Vail Valley Voices: Bloom off Vail’s marketing rose?
Vail, CO, Colorado
Editor’s note: The following is an excerpt from the Vail Homeowners Association monthly report for October. We publish weekly excerpts from the association, which keeps a close eye on economic and political trends in and outside of the town. The newsletter’s electronic version with links to supporting documents is available at http://www.vailhomeowners.com.
At the conclusion of a recent consultant review of the results of the $2 million summer marketing effort to the Vail Town Council, the collective mood of the presenters and the council was glum.
The results of their data indicated that town sales tax revenue gathered through July for the summer months increased by only 1.5 percent. The amount keeps pace with the rate of inflation, but did not reach the forecasted 2.5 percent-plus target.
The hoped-for results were anticipated to be much higher, given that each weekend during the summer, town-funded special events filled downtown with throngs of drive-up visitors from the Front Range. The crowds, some believe, were more frugal than expected, spending mostly on food, beverages and lodging.
July sales tax receipts increased over 2009 by 6.9 percent, and August was up 6.3 percent, but sales taxes were projected to move 2 percent to the negative for September. Other projections differ; time will tell. Year to date, all town revenues are increasing over 2009.
It is reported that Aspen, even with its high percentage of vacant stores, is experiencing an increase in the sale of luxury goods well beyond Vail’s, which has few shuttered storefronts. Aspen’s retail vacancy rates are said to be due to many national brands opening prestige outlets during the boom, which could no longer be justified in the recession.
The Vail Local Marketing District Advisory Committee is responsible for guiding the town’s summer marketing effort. They forecast a year ago, in their 2010 summer marketing strategy and budget proposal, that they could increase sales tax revenues by 1 percent over the current rate of inflation.
Recently, the marketing consultants and hired staff presented the 2011 market program and budget request. Not many new marketing initiatives or budget changes were recommended. The same target for sales tax revenue increases were given for the summer of 2011 initiative as were projected for the 2010 marketing strategy. There were few members of the marketing district’s advisory committee present.
It was reported that for the highly promoted “sports ambassador” health and wellness summer campaign, only 25 participants responded to a running clinic showcasing a nationally recognized professional athlete as an instructor. The response to a women’s running clinic was even less.
In the opinion of a local triathlon competitor, the organization and promotion of another planned running event was handled inappropriately, resulting in cancellation for lack of participation.
Even though similar clinics and programs have been held in Vail over the years, the marketing district consultants say they have “laid the groundwork” for an even more aggressive health and wellness push next year.
It was announced during the course of the presentation that the committees’ long-time public relations executive had recently resigned. A request for qualifications to fill the vacancy is being circulated by the town of Vail.
Reportedly, the resignation was in response to a change in mass communication strategies, which will move heavily into “layered” social networking using Internet-based social media to attract and serve customers. The shift is away from reliance upon traditional print media.
Some see this as a first signal that a meaningful shift towards attracting a larger international cliental may be under way in the community’s marketing strategy. Early results from the community’s 2010-11 winter season international marketing effort are showing a significant increase in business booked from Australia. The rapid growth of several Latin American economies is also attracting the interest of Vail marketing executives who have an international perspective.
Vail’s real estate better off than competitors: Some analysts predict the town of Vail, as the center of a larger resort region, will recover faster than its competition.
There is a difference of opinion among local Realtors as to when the significant inventory of available real estate will be sold, turning a buyer’s market into a seller’s market.
Those with the most optimistic view say at the current rate of absorption it will take 25 months to reverse to a seller’s market. That is being viewed as a signal of when private development will resume in earnest. These assertions preceded the announcement of a $9.5 million, 11,000-square-foot Cordillera mega-mansion going on the no-minimum “absolute” auction block.
Other analysts view the data differently. The current rate of sales per licensed Realtor remains near the 2009 decade low. If the current conditions remain, some predict there will be many career and location changes in the local real estate profession.
Some say that the market in the town of Vail should not be viewed in isolation from the surrounding region. When the region is taken into account, it is expected that the sell down of properties now on the market will be replaced with those who are holding their properties off the market.
Likewise, a significant inventory of competitively priced property within an easy commute will draw off those who find Vail’s comparables too pricey. Until consumer pessimism and unsold inventory are overcome, pricing won’t incentivize new development.
Currently, all major development projects under construction are headed to completion, most by year end. Solaris has filed a $4 million suit against the project’s contractor for allegedly overcharging.