to revitalize Vail’s business community will be forwarded to the Town Council.

Cliff Thompson can be reached at 970-949-0555 x450 or cthompson@vaildaily.com

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