Paying for airline subsidies takes on sobering urgency

Lack of resort fee leaves big void

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— Business community members met Tuesday to start planning for ways to come up with $750,000 needed to pay for a winter airline subsidy program that brings thousands of visitors to the valley.
Last week, the Steamboat Springs Chamber Resort Association circulated a letter asking lodging properties to stop collecting a 1 percent resort fee, effective immediately, until the program could be revised to include more sectors of the resort economy. The money raised by the resort fee has been passed on to the Steamboat Ski and Resort Corp. to pay for the airline subsidies that guarantee winter visitors.
To replace the resort fee, chamber officials are putting together the "Transportation Support Fund." Under the new program, each business will decide if and how to come up with the revenue to contribute to the airline program.
Ski corp. has increased its contribution from last year's $1 million to $1.4 million this year. The chamber is still $750,000 short of funds to needed to ensure that airlines send regular flights into Hayden during the ski season. Last year, the city, restaurants, Alpine Taxi, and participating lodging members contributed $535,000 in addition to ski corp.'s $1 million.
But even if the chamber can come up with $750,000, it won't be enough to guarantee the same number of seats as last year because the cost of airline tickets has gone up.
"An additional $750,000 this year will put us at 11 percent fewer seats than we had last year," said chamber Executive Vice President Sandy Evans Hall, who called the current situation "scary."
"This is really a challenge," she said. "We're not even maintaining last year's number of seat reservations. If we lose this, where will our visitors come from?"
It is not likely that skiers will fly to Eagle, then drive up to Steamboat Springs, when there are so many resorts closer to the Eagle airport, she said.
On Tuesday, representatives from the construction, real estate, restaurant, retail, lodging and transportation industries gathered with Evans Hall and Andy Wirth, vice president of marketing for the ski corp., to decide what to do next.
"We discussed the nature of our problem in terms of air seats, and the urgency of our funding shortfall," Wirth said. "Everyone understood."
The group decided that a $750,000 goal is reasonable, even though it will not reserve the same number of airline seats as it would have last year.
The increased cost of airline tickets is due to a number of factors, Evans Hall said, including competition, high fuel prices and the price of steel.
The Steamboat Springs Restaurant Association is one group that has responded to the airline funding situation immediately.
"We've all agreed to come up with $115,000 to $130,000 to contribute to the fund," the association's president, Josh Brustin, said.
That will be significantly more than the $20,000 the restaurant association donated last year.
"We're committed to this," Brustin said.
Each restaurant, for now, is going to contribute a quarter-percent of its gross sales toward the Transportation Support Fund.
"That's not to say some restaurants aren't going to contribute more," Brustin said. "Quite a few are stepping up to do that."
For the rest of the local resort economy industries, discussions will continue until a formula has been developed to determine the amount of money to be expected from each business. The group also is working on developing benefits, or incentives to get local businesses involved.
Some $357,435 was raised by the 1 percent resort fee between January and April 2000. The money, which is collected by the city for the chamber, is transferred from a city account to a chamber account, and finally transferred to the lodging committee. At this point, most of the money collected in 2000 has already been allocated by the lodging committee to cover last season's shortfalls, Evans Hall said.
At the lodging committee's discretion, what remains will be spent for transportation, as it has always been, she said.


To reach Bonnie Nadzam call 871-4205 or e-mail bnadzam@amigo.net

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