HomeMy WebLinkAboutBBC Market Analysis 103009 � �
; RESEAR.CH 8L
CONSULTING
3773 Cherry Creek North Drive
Suite 850
Denver,Colorado 80209-3868
303.321.2547 fax 303.399.0448
www.bbcresearch.com
bbc@bbcresearch.com
October 30,2009
Ms. Becka Green
Director of Commercial Leasing
Vail Resort Development Company
137 Benchmark Road
Avon,CO 81620
Re: Ever Vail Retail Analysis
Dear Ms Green:
This letter report is in response to your request for an evaluation of retail development opportunities
at the Ever Vail site in Vail,Colorado. Development recommendations are made based on market
conditions,site considerations and the broader development objectives of the Ever Vail project.
Background
Ever Vail is a new base village/neighborhood on the west end of Vail Village that will offer a fifth ski
lift portal to Vail Mountain.As currendy proposed,Ever Vail will have 358 dwelling units, 120
accommodation units (hotel rooms) and 48 employee units. Ever Vail will also provide 77,000 square
feet of needed ski area maintenance space(within the underground parking structure) and
approximately 50,000 square feet ofski school,children's center and company offices.An
underground parking facility will provide 1,551 spaces that service accommodations, day visitors and
customers for Ever Vail commercial businesses.
E�chibit 1. Ever Vail,�ionshead and the Vail Village tore
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Page 2
According to Vail Resort Development Company(VRDC),Ever Vail wilI target a youthful,family-
oriented market and will be the most environmentally-sensitive vi]]age project ever completed in the
western mountain resorts.The Ever Vail concept is thoroughly presented in other VRDC
documents.
Study Objectives
Over the past few months,VRDC and BBC representatives,along with affiliated planning
consultants and town staff,have shared ongoing discussions about how commercial activiry,visitor
services,retailing and restaurants fit into the Ever Vail concept and what scale and mix of retail
offerings make the most market,financial and conceptual sense for this proposed neighborhood.
BBC has been asked to recommend a market-based retailing concept with recommendations for
development scale and tenant-orientation that can succeed at the Ever Vail site and will successfully
support new Ever Vail guests and residents.
Ever Vail Retail Objectives
In considering a retail strategy for Ever Vail;there are three key project considerations.At a
minimum,Eyer Vail needs to provide:
■ Convenient and diverse retail and restaurant services at an appropriate scale for the new
526 unit village residential development;
■ Necessary slcier services(i.e., rentals,ski shops,clothing, restaurants) for persons using
Ever Vail for mountain access;and
■ Successful community gathering and public spaces that help activate the village and
support Ever Vail's broader market positioning.
Ever Vail's retailing component needs to be of su�cient size to offer choices and foster competition,
but small enough to allow individual stores to be successful and to keep supply in-line with demand.
The town's requirement that the ground floor of buildings house retail and related visitor services is
also a consideracion.
Resort Retail Trends
For many years,ski resort retail sales have tracked well with the growth of destination slcier visits,
which in turn correlated well with growth in the local bed base. Generally,as the resort bed base
grew,skier and visitor activity responded and retail sales expanded in a fairly predictable pattern. In
recent years,resort retail performance has become stable and less predictable. Continuing trends in
visitor demographics(older and wealthier);expanding down valley competition;changes in national
retailing practices;and an increasing presence of second homeowners—as opposed to transient
guests—have all combined to alter demand and supply patterns.
The dramatic economic downturn of 2008-2009 has added another layer of uncertainty to resort
commercial health,further obscuring functional relationships between visitor activity and retail
demand.
Page 3
1Mestern mountain resorts. Generally,retailing is a responsive/reflective industry: good store
operators and restaurateurs continually modify their offerings and services in response to subtle
market changes. Retail centers evolve collectively,as each store owner repositions individual
businesses.Over the past decade,across western destinarion resorts,a few broad retailing patterns are
evident:
■ Resident oriented retail and services have migrated down valley away from the core resorts
seeking lower costs space, generous parking,convenience and proximiry to resident
population centers;
■ Resort lease costs have risen dramatically and property owner tenancy strategies have become
more sophisticated.As a result of these fixed cost pressures, there are fewer local start-up stores
and less retail/restaurant experimentation.Within most resorts,store diversity has diminished;
o Restaurants have notably increased their share of most resort retail centers.Higher-end, "white
table cloth"restaurants in particular have increased market share, in part, reflecting an aging
visitor demographic;
■ Sporting goods stores selling recreational hard goods,once an essential element of a ski resort
retailing,have placed greacer emphasis on soft goods and casual wear, effectively consolidating
what were once multiple retail oudets and further limiting the diversiry of offerings;
� o Bars and entertainment,a 1970s and 1980s staple,have lost significant presence in most resorts;
■ Household goods,kitcheh home furnishings and related design services have expanded their
presence in-line with increasing second home personal use.This growth will likely slow in
response to diminished real estate activity;
e High-end jewelry,women's clothing and designer goods have generally increased their share of
the resort retail core,but not universally;and
■ Restrictive community growth policies have dampened commercial development,limiting
supply,and fostering higher rents.
As a rule,after many years of rapid retail sales growth in the 1980s and early 1990s,the pace of resort
community retail growth moderated dramatically in the mid-1990s.Even during the very expansive
real estate markets of the past decade,annual retail sales in most resort communities experienced very
low or stable growth rates.
Page 4
/ �
Town of VaiL The nadonal eeonomic challenges of the last year have had dramatic repercussions
for all aspects of the resort economy. In Vail,and in virtually all western mountain resorts,all
measures of economie activity for 2009 deelined significantly. During the winter of 2008-2009,Vail
hotels and lodging sales were down over 22 pereent from the prior seasons,retailing was down about
21 percent,while restaurants lost about 7 percent of sales.Vail's overall retail performanee,as
measured by retail sales tax collection,was nevertheless,stronger than majority of other western
mountain resorts.
�
There is no consensus on the likelihood, timing or nature of nadonal or regional economic recovery.
Exhibit 2 shows recent sales activity in the four laxgest Colorado resort communities and documents
their comparative size and seasonality patterns over rhe past two years.Vai.l's reliance on winter trade,
and its more pronounced seasonaliry are notable.
Exhibit 2.
Taxable Sales
� Vail 0 SteamboatSprings ° Brecl<enridge � Aspen
$100
$80 —
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° $60 — -
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$ZO — —
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'May /uly September November " January March May'
2008 2009
Source: State of Colorado Department of Locai Affalrs;State Sales Tax Collecdons.
Even prior to 2008-2009, complaints were common that the retail/commercial core of most western
ski resorts had lost vitaliry,store diversity and interest. Down valley competition,homogeneiry and
gentrification had taken a toll on core azea vibrancy.Until last year, employee quality and employee
retention were difficult operating challenges for most resort retailers. Even in the most prosperous
resorts,retailers and restaurateurs addressed workforce issues by closing earlier and operating fewer
hours,often lowering service standards.Very high lease costs discouraged new retailers and
exacerbated the homogenization of resort offerings.
�
�„ � Mountain Travel Reseazch,Market Update,July 2009,prepared for the town Vail Office of Economic Development.
Page 5
Vail retailing has weathered these pressures better than most resorts.The revitalization of Lionshead
has been well received and despite the last year's early season economic pressures,the area's
commercial core continues to function well. Summer business generally exceeded expectations.The
town has reinvested in both Lionshead and Vail Village commercial areas with improved streetscapes,
access and loading systems.West Vail's grocery and Iocally oriented retai] is a valuable stabilizing
influence rhat scems some of the down valley lealcage.
Despite the challenges of the last year,Vail's commercial vacancy rate is low and the town has
aggressively and effectively capitalized on its abiliry to draw upon both regional and destination
markets.Vail remains the largest community retail market of all Colorado resorts.The town
maintains approximately 630,000 square feet of retail space in three commercial clusters.Each of the
�own's retailing centers offer su�cient scale and market differentiation to present a cohesive and
definable destination. Below,Exhibit 3 shows the disCribution of retailers by area and category of use.
Exhibit 3.
Vail Retail Distribution by Category and Square Feet,2008
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Food'Fz Beverage 54 205,310 21' S8,4$0 11 26,850
..., . .__.._ . ...... ....... � ...... ..,. ,�, _,. .. .,. ..,... . .._.., ....._.,. ......u�. . ...._._ _ .., .._
GalleryJArt/Books 14 20,735 0 0 0 0
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Clothing/Fur ✓ ; 32 47,597 .Y.. 8. 12,945 : 0 ;0
.... .,., . .. .,_,.._... � ...... ..._..____ �.. . . ..... ._.
jewlery 12 8,472 2 3,175 0 0
Ski Equipmenti 14 35,935 16 '27,834 2 15,660
�...... . .. . .... �. , .. ....�,.._.. .� _ ,.......... .,_ ._. ..,....� .
Grocery/liquor 2 1362 1 992 4 108,153
Gift Shop ,. 6 .6,p38 3 2 363:', - 0 '0
......,_.... .. .. . ._._..._. ..._ ._ __ . � ..._. . , _�_..� ............. ..� ....... _ ..
Eyewear 2 1,098 1 325 0 0
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Miscellaneousi; 14 r 10,210 ; 6 10 227.} `11 ; 24 616
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Total 150 336,751 58 116,341 28 175,279
Source: Town t Vail,design Workshop;Vaii Resorts.
Exhibit 4 on the following page shows Vail`s retail structure by retail category.The dominance of
food and beverage and slci shops is notable and typical of most western destination resorts.
Conversely,the presence of two major grocery stores is both unusual;by resort standards,and
advantageous. •
�
Page 6
�' Euhibit 4. 62s,377
Vail Retail Space�200$ Total Square Feet
Open Retail
(147,795 sq.ft.) _
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Grocery/Liquor :"'""�,�.�13°��`, �� ,,/;
(11Q507 sq.ft.) �� ` `�� � �
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Ski Equipment
(79,429 sq.ft.)
After many yeazs of construction,Lionshead is now revitalized and again fully functioning.As the
Vail Renaissance is completed, the community's retailing environment will expand and continue to
evolve.The new retail space at Solaris Plaza,scheduled to come on-line in 2010,will provide over
70,000 square feet of new attractions and services, as well as additional restaurants and retail goods—
potentially altering many long-standing town consumer patterns.
Ever Vail wi11 enter the market against this backdrop of a large and reasonably healthy retail
environment,which continues to ehange and evolve in response to economic conditions.
� � Ever VailSate Analysis
Ever Vail retail o£fering will enter a large market wirh significant competition and with many
established retailers.As wirh all new sites, the Ever Vail location presents both constraints and
opportunities.
Site advantages.Ever Vail has several positive locational attributes as a retail environment.
■ New eonsfiruction.As an entirely new project,Ever Vail can be"right-sized"and carefvlly
designed to provide a market-driven retail environment with appropriate locations and scale for
each store category.Most resort retail occurs in retrofitted areas or collections of small stores that
often can't optimize space efficiency and character.
■ Captive bed base. Regardless of competitive considerations,Ever Vail,with over 400 dwelling
units, a large hotel and over 100 full-time resident employees, requires convenient retail,
entertainment,and food and beverage serviees in order to provide customary and necessary
services to residents,guests and homeowners. The hotel will require internal food and beverage
ofFerings and convenience-retail for their guests.The Ritz-Carlton Residenees,Vai) Resorts, Inc.
at ore Creek Place are conveniently situated just east of Ever Vait and residents and guests of these
two projects will be likely to accept Ever Vail as their most convenient retail and restaurant
option.This effectively adds an additional 120 units into the immediate Ever Vail market area.
Day skiers are e�cpected to use this portal because of eonvenient parking and quick access to the
mountain.
� I
t�age 7
� Mountain portal Ever Vail parking will provide roughly 1500 accommodating residents,hotel
and condominium guests,day skiers and visitors who will also require an array of clothing,
convenience retail and morning food services.Parking pricing will be similar to other Vail
facilities with pricing structures that relies on skiers but also accommodates short-term,
inexpensive parking in support of retail are anticipated.The Ever Vail structure has the potential
to be the most convenient parking in Vail in rerms of close proximity to lifts.
■ Office space.In addition to mountain support and equipment maintenance operations,Ever Vail
will provide 33,000 square feet of office space,approximately 16,000 of which will be used by
Vail Resons,Inc.The maintenance and office worlcer presence,which will mean over 150 workers
a day will be present in the Village,will and provide additional day time vitality and lessen
seasonality.
■ Other attractions.Ever Vail plans a major 20,000 square foot spa,housing for over 100 workers,
a multi-season children's center and ski school center. Ever Vail will be an employment center,
particularly given the underground mountain support and maintenance area.These functions will
add to the liveliness and overall retail support for the area.
Site disadvantages.The Ever Vail project also presents challenges as a platform for retail
development.
■ Isolation.Ever Vail is isolated from the rest of town.It is unlikely that Ever Vail will draw a
' significant share oFvisitors from Village Core or Lionshead without unique ofFerings or other
attractions.
■ Lack of skier egress.Skiers will not return to Ever Vail by traditiona]sl�i terrain but will have full
downloading access via the Ever Vail gondola.Two download collection points are currently
anticipated ensuring appropriate flexibiliry for all levels of slciers. It will be important for Vail
Resorts to provide good signage to these download locations in order to support retail trade stores
and bars and rescaurants that rely on high volume apres ski trade.
■ Small captive bed base.The 400 units proposed at Ever Vail is a small segment of the town's
bed base and can't support all Ever Vail retail on its own.
Site physicality/connectivity.The physical attributes of the development also define its
commercial/retail development potential.
■ Configuration.The Ever Vail site is narrow and tightly bounded by Gore Creek on the south and
the Vail Fcontage Road and I-70 on the north,effectively creating a linear,east to west project.
s Contiguity.The western edge of the property has no further urban development potential.
Cascade Village,which is approximately one half mile west of the Ever Vail edge,has road and
bikeway connections to the project,but offers no substantive retail or marlcet influence.The east
pedestrian access crosses Forest Road and requires a 500-yard walk and then entry to Lionshead
' through its backdoor—a less than ideal connection.
i
Page 8
■ Visibility. Although Ever Vail is visible to the highway, interstate access is a considerable distance
away and access will not be entirely intuitive For travelers unfamiliar with the area.
■ Gondola.In most mountain resorts the pedestrian connection between the mountain and parking
creates the most promising retail corridor(e.g., Bridge Street in Vail Village). In this instance,the
traditional retail corridor between rhe mountain and visitor parking is dispersed because there are
two visitor-parking garages with multiple exits that will likely diffuse pedestrian tratf c.At least in
winter,the project's major organizing network will likely be the pedestrian connection between
the gondola and the surface transit systems.
Below,Exhibit 5 offers a simple diagrammatic representation of these concepts. In the winter,the
gondola access will be the pedestrian focus. Skiers and guests will enter rhe area by way of the garage
exits or transitions from the transit center.These patterns reinforee a short but concentrated retail
corridor along buildings E-1,E-2 and E-3.
Exhibit S.
Ever Vail and Gondola Connections
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In sum,resort-retailing environments are continually responding to broader market changes. Even
before the recent economic downturn,western mountain resort retail eenters faced difficult market
conditions and have struggled to achieve substantive growth for many years.Simply adding new
residential units,which the resorts have done consistendy for nearly two decades,has not translated
into similar levels of retail growth or more diverse,prosperous and acrive downtowns.A retail
component is needed at Ever Vai1 in order to provide neeessary guest and resident serviees but Ever
Vail is in some ways a challenging retai.t site,and there are other commercial eenters in Vail that are
well established and will remain we11 positioned to provide the majoriry of Vail's retail services.
� �
Page 9
Current retail market conditions are difficult and simply replicating the standard resort mix of base
area tenants,without regard to the limitations of this site or the challenges of the broader market,are
unlilcely to provide a successful strategy.Ever Vail will likely be the first major new ski village project
to face these long standing retailing challenges in combination with the new challenges presented by
the economic realities of 2009 and the foreseeable future.
Retail Development Strategies
B$C considered multiple strategies in evaluating Ever Vail retail prospects.
OPTION 1 — Minimalist.In our view,a minimalisc retail strategy at Ever Vail would focus on d�e
gondola oriented retail corridor,shown in Exhibit 5,with the intention of filling the basic retail
needs of Ever Vail residents and guests.This would require only about 45>000 square feet of space
and could satisfy—but perhaps not optimize—the basic requirements of Ever Vail guests and owners.
The hotel would supplement some of these public offerings with internal restaurants and shops.In
this scenario,Ever Vail would be more of a residential neighborhood and the pedestrian core would
be smaller and less commercially ambitious.The downside of this strategy is that:
a Qwners and guests would have very few restaurant and retailing options,potentially diminishing
the attractiveness oF the overall project and value of the residentia] neighborhood;
■ The seasonaliry inherent in this strategy would limit retail success and wirh limited offerings peak
� period demands might be underserved;and
■ The concept of youthful,vital public spaces inherent in the Ever Vail plan would be undermined.
In sum, a minimalist retailing effort would under serve the area and potentially undermine the overall
project's success.A rough measure of the minimal retail requirements associated with residential
development and mountain access needs at Ever Vail is set forth in E�ibit 6.
�
Page 10
Exhibit 6.
Ever Vail Retail Demand—Food and Beverage,Sporting Goods,General Retail
..-
. .
... . .. e .. o. .
Hotel Rooms 120 2.0 60% 52,400 $ 6.29
Condominiums 358 3.5 35% 159,600 19.12
Resident Housing 48 2.0 909'o N/A�'� 0.50
Ritz/GC Place/Vail Spa 120 3.5 35% 53,655 6.43
Total Units/Resident Sales 674 � 32.34
Day Skier Sale�Z� $ 2.10
Total Annual EverVail
Associated Retail Demand $ 34.44
EverVail Sales
Capture Rate 409'0
Sales per Sq.Ft. S 300
Supportable Retail Space(Sq.Ft.) 43,900
Note: (1)Emolovees:$5,000 per person per year.
(2)Averaoe:300 day skier parking spaces @ 2.6 pers./space X 140 days X $15/person in retail spending. '
See Appendix A for derivation of estimated daily visitor retail spending.
� Source: BBG Research Et Consulting,2009.
Assuming reasonable unit occupanry rates and a conservative retail capture assumption,the
development ultimately expected at Ever Vail could support an estimated 45,000 square feet of
development,which would be composed largely of restaurants,convenience goods,skiing/recreation
equipment and clothing.This represents a retailing model that relies primarily on Ever Vail guests.
This strategy would also present difficult seasonality challenges for rerail operators.
OPTION 2—Additional anehor tenant.In order to expand beyond basic resident/guest services,
support a more engaging pedestrian environment and allow less seasonal retail operation.Ever Vail
needs a second retail attraction and market anchor—one that expands the market,supports summer
business and enhances street level vitality.
In our view, the Ever Vail site is too far from the majority of Vail Village accommodations to suggest
promoting a large and diverse retailing core that could offer the scale and product diversity necessary
to draw large numbers of visitors from elsewliere in Vail,and successfully compete with Lionshead
and Vail Village. Instead,after internal discussions about the merits of various alterntive attractions,
we support the introduction of a"Fresh Market"—conceptually,a small Whole Foods—at site E-7.
The grocer/market would achieve multiple objectives:
■ Introduce a new retail element into the larger Vail marketplace,which is not entirely duplicative
of other offerings;
■ Introduce an anchor retailer into Ever Vail that will attract patrons from a wide area without
I
cannibalizing other businesses;
m Expand the summer attraction for Ever Vail retailers;
Page 17
j
■ Add a year-round anchor tenant at a location that reinforces the natural pedestrian flows within
the Ever Vail complex;and
■ Significantly e.xpand the Ever Vail market beyond ski-oriented conveniences for Ever Vail
residents and guests.
The Lot E-7 site offers an excellent location for this store. It is close to the east end of the project and
the remainder of Lionshead,and it balances the Ever Vail retail core with a small unique grocery at
one end and mountain access on the other.A convenient specialty grocer with on-surface parking and
market appropriate goods also allows other locally serving businesses to consider an Ever Vail
location,effectively benefiting from the retail synergy typically associated with a grocery anchor.
Exhibit 7 on the following page shows Ever Vail and the two retail districts;Market Street District
and the Gondola District.
Exhibit 7. �,,.
Ever Vail and --' '�'�'�
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It should also be noted rhat the success of rhe grocery and the concept for a diverse locally oriented
retail center is in part dependent upon either surface parking and surface aecess incorporated into the
Market Street design,or reliable,convenient structured parking dedicated to Market Street
customers.Additional on-street parking would enhance convenience and visibility for rhe Market
Street shops and encourage patrons to make quick stops and more regular visits.
/, '
�
Page 12
I
The Market Street shops can accommodate about 20,000 square feet in rhe storefronts along Market
Street ending at the Fresh Market E-7 site. The Fresh Market is designed at 14,000 square feet,
suggesting a total addition of 34,000 square feet of retail and restaurants anchored by the grocery.
Potential tenants include: additional pizza,sandwiches or similar casual food;liquor store;drug store;
as well as any variety of establishments that serve residents,guests and visitors,particularly stores that
might otherwise locate down valley. In sum,with the strategies suggested here,we foresee a need for
appro�umately 70-80,000 square feet of all forms of retail, including grocery,restaurant and general
retail trade.
Tenant mix.Traditionally, the tenant mix of ski resort retail has been reasonably predictable and
reflected the general trends discussed previously. Restaurants tend to dominate spatial requirements
followed by ski shops and with recreational apparel.
Vail's current tenant miar(see prior Exhibit 3) reflects a strong reliance on food and beverage and a
substantial amount of grocery space—the result of having two large grocery stores in west Vail.
Beaver Creek,which is in some ways more of a pure resort retail market with only minor outside
influences,portrays a more tourist-oriented mix of tenants with a notable absence of groceries,and
considerably more apparel and gallery space.
Exhibit 8.
Retail Sales by Category,Beaver Creek,2005-200$
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Apparel Gallery Luxury Miscellaneous Restautant Sporting Goods
Source: Vaii Resorts Development Company.
The growth in restaurant trade,referenced previously, is also evidenced in Beaver Creek.
Ultimately,the market will determine the tenant mix at Ever Vail. Given the eharacteristics
previously described,we would expect restaurants and sporting good stores to dominate the retail
miac,accommodating 35 percent and 25 percent of the 75,000 square foot total,respeetively.With a
14,000 square foot floor plate, the grocery store will absorb about 18 percent of total retail space,
leaving about 17 percent For affiliated convenience retail and specialty goods.
I� �
�
Page 13
Sumenary
■ Ever Vail requires a core level of commercial activity,including a mix of restaurants, bars,skier
services and general retail, in order to provide basic services for Ever Vail skiers,residents and
guests.This basic function could probably be accomplished with 40-50,000 square Feet of retail
space,which would largely be ski shops and resraurants.
■ The proposed hotel requires an internal restaurant and bar,or perhaps two restaurants, to ensure
that guests have appropriate services and convenience associated with resort offerings.In this
current market,these offerings are lilcely to include a pool,workout area,sundry shop and spa,
which dictate a small amount of in-hotel retail businesses as well.This function could probably
be accomplished with 5-8>000 square feet of hotel retail and restaurants.
■ The overall Ever Vail experience would benefit from a more robust retail offering,additional
attractions,and greater diversity of bars and restaurants than the minimal amount needed to
service local guests.The concept of a Fresh Market(specialty grocery) is an attractive anchor
prospect as it potentially broadens the market and lessens reliance on winter skiers/tourists.
s We believe that a small unique grocery could anchor a convenience oriented district that would
provide services for guests and residents and talce advantage of Ever Vail parking,which will be
underutilized outside of pealc ski season.
■ In total,the gondola portal and Ever Vail residential,plus the small grocery market,will support
an estimated 70-80,000 square feet of retail development at completion of the project.
■ Vail Resorts will have to accept low financial returns on retail leasing in the project's initial
development stages until the Ever Vail bed base reaches maturiry.
We appreciate the opportunity to participate in this discussion and loolc forward to seeing a vital and
successful Ever Vail project lead the way in the new-era, mountain resort market.
Sincerely,
��-t,L c�._--
Ford C. Frick
Managirig Director
i
( -
i4�'t�EfVDIX A.
Derivation �f Retail Spend°eng /�ssumptions
Exhibit A-1.
Seasonality of VaiB Tax Collections(restaurants,grocery and retail sales only)
$1.6
� $1.4 —
0
= $1.2
� Winter=55%
�% $1.0
�
v $0.8 — -
>
a
X $0.6 -
F Summer=20%
� $0.4
R
� $0.2
Base=25%
$0.0
NOV DEC JAN FEB MAR APR MAY )UN jUL AUG SEP OCT
Source: BBC Research Ez Eonsuldng,2009.
� I
The above data suggests rhat there is a stable base of sales in restaurants, grocery stores and retail
outlets that represent about 25 percent of annual town sales—rhis business occurs without immediate
reliance on seasonal guest-driven activity.
Winter visitor sales(November through April) account for about 55 percent of the town's$250
million dollars of annual retail, grocery and restaurant sales. Summer guest contribute about 20
percent of annual sales.
� �
Page 7 5
f �
Exhibit A-2 shows a process for estimating daily visitor sales(in the food, grocery and retail sector) by
employing the data from Exhibit A-1 with data on destination skier activiry.
Exhibit A-2
Derivation of Visitor Day Sales
-..
Winter Guest Sales
Vail Annual Food,Beverage and Retail Trade Sales
(exclusive of lodging and utilities)(1) $250M
%Attributable to Winter Visitors: SS%
%Attributable to Vail Lodge Winter Guests: 8S%
Vail Lodged Winter Visitors Food,Beverage and Retail Trade Sales $117M
Guest Nights
Vail Skier Visits 1.65M
%Attributable to Vail Lodged Destination Guests�2� 55%
Vai)Lodged Destination Skier-Visits (1.65M X 0.55) 907,000
I
Skier�sitr per Destination Guest 4.5
Average�ength of Stay 5.0 Days
Vaii Destination Winter Visitor Days (907,000 /4.5 X 5.0) 1,007,000
Retail Sales/Destination Guest-Day($117M /1.OM) $777/Day
Note: (t)Town of Vail Sales Tax Reports.
(2)Vail Resorts,2009.
Source: BBC Research&Consulting,2009.
This exercise suggests that Vail lodged,destination guests will spend about$117 per day on Vail
grocery, retail trade and food and beverage services.