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Signs of weak economy harder to find in Vail

Lauren Glendenning
lglendenning@vaildaily.com
Vail CO Colorado

VAIL, Colorado – As the national and global economies have showed more signs of vulnerability this summer, discretionary spending in Vail seems to be contradicting economic uncertainty.

The town of Vail expects to collect $1,473,143 in sales taxes for the month of July, a town record. The town also broke a sales tax collection record last December, when it collected nearly $3 million that month.

With no end in sight for the most recent domestic and European economic woes, those who study mountain resort economies have been left somewhat surprised by recent successes.



The Mountain Travel Research Program (MTRIP) recently released data that shows strong reservation activity for the upcoming winter season, despite a dramatic drop in consumer confidence and major stock market fluctuations.

Ralf Garrison, director of MTRIP, said the hotel reservations strength is “defying gravity.”

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“It appears the consumer isn’t being economically logical, at least when presented with things that they really want to do,” Garrison said.

Skiing is one of those things that consumers are passionate about, and they just might choose to spend the money on it anyway, even if it’s not the most financially sound decision.

“The conventional economic thinking that discretionary spending is depressed in (tough) economic times seems to be much less true in leisure travel,” Garrison said. “Some are flying above the economic storm and are not impacted, and other who are tangled up in a depressed market are feeling sorry for themselves and they want to go to their happy places.”



In Vail, new luxury lodging options such as the Ritz-Carlton, the Four Seasons and the Solaris Residences have meant there’s more high-end inventory in town. And because the super-wealthy have been less affected by the economic crisis of recent years, that seems to be the area where business is thriving.

“The upper part of the market continues to have more confidence,” Vail Resorts CEO Rob Katz said Thursday during the company’s fiscal year 2011 earnings report, which revealed revenue increases in every area of the company’s business except for real estate. “Our higher priced items and products are selling better.”

A coming of age?

Kelli McDonald, the town of Vail’s economic development director, said lodging occupancy and average daily lodging rates are up, resulting in double-digit lodging tax collection increases.

“More people are coming to Vail, staying longer and paying higher prices for their lodging,” McDonald said. “Cars have been on the Frontage Road 10 times this summer, and seven this (past) winter, so more guests are coming for the day, as well.”

Vail’s so-called Billion Dollar Renewal, which has made many parts of town appear new again, is a major attraction for visitors, Vail Town Councilwoman Margaret Rogers said.

“People are coming to Vail because there are all kinds of new properties here,” Rogers said.

Rogers also attributes some of the recent success to the Vail Local Marketing District, which markets Vail during non-winter months. She said the district’s efforts to recruit the Mexican market, specifically, seems to have paid off this year.

“I think we’ve had a lot more visitors from there, and they spend money when they’re here,” Rogers said.

The summer product is also more affordable and more suitable to local and regional markets, Garrison said. People can purchase a vacation on a whim because they don’t have to fly, and the weather is “just splendid.”

Garrison also recognizes the Vail Local Marketing District for creating a lot of buzz around summers in Vail, but he thinks it’s too early to know the precise reasons for this summer’s success.

“Maybe we’re seeing the start of Vail coming into its own as a mature summer destination,” Garrison said.

Garrison said Vail needs to have more months of continued success and another summer or two of continued growth before the reasons can be known.

One thing’s for sure, though – more people are coming to Vail and they’re spending more. There’s been a “relaxing of the frugality of the past couple of years,” Garrison said.

But that relaxed mentality can’t be relied upon for the upcoming winter season because consumer confidence looks a lot different now. Last winter, people really believed we were coming out of the recession and into better times, Garrison said.

“The (early reservations) results are good, but they’re defying gravity because it really is an uncertain economic time,” he said. “Consumers are nervous, and with good reason. It may be that Vail proves to be more resilient than others, but I would never recommend that one counts on that.”

Community Editor Lauren Glendenning can be reached at 970-748-2983 or lglendenning@vaildaily.com.


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