Vail Valley Voices: Outreach to the world
Vail, CO, Colorado
Editor’s note: The following is an excerpt from the Vail Homeowners Association monthly report for June. We plan to publish weekly excerpts from the association, which keeps a close eye on economic and political trends in and outside of the town. The newsletter electronic version with links to supporting documents is available at http://www.vailhomeowners.com.
If, as some forecasters suggest, Vail and Beaver Creek move to compete more aggressively in international markets, the recovery rate could jump to 3 percent to 5 percent annually.
They say that traditionally, international guests spend twice as much and stay twice as long. Conversely, since the beginning of the recession, domestic guests are prone to bargain shop and haggle over prices.
Vail is now in the position to begin rebuilding its high-end clientele now that its physical renewal is coming to a conclusion.
International strategy faster and more cost effective to implement: Decisions to globalize Vail’s reach can be put into motion far faster and more broadly than has been the case in the past.
In contrast, other proposed domestic economic development initiatives are seen by some as very costly, long term and highly speculative.
Existing town of Vail economic development programs, with a $2 million annual budget, are aimed primarily at the Denver Front Range drive-up market and a very limited number of domestic-air-access urban centers.
There are now several new internationally branded hotel properties that bring Vail and Beaver Creek into the worldwide reservation and marketing networks.
These hotels have the wherewithal to immediately begin a coordinated global initiative. A trade association formed among franchised hotel properties and local lodges that also cultivate international markets would be a potent new economic development force in the view of some business analysts. Some see the beginnings of a possible collaborative approach in Vail Resorts’ Epic Pass offer for free summer skiing at the Las Lenas ski resort in Argentina if they book lodging at participating hotels.
Air access is essential to the growth of both domestic and international destination guest markets. Direct access to the Eagle County Regional Airport is highly desired, as it avoids the weather, travel and traffic complications of Interstate 70 and Denver International Airport.
Since beginning commercial air service, the Eagle County airport has grown over the past two decades into the third-busiest airport in Colorado.
Currently, 50 percent of all out-of-state destination guests to the Vail Valley arrive by air via the Eagle County airport.
Local air-service planners say that recent runway improvements increase the profitability of airlines serving the airport, which opens the potential for new flights from domestic-international hub airports throughout the United States, such as Washington, D.C.-Dulles.
Direct flights from Mexico and Canada are now feasible. Nonstop inbound international flights (with a one-stop outbound flight for fuel) beyond North America become a realistic possibility, raising the question of from where and why.
Pre-screening through U.S. customs is increasingly occurring at international airports accessing the United States. Even so, some international flights will require a port-of-entry terminal with customs.
Eagle County airport authorities say that an unused terminal can be converted for $3.5 million to handle international flights. According to informed sources, necessary airport improvements can be made quickly and underwriting of international flights done efficiently.
Air-service operational costs and subsidies – who pays? Then there are the operational costs of U.S. customs and pump-priming underwriting required by the airlines to add new routes into the Eagle County airport.
There are those who say by investing in international air service, the town of Vail and others who subsidize the effort would see a faster and higher return on investment than through other economic development proposals.
Also, expanded air access is needed to improve the likely success of other nationally directed development programs. It is common practice, once an airline reaches profitability of a particular route, to drop the initial subsidy.
Unlike other less lucrative Front Range- and niche-marketing proposals now on the table, the economic cost-benefit can be directly substantiated for both international and domestic air service through “origination and destination” data provided by the airlines. Collaboration among users is key to the growth and management of the airport.
Further and faster “destination guest” market development: In the wider perspective, the sequencing of public investment is the issue of the day. Improved air service will expand the numbers of high-end international destination guests, who in turn will require more specialized recreational and cultural venues. Continued investment in real estate is also needed, all of which sustains the work force.
Some industry sources say the economic productivity of a move into international destination guest markets could begin this coming winter season.
Eagle County airport officials say they can have an international terminal open and in operation by the winter season of 2011. Its growth is dependent upon the aggressiveness of a collaborative multi-seasonal strategy over the next three to five years.
This is in contrast to other important economic initiatives that as currently proposed will require far greater investment in the construction of new facilities and will, as some believe, take longer to prove their effectiveness.