Sales tax collections were up 7 percent in Aspen and 8.5 percent in Snowmass in 2011, with nearly all categories of retail showing a positive rise in sales, according to reports from the each of the municipality’s finance departments.
December was a strong month for Aspen, which saw a 12 percent increase in sales tax collections and 13 percent increase in retail sales compared to December 2010, to end the year with a 7 percent increase overall. Continuing a trend from the latter part of the year, the construction category (home purchases such as paint and lighting, equipment leasing, and interior design elements) was the strongest—up 38 percent over 2010. Luxury goods had the second-largest jump—14 percent—and both the sports equipment/clothing category and the clothing category were up 11 percent in 2011.
Aspen retailers sold over $502 million worth of goods in 2011, according to the city of Aspen’s report, and the city collected about $10.5 million in sales taxes—a figure closest in the last few years to the $10.6 million collected in 2006.
Snowmass, on the other hand, saw an end to six straight months of double digit increases in sales tax collections in December. But the last month of 2011 was still up, by 5 percent, to end the year with an 8.5 percent gain. Retail sales were a mixed bag in December, according to the town’s finance report—lodging sales tax was up more than 12 percent, while restaurants were down almost 4 percent. Food, drug, and liquor stores were down 5 percent, but general retail was up 3 percent.
In the end, Snowmass collected about $1.31 million in taxes in 2011 for its general fund, a significant improvement over the $1.21 million that was collected in 2010 and inching closer to the $1.37 million collected in 2007 (the earliest year shown on the town report).
In Aspen, an increased lodging tax for tourist promotion ended its first full year at the end of 2011 having collected just under $1.6 million for marketing. The tax, which increased from .5 percent to 1.5 percent in 2011, collected about $500,000 in prior years.
Another Aspen lodging tax, .5 percent for transportation, was up 6 percent over 2010 levels, after a strong December that was up 19 percent over the same month the previous year. (Meanwhile, accommodations sales taxes were up 15 percent for the year.) The lodging tax for transportation, while up, is still lower than 2006 levels, the earliest year for which data is provided in the city of Aspen report.
Snowmass, which derives its marketing funds from a 2.5 percent sales tax, collected nearly $3.3 million in 2011, about double what Aspen brings in. The fund collected more than $500,000 in December. Snowmass’ lodging tax, meanwhile, brought in $1.24 million in 2011, a 13 percent improvement over 2010. Both funds collected significantly less than they did in 2007 and 2008.
Bookings a mixed bag
Despite little snowfall, December was a strong month for occupancy for both resorts, according to a report from MTRiP (Mountain Travel Research Project). At 56 percent, Aspen’s occupancy was about 14 percent ahead of December 2010; Snowmass was 41 percent full in December 2011, which was 6 percent ahead of the same month the prior year. Both towns had their busiest Christmas/New Year’s holiday week since 2007/2008, said Stay Aspen Snowmass President Bill Tomcich—with 94 percent peak occupancy in Aspen and 84 percent in Snowmass on December 29.
Including November, a very small month, occupancy is up almost 16 percent in Aspen and 14 percent in Snowmass over the winter of 2010.
In both towns, however, average daily rate was down in December. Aspen’s rate was down 4.6 percent ($498 per night) and Snowmass’s, 2.5 percent ($347), compared to the same time period in 2010.
The Aspen Skiing Co. reported that skier visits across its four mountains was down about 5 percent through the end of December compared to the prior season. Destination business was strong but local pass usage dropped considerably, Skico spokesman Jeff Hanle told the Aspen Business Journal in January.
At the time the MTRiP report was released, January was pacing ahead of last year in bookings—nearly 15 percent in Snowmass and 6.3 percent in Aspen. Tomcich acknowledges that the pace of bookings for the rest of the season has slowed down since December 1—most likely due to lack of snow news—and quite a bit in Aspen. On the other hand, MTRiP reported, last-minute December bookings were stronger in Aspen than at other western destinations, down just 7 percent from the previous year.
Aspen and Snowmass seem to be performing better in occupancy yet worse in average daily rate than the 15 mountain resorts surveyed by MTRiP. Occupancy across the MTRiP resorts was up an average of just 1.3 percent in December, but average daily rate was up a significant 8.1 percent, compared to December 2010. Aspen and Snowmass’ January bookings were better than other resorts, while booking pace for the rest of the season at the MTRiP resorts dropped 22 percent—better than Aspen but worse than Snowmass.
With the economy steadily rising but a bad early season for snowfall across the United States (a reverse of the last few winters), “destinations will be forced to find dynamic ways to both keep early season momentum going and keep up with last year’s extended and successful late season numbers,” according to the MTRiP report.
Because early season numbers typically reflect vacations booked before the ski season began, “the twin wildcards of weather and the economy will significantly shape the remainder of the season,” said MTRiP Director Ralf Garrison in a press release.
The broader picture
Certainly, most of the economic news at the beginning of the ski season has been trending upward. The Dow Jones Index closed up the third consecutive month in November and the Consumer Confidence Index Rose for the second month with a nearly 17 percent increase.
Nationally, unemployment dropped to 8.5 percent, its lowest point since March 2009. In Colorado, December unemployment decreased one full percentage point from the year prior, to 7.9 percent—better than the national rate. The largest private sector gains across the state were in leisure and hospitality, but some of the largest declines were in construction.
Local employment was even more positive. Pitkin County’s unemployment rate in December was 5.9 percent, down from 7.1 percent in December 2010. Garfield County saw a decline from 9.5 percent to 7.5 percent over the past year, and Eagle County, 8.2 to 6.9 percent.
Commercial passenger traffic into and out of the Aspen/Pitkin County Airport was up 9 percent in December over the same month the prior year, according to a passenger report on the airport’s website.
And, following a sharp drop in December, Aspen real estate sales appeared to be on an upswing in January, according to the finance director’s report. Real estate transfer tax collections were the highest since 2009 in January, reported Aspen Finance Director Don Taylor—up 44 percent from 2011. (A second RETT fund was up 29 percent.) Meanwhile, Snowmass ended an up and down 2011 with a 32 percent increase in its RETT over 2010. To put its $2.15 million in RETT collections into perspective however, the fund collected $6 million in 2007.
Comparing indicators to a year ago doesn’t necessarily give an accurate picture of the local economic situation, said Doug “Merc” Mercatoris, a former Snowmass Village mayor who owns the Mountain Dragon restaurant on the Snowmass mall.
“This winter has been up from last year by a small amount, but it’s still nothing compared to where we were in 2008,” said Mercatoris, referring to both his business and business in general.
Snowmass is still climbing out of “a low point” in 2009 and 2010, Mercatoris said. And it should be noted that while the commercial base has gotten larger in the last few years, with Base Village businesses coming on, additional residential units to complement the commercial has not kept up—so that while the pie might be a little bigger, the slices are smaller for individual merchants.
Snowmass was particularly impacted during the downturn by the drastic drop in corporate and other group travel, which the town relied heavily on for summer business, he added.
But things are “going in the right direction, and that of course is encouraging,” said Mercatoris.
Snowmass’ Silvertree hotel complex, which includes its conference center, has a new owner who is looking to do a full scale renovation and conversion of the main property to a Westin brand hotel. The renovation, if approved, will likely bring down occupancy this year while the property is out of commission, but should help when it comes back online next winter.
And Aspen and Snowmass should pay attention to each other’s successes, said Mercatoris.
“I think when Aspen does well, Snowmass does well, and vice versa,” he said. “The upper valley resort economy is very symbiotic and it affects the whole valley. Take the X Games; hotels were full all the way to Glenwood.”
Key indicators
Aspen
- Sales tax collections, December: up 12%
- Sales tax collections, 2011: up 7%
- Retail sales, December: up 13%
- Retail sales, 2011: up 7%
- Marketing tax collections, December: $295,128
- Marketing tax collections, 2011: $1,599,692
- .5% lodging tax for transportation, December: up 19%
- .5% lodging tax for transportation, 2011: up 6%
- Occupancy, December: up 14.5%
- Average daily rate, December: down -4.6%
- Pacing of bookings, December: down -33.9%
- Sales tax collections, December: up 5.04%
- Sales tax collections, 2011: up 8.5%
- Marketing tax collections, December: $512,455
- Marketing tax collections, year to date: $3,273,011
- Occupancy, December: up 6.3%
- Average daily rate, December: down -2.5%
- Pacing of bookings, December: up 0.8%
- Airport commercial passengers: up 9%
- Pitkin County unemployment rate: 5.9%
- Colorado unemployment: 7.9%
- National unemployment: 8.5%
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