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HomeMy WebLinkAbout130521 Ski Season Report FINAL TO: Vail Town Council FROM: Economic Development and Finance Departments DATE: May 21, 2013 SUBJECT: 2012/13 Ski Season Report I. SUMMARY In response to Council’s request for a report on potential reasons for the record sales tax collections during the 2012/13 ski season, staff has contacted Vail Resorts, MTRIP, the Vail Economic Advisory Council, and the Vail Valley Partnership for their insight. As expected, there are many factors working together to achieve the positive results. International visitation, particularly from South America, was mentioned frequently as a key factor for all types of business. Although lack of snow was a detractor in December, consistent snowfall through the rest of the season, including the extra weekend at the end of the season, brought both destination and drive market business. New and/or redeveloped businesses performed well and, in the lodging category, contributed to increases in room rates and revenue per available room. Events including the Burton US Open and Vail’s 50th Anniversary were successful and brought in participants and spectators. The Vail brand was also cited as a strong influence in bringing people to Vail this season. II. REPORTS What follows is a compilation of information gathered from the various identified sources. Vail Resorts - Vail’s brand and guest-experience differentiation - Snow Conditions in time for the holidays and the second half of the season - Season Pass Strategy - International Momentum - 50th Anniversary Success - Events Success/Burton US Open We continue to be bullish on the state of Vail’s brand/business on a macro level. The redevelopment of the past 10 years and the guest-experience differentiation that it has created for Vail continues to pay dividends. W e saw a hesitancy among our guests to commit to a visit until they were comfortable that snow conditions would be adequate. This was probably created by the poor conditions they experienced during the 2011-2012 season. But once they saw communication regarding the snow we were receiving prior to the holidays and beginning in late January, they reacted very quickly and significantly. We feel that our season-pass strategy for both the destination market and the drive market continued to drive success for Vail as guests Town of Vail Page 2 who had purchased a pass prior to the season beginning had their loyalty to our resorts sewn up for the season and an incentive to visit once the snow began to fall. We continued to see growing demand from international markets, and the fact that Easter fell in March generated significant volumes from the Mexican and South American markets during spring break. The 50th Anniversary celebration was a great, consistent theme for the entire resort that clearly gained traction with guests and drove a focus for Vail in the media. Lastly, our events strategy at the beginning and end of the season with Snow Daze and Spring Back to Vail, and the introduction of the Burton US Open drove differentiation and media attention for Vail during need times and with a new market. Ralf Garrison, MTRiP MTRiP is glad to be a provider of taxable sales reports and analysis to the Town of Vail, however the data received thus far is only through the end of February and therefore our seasonal reports that will provide information on the performance of new stores in Vail, how they are increasing overall sales tax collections and how Vail is performing against a competitive set of other mountain towns will not be available until June/July. In the meantime, we can provide some information on Vail’s winter performance through February, 2013 compared to other mountain towns.  For the time period November 2012 – February 2013, Vail has saw 2.1% increase in taxable sales from the previous year, slightly less that the average of 3.5%, represented by the destination resorts tracked by MTRIP Econometrics, and 15th of the 17 in the group.  For the same period, Vail’s lodging tax receipts represented a 2.9% increase, comparable to the sales tax figure. A preliminary conclusion is that (at least in this past year) sales tax increases were driven by the destination guest who also stayed in the Vail area.  It should be noted that Vail’s taxable sales volume is much larger than the towns in the competitive set, where Vail’s Nov – Feb tax sales equals $250.9 million and the average of the remaining 16 towns is only $87.5 million.  Lodging and sales tax data that is sited here is provided to the Town of Vail as part of their subscription to MTRiP and attached. Vail Economic Advisory Council  South American business strong at restaurants and galleries with some restaurants staying open throughout the afternoon for these guests  New restaurants did well but with some cannibalization noted; some established restaurants did not do as well as redeveloped properties  Recovering US economy, particularly among our high end guest demographic from key markets although visitation was down from areas where the economy continues to lag  Vail branding, the Vail renaissance, new and redeveloped properties all had favorable impact  Lack of snow in the early part of this season and last hurt lodging in December, but the timing of snowstorms in the first quarter 2103 kept bookings up for that period. Some, but not all, lodges made up December shortfalls in subsequent months.  Additional weekend at the end of the season brought incremental business Town of Vail Page 3  The Burton US Open drew both spectators and competitors as well as television coverage. Having too much snow for the women’s event made for some good publicity.  Net promoter scores are high indicating our guests are happy with our service levels Vail Valley Partnership Key performance indicators for the Town of Vail for ski season 2012/13 include:  Increased REVPAR (revenue per available room) of 4.9%, a leading indicator for lodging sales tax collections.  A small increase of 0.7% in lodging occupancy, indicating additional destination overnight visitation to Vail.  Increased group business during “need” times as reported by a survey of lodging partners, likely resulting in compression for non-group lodging properties.  Eagle County's employment picture is continuing to improve. Eagle County's February 2013 unemployment rate of 6.0% is better than the five year moving average of 6.4% and slightly higher than our 10 year average of 5.3% and it is also 1.2% lower than February 2012.