Vail Valley economy: Vail may be quicker to rebound
VAIL, Colorado ” When will people start taking more ski trips? When will they spend more on those ski trips? Buy big second homes? And when will locals freely open their wallets at local restaurants and shops?
In short, when will the local economy turn around?
“That’s the $64,000 question, and none of us have a crystal ball,” said Vail Mayor Pro Tem Andy Daly, who has spent a career in the ski industry.
Some local leaders are making prognostications about what’s in store for the economy over the coming months and years. Those predictions are largely in line with what national politicians are saying ” there’s a reasonable chance that recovery could come in 2010.
Many leaders also note that Vail is doing better than other resort towns, and the valley could see a recovery sooner than rival resorts.
Daly said it’s likely that next winter Vail will again consider a marketing campaign similar to this year’s “Vail All the Love,” which poured an extra $550,000 toward marketing Vail’s ski season in anticipation of an economic slowdown.
“This year is definitely being severely impacted,” Daly said, adding that high-end stores such as jewelry and clothing stores seem to be suffering the most.
The numbers back up Daly’s assertions. Sales tax collections in Vail were down 6.5 percent in December compared to the previous year. Business at a representative sample of Vail Village businesses was down 17.4 percent in November and December compared to last year, according to a recent study by the town of Vail.
Those patterns are mirrored across Eagle County. Sales tax collections were down 10.1 percent countywide in December compared to the previous year.
Vail Resorts CEO Rob Katz, operator of Vail and Beaver Creek mountains, said the company won’t be immune from the national economy.
“I think it’s nervous, every time you see bigger company laying off folks. There’s no question jobs have to stabilize before we’re going to see the economy pick up,” Katz said earlier this month in an appearance on CNBC’s “Squawk Box.”
While the company does have a “core group” of skiers that are passionate about the sport of skiing, Vail Resorts is still going to be affected by the wider economy.
“In terms of seeing some real growth going forward, you have to see the job situation improve,” Katz said.
Vail Resorts is the largest employer in the county, and its Eagle County ski resorts brought 2.49 million “skier visits” here last season.
Don Cohen, an Edwards resident and retired high-tech exec who is executive director of the Economic Council of Eagle County, said he thinks 2010 isn’t going to be great for the local economy, and 2011 is more realistic for a recovery date.
“We have a year and half to two years of a very challenging economy” ahead of us, Cohen said, but added “I think it’s fair to say that nobody really has any perfect wisdom as to when the storm is over.”
The population of the Vail Valley ” which nearly doubled in size between 1990 and 2000 and has continued to grow at a smaller rate this century ” may actually shrink in size over the next few years as more people move away when their jobs disappear, Cohen said.
On the bright side, Vail seems to be doing less bad than other ski resorts ” and, some say, will be able to rebound more quickly than other resorts. While Vail’s sales tax revenue was down 6.5 percent in December, it’s doing relatively well compared to other ski towns. Aspen, for instance, was down 19.2 percent.
Vail and Beaver Creek benefit from their proximity to Denver, which provides a steady stream of visitors to the resort, said Michael Kurz, president of the Vail Valley Partnership, a chamber of commerce that includes some 1,000 businesses.
“That puts us in a better position than some of the remote resorts,” Kurz said.
Kurz said he’s seeing some local businesses fold and others cut back on costs. He advises businesses to get back to basics, focusing on loyal clients, settling in for a downturn that could last another 18 months.
The Vail Valley will definitely see more small businesses shut their doors before things get better, Cohen said.
“We’re not finished feeling the pain yet,” Cohen said. “It’s getting to the point where it’s getting very personal in a small community of 40,000 or 50,000 people. None of us are going to be immune from knowing a friend or relative who’s undergoing tough times. There’s no nice way to sugarcoat that.”
Staff Writer Edward Stoner can be reached at 970-748-2929 or firstname.lastname@example.org.