Vail economic recovery in sight? |

Vail economic recovery in sight?

Lauren Glendenning
Vail, CO Colorado

VAIL, Colorado – As much as Ralf Garrison hates saying phrases like Vail is doing “less bad,” or lower revenues are the “new normal,” he can’t seem to stop saying them just yet.

Garrison, an analyst with the Mountain Travel Research Program, told Vail Town Council members Tuesday that things are looking up this year over last year, but at an expense.

Garrison has said before that lodges are essentially buying their guests by dropping rates. Occupancies in Vail hotels this winter are up 5.1 percent over last year as of the end of January. The final number could change, but compared to the resort lodging industry as a whole, Vail is, ahem, doing “less bad.”

That being said, Vail is doing worse than the industry as a whole in terms of rates. Vail has dropped rates more than average than the overall industry, but Garrison said there are benefits in doing so to create more occupancy.

Garrison said the combination is working for Vail and the proof will come when January sales tax revenue numbers come in.

“Some encouraging signs are that we’re getting more folks here and they’re spending more once they arrive, which ought to bode well for sales tax revenues,” he said.

Vail Homeowners Association executive director Jim Lamont questioned whether the so-called encouraging signs of higher occupancies combined with lower rates is good for business into the future. Lamont said that once discounting has become a normal behavior, which it has, it “prolongs the economic recovery because then the consumer expects discounting to continue.”

Garrison agreed that scenario is a potentially negative side effect of enjoying the higher occupancies at the expense of rates.

Garrison told the Town Council that consumer confidence, looking ahead about six months, is up.

“Our consumers are more optimistic about the future than they are about the present,” Garrison said.

The confidence isn’t something to jump up and down about yet, though. The economic environment is continuing to evolve, slowing growing toward a recovery, Garrison said.

That recovery, however, will come more slowly, and it “won’t feel as good” as previous recoveries have felt.

There’s no inherent demand coming from the marketplace – more demand has to be earned, he said.

“You can earn it by putting special promotions out there, and adding value,” Garrison said.

The pace of reservations for future months taken in January of this year compared to last year is up 10 percent, which Garrison said is “some positive momentum to look forward to.”

There’s also evidence that Vail, along with a lot of other resort markets, is creating certain behaviors, specifically last-minute booking behaviors. The industry has decided that guests are booking later, thus rearranging marketing strategies to capture that new behavior. Garrison is skeptical that last-minute booking is as big of a market trend as people think.

“There’s a modest change in this year versus last year,” Garrison said. “Maybe the shift is not coming as much from the marketplace as much as it is from our own self-fulfilling prophecy.”

Garrison said if the industry had a magic wand, it would create more demand in the marketplace. He suggests offering something other than a lower rate at hotels to get people to come to town.

That solution aligns with the town’s focus on bringing more special events to town. Councilwoman Susie Tjossem pointed out that other resort towns are doing better, so there is opportunity for Vail to improve, she said.

Community Editor Lauren Glendenning can be reached at, or 970-748-2983.

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