Vail Valley Voices: Vail leads region’s economy
Vail, CO, Colorado
Editor’s note: The following is an excerpt from the Vail Homeowners Association monthly report for September. 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 electronic version with links to supporting documents is available at http://www.vailhomeowners.com
The town of Vail estimates that real estate transfer tax revenues will not slip below their pre-boom norm of between $3 million to $4 million annually. Assuming this rate continues, with all other revenues the town is in the position of sustaining its operations, but it is limited in its ability to take on major capital improvements without dipping into its ample reserve fund.
Currently, the town has an appetite for large capital projects that could motivate it to draw down its reserves or restructure its debt rather than go to voters for approval. The town’s debt is minimal and could be retired in 2012.
Tracking the town of Vail’s financial performance: The Vail Homeowners Association and the University of Southern California’s Marshall School of Business recently conducted a comparative analysis of the financial health of the local governmental entities of Aspen, Breckenridge and Vail.
A summary report of the data indicates that of the three, Vail showed the most growth, doubling its government-wide fund balance over the past six years while Aspen and Breckenridge increased their reserves by roughly 19 percent.
When comparing the net change in revenues less expenses, Vail also led the group, closing 2010 with $9.9 million compared to Breckenridge at $5.2 million and Aspen at $3.2 million.
The analytical model is capable of tracking budget vs. actual performance for all government funds. It allows both public and private interests to make detailed analytical comparisons of the relative success of governmental economic development and other related policies.
The Homeowners Association initiated the project to create a tool to evaluate the productivity and sustainability of public services and capital investments. The project provides rudimentary assessment of the cost vs. benefit of investment in a particular category such as golf, or a group of categories such as those that promote tourism.
Collaboration with the involved towns to refine categorization is ongoing. Updates will be published as new information becomes available.
Vail’s special event strategy, a work inpProgress: Over the past six years, the town of Vail spent the most on tourism marketing when compared with its municipal resort competitors Breckenridge and Aspen.
Vail’s formula for attracting destination guests appears to be the most successful, as evidenced by its lead in tax revenues and more robust gain in total funds balance.
Since the onset of the Great Recession in late 2007, tourism has taken the lead in helping to infill the void left by lagging real estate sales. Vail year over year is marginally leading a sampling of other Colorado winter resorts in sales tax returns.
The town of Vail for 2012 has budgeted $2.35 million for its various event-marketing projects and productions. These amounts do not include in-kind services provided by the town and other sums invested by Vail Resorts, the Vail Valley Foundation and others.
There are many special interests and professionals involved in making marketing and special-event production decisions for the community. The town and Vail Resorts have successfully caused greater collaboration among these parties, creating a procedural platform to evaluate the distribution of marketing dollars and coordinate scheduling. The Town Council recently approved the 2012 summer programming.
The town’s venue of summer special events last summer is credited with contributing to reversing anemic sales tax revenues during the recession years. Nearly two years into the amalgamation of summer and winter branding, local marketing professionals are reporting Vail’s consumer referrals are showing remarkable year-over-year improvement. Vail, they report, can now claim to have the highest name-brand recognition in the mountain-resort industry. It is showing the full power of its public image.
The success of the summer-events program is not without critics, as the parking and crowd congestion are becoming uncomfortably self-evident.
There are those calling for engaging a professional who would proactively and aggressively book entertainment venues, which includes more “extended family” programming, that are predefined according to the demographics and size of desired events.
Others suggest that current organizers invite a symphony orchestra from Latin America to perform in Vail.
The town finds itself, along with Vail Resorts, annually rebalancing its event programs between two markets – day visitors and overnight destination guests. Striking a balance between the two is becoming a more serious debate among those competing for different dollar-generating market segments that can have compatibility challenges.
The Homeowners Association continues to monitor this debate, since it has an immediate effect upon quality-of-life issues of concern to its membership.
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