More Vail Valley businesses cutting back, report says
Just last ski season, small business owners in the Vail Valley were scrambling to find workers. But last ski season was a long, long time ago.State figures show the national economic slump finally drove Colorados economy and the Vail Valleys economy into an official recession in last quarter of 2008. Right about that time, the Economic Council of Eagle County did its annual survey of local businesses. As answers came back through November and December, the results showed business owners growing increasingly worried about 2009.When the results were tallied, 94 percent of small business owners said they believed 2009 would be worse than 2008, while 77 percent of the larger employers believed harder times were coming.Harder times have come, of course. Local unemployment didnt fully recover from its most recent off-season peak. The most recent figures from the state, for December, show local unemployment at 4.6 percent.On the other hand, the most recent state figures for apartment vacancies show theres essentially no place to rent. In fact, just more than half of those surveyed at the end of last year said the availability of housing negatively affects their businesses.Whether more people out of work turns into more apartment vacancies is anyones guess, economic council director Don Cohen said. And, he said, he doesnt expect real estate values to fall enough to have a real effect on affordability.But, he added, he does expect to see people leaving Eagle County over the next year or two.Some of those people will be laid off and leave. Others will be business owners who close their doors and move on. Many, of course, are doing everything they can to keep the doors open.Trying to hang onThe report shows more small businesses in 2008 paid their workers less than the industry standard about 20 percent as opposed to just 4 percent the year before. Thats something generally done out of necessity, Cohen said.Small business owners are often working on a hand-to-mouth cash flow, Cohen said. These days theyre asking what the absolute minimum is they can pay to keep the doors open.While a lot of businesses are cutting now, Cohen said some wait too long before acting.Everybodys looking for the bottom, and I dont thing weve hit it yet, he said. Using the analogy of a knocked-down boxer, Cohen said were still falling in slow motion and havent hit the mat yet.Chris and Michele Evans, two of the three owners of Evans Chaffee Construction, said they saw the current slump start early last year. In an interview for another story, Chris Evans said that company started trimming in March of 2008, and is currently at about 20 full-time employees.Everyone who worked for us was able to find another job, Chris Evans said.Michele Evans said shes been planning for the last 18 months about ways to diversify the companys business to ride out the slow times. That plan includes setting up a disaster-restoration division.There are going to be good times again, but we need to plan for it, Michele Evans said. When those good times will return, though, is anyones guess.A sense of uncertaintyThat uncertainty is helping drive pessimism, Cohen said.Many small businesses, especially those in the resort areas, keep asking how bads it going to get, Cohen said. And when that happens, theres a human psychology that tends toward pessimism.Linda Hill owns Hill & Company, a local advertising and marketing company that has a lot of clients in the tourism and hospitality business. In an interview earlier this week, Hill said its important for people in the resort business to keep their names and promotions in the public eye.Our clients are concerned, Hill said. But one thing they havent done yet is cut back on marketing.The people who can maintain their marketing will be the ones who are best prepared when the slump ends, Hill said.Cohen agreed that businesses surviving this slump will probably be stronger on the other side. But, he said, theres a real danger if business owners dont recognize how tough the times are right now.We need to communicate frankly about whats not good right now, he said. We could be back to the times like the late 1970s. I was just in college then, so this is the first time in my life Ive had good friends lose their jobs.Business Editor Scott N. Miller can be reached at 748-2930, or email@example.com.
To link to the full report, go to http://www.economiccouncil.biz
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