Vail Valley Voices: Hotel bookings up; property sells for less
Vail, CO, Colorado
Editor’s note: The following is an excerpt from the Vail Homeowners Association monthly report in November. The Daily publishes weekly excerpts from the association, which keeps a close eye on economic and political trends in and outside of the town.
The pace of hotel bookings for the early part of the winter season are up about 8 percent compared with last year. It is estimated that Vail lodging properties have yet to book 30 percent of available room nights for December and January.
The average daily room rate for the upcoming season is projected to be slightly down from last year. Vail, when compared with 12 Western mountain resorts, is projected to outperform the others for the first half of the winter season.
In recent years, vacationers have shortened the lead time to book their accommodations, due in part to cheaper airfares. It remains to be seen if airfare increases will affect consumer behavior.
Vail reported that “gross sales” for selected lodging properties in Vail Village and Lionshead were down 33.7 percent and 17.8 percent respectively from the summer of 2008.
Retail merchants and restaurateurs weather a slow summer:
The “new normal” is taking its toll on Vail Village and Lionshead retail merchants with summer same-store sales down, from summer 2008, by 8.4 percent and 3.6 percent.
Correspondingly, restaurants reported business off by 16.5 percent and 9.3
Some businesses are reporting that they are better prepared financially this year than last because many have trimmed operating costs, bolstering their balance sheets.
Real estate values down, sales increasing:
According to the Land Title Guarantee Co.’s Market Analysis through August, average sales prices for the year in the Vail area, including East Vail to Minturn, are just above 2005 levels.
September sales volume is on the increase in Eagle County with a predominance of the transactions under $1 million, Arrowhead and Eagle being the most active areas.
Industry sources estimate that in Vail, prices have, depending on the properties’ location and qualities, lost from 20 percent to 40 percent of their peak values.
The Wall Street Journal reports that devaluation is occurring in luxury properties in other Western mountain resorts.
Across the country, the Investor’s Business Daily says, there are early indications that purchasers of luxury properties are beginning to move back into the market.
The effects of increased government regulation are tightening credit; local availability of mortgages varies by bank. Eagle County’s foreclosure rate increased 36 percent (248 to 387) from the end of August to the beginning of November but is not the highest on record.
All of Vail’s major development projects under construction remain under way.
Town of Vail and Eagle County revenues continue to decline:
The town reports all revenue sources in decline, and its projected sales tax revenue continues its double-digit monthly fall. The town has been adjusting its budget as conditions warrant.
Eagle County is experiencing a similar downturn in sales tax revenues.
Eagle County property tax assessments will not catch up to current levels of property devaluation until 2012, when county officials expect a 20 percent fall in the county’s primary source of revenues.
The county is moving now to reduce its work force. In the meantime, it will continue to collect a windfall in property tax because the reassessment preceded the market devaluation currently under way.