Resort fee halt leaves big void

Legality of charge a concern for chamber

Advertisement

— Chamber Resort Association officials say the decision to call a halt to a voluntary 1 percent fee that lodges charge their guests was made to put pressure on other segments of the business community to ante up for guaranteed airline seats in the winter.

But that may not be the whole story.

The Steamboat Springs Restaurant Association decided against instituting a similar voluntary fee because of concerns that doing so would be illegal.

About half of the hotels in Steamboat Springs have for two years been charging guests an extra 1 percent fee. The money they collect has helped pay for an airline subsidy program run by the Steamboat Ski and Resort Corp. During the same two years, ski corp. and members of the lodging community have been pressing other business segments to pitch in for the program.

Ski corp. estimated in March that the airline subsidy for the upcoming winter would be $1.7 million. Of that, the ski corp. had committed to paying about $1 million and the rest was to come from other local businesses.

However, the chamber circulated a letter to members of the lodging industry on July 3, urging them to stop collecting the 1 percent resort fee for the airline subsidy program. Andy Wirth, the ski corp.'s vice president of marketing, said he couldn't comment on why the chamber's lodging committee chose to suspend the resort fee rather than continue to urge other industries to participate.

"The lodging committee chose to move along these lines. And the business community seems to have picked up on the sense of urgency, regardless of the action the committee took," Wirth said.

The Steamboat Springs Restaurant Association's plans to collect a similar 1 percent fee for the airline program was discouraged by its state umbrella organization.

"The Colorado Restaurant Association Steamboat Springs is one of its chapters told us that collecting a fee like that could be illegal in terms of price fixing," local restaurateur Karen Riggio said. "We were real close, we thought, to coming up with a solution when they deterred us."

Steve Dawes, president of the chamber's lodging committee, said the local lodging industry sought legal advice before instituting the 1 percent fee some years ago. He added that he isn't familiar enough with the restaurant industry to understand why it could be illegal for it to charge a fee.

"There have been discussions around the viability of a fee mechanism like this one," Wirth acknowledged. "They do include legality aspects of the issue, which we will continue to discuss."

Between January and April of this year, $357,435.04 in resort fees were collected by the city, for the chamber. The money is sent to the chamber each month. The chamber's lodging committee works with the ski area to provide the airline guarantee money.

And it is that lodging committee that will decide what to do with the revenue that has been collected so far, said Ed MacArthur, president of the chamber.

In any case, getting broader-based involvement in the airline subsidy program, and collecting more money than has been gathered in the past, will not increase the number of airline seats that are guaranteed to be paid for.

"This isn't about growth," Wirth said. "It's about maintenance. Right now the short-term focus is holding onto the number of seats we've reserved in the past. And it's not likely that we can hold on. We'll probably see a 10 percent decrease."

"It is ugly," said Dawes, of the lodging committee. "We'll probably end up dropping the Chicago-Hayden flights because they're so expensive. The Minneapolis-Hayden flights, which we've been running for years, have doubled in cost for next year. Then there's this national fuel cost issue, and all the airlines have their arms up in the air saying they need a 10-15 percent increase to account for the higher costs."

It's a comfortable illusion that people will just keep coming here, Dawes added.

Yampa Valley Regional Airport Director Jim Parker called the 1999-2000 ski season a success because the airport welcomed 10 percent more passengers during the season, compared with the previous season. YVRA officials reported that they recorded 173,519 passenger enplanements in January through March 2000, compared to 157,758 enplanements in January-March 1999.

"It's exciting to know we had an increase and that there is a market here," Parker said in April. "As the airlines are providing more seats we'll see more of an increase in the total number of passengers."

With Wirth's recent report on airline figures for the upcoming ski season, neither an increase in the number of passengers nor more seats provided by airlines seems certain.

The news and urgency are not encouraging for the flat ski industry, Wirth said.

"Access for destination skiers has always been our primary concern," he said. "We're in a great position overall, in terms of who we are, our amount of snowfall, our location, but when we move backwards on the access issue, it's definitely a reason to be concerned."

Dawes agreed.

"There's a serious problem coming to the valley," he said.

"Restaurants, retailers, Realtors they don't want to rush and make a mistake," Dawes added, "but everyday they give us any excuse for why they haven't started contributing is another day gone by that we're not collecting money."

The Steamboat Springs Restaurant Association voted July 7 to collect a quarter-percent of gross sales to contribute to the airline subsidy program. Although Wirth is not clear on all the details of the restaurant association's new program, he is pleased that the group is taking action.

"I'm absolutely applauding them for educating themselves and moving quickly," he said. "We're hoping to recreate that sense of ownership amongst other business industries in town."

Riggio explained the restaurants' decision.

"We tried to vote on 1 percent, but it was shot down. So we tried a half-percent, and got a split vote with the majority of people saying 'no.' A quarter-percent of gross sales was the best we could vote in," she said. "Personally, I'm not thrilled with this. It's a pretty minuscule amount. For as important as the airline program is to our industry, a quarter-percent is a pretty small amount. It could grow, but maybe with broad participation (from other industries), it won't need to."

Riggio said it is probable that some restaurants including Riggio's will contribute more than a quarter-percent to the cause.

"We're not sure where that money will come from," Riggio said. "Sales tax, prices, or what. But it will be up to each individual restaurant to decide where they'll collect the money from."

The means of revenue collection will be left up to individual restaurants to ensure that it's being done legally, she said.

Riggio said she was shocked by the chamber's letter to the lodging industry last week, precisely because the restaurant association was getting so close, and working so hard, to come up with a suitable way to contribute to the airline program efforts.

Although many support the airline program, retailers, Realtors and restaurants have been hesitant to charge the fees to locals.

"The lodging industry kind of has it easier," Riggio said, "because all of its customers are out-of-towners. We feel a little uncomfortable charging locals for this sort of thing."

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

Comments

Use the comment form below to begin a discussion about this content.

Requires free registration

Posting comments requires a free account and verification.