Steamboat Springs One thing is certain in the wake of a decision by local lodges not to continue to collect a 1 percent resort fee: The Chamber Resort Association's program for guaranteeing airline flights to and from the valley is not going to work this coming winter like it did last ski season.
Even if every sector in the business community contributes generously to the chamber's new Transportation Support Fund, the flight-guarantee program will end up with at least 16,000 fewer seats, an 11 percent drop off from last season. The decrease in guaranteed seats is mainly attributable to higher airfares which are coming thanks to higher fuel prices.
The Transportation Support Fund was the chamber's answer to the sudden end of the former airline guarantee program. That program relied almost exclusively on the Steamboat Ski and Resort Corp. and the lodging community for funding. Until the first week of this month, about half the lodges in town were collecting an extra 1 percent from guests and passing it on to the airline guarantee program. Those hotels and motels raised $357,000 between January and April of this year for the program.
Last year, the $2.25 million airline subsidy program reserved 151,000 seats coming into Hayden. This year, ski corp., the chamber and the chamber's lodging committee are trying to gather enough funds from local businesses to reserve 132,900 round-trip tickets.
Of last year's reserved seats, 99,420 round-trip tickets were used.
"So it's not like all 151,000 were used," said Andy Wirth, ski corp.'s senior vice president of marketing. "We've moved backwards 11 percent, but the people who will fly here will be redistributed. We can weather that. But if we can't reach the goal of 132,900 seats if we were to move back an additional 12 to 14 percent, knowing before the first snowflake even flies that we're down by more than 20 percent, that's an entirely different story, and that would be extremely concerning."
Without the tourists, for better or worse, every business in town would suffer, chamber Executive Vice President Sandy Evans Hall said.
"If we cut off access," Wirth said, "the economic viability of our community will be very much in question."
Most local businesses are recognizing the situation as an emergency.
"This is not something we can work on over the course of the next couple years," Wirth said. "This is directly linked to the viability of our community now this season."
So far representatives from local business sectors have been helpful in trying to figure out what to do next, Wirth and Evans Hall agreed.
For now, Steamboat seems to be at the mercy of the airline industry.
"We're not in much of a bargaining position," Evans Hall said. "We're asking for seasonal flights, there's a shortage of jets everywhere now, and businesses can afford to pay the more expensive prices. It's really challenging, and every year it is more so."
Fuel prices are up, meaning ticket prices are up, so reserving tickets is getting expensive. Last year, the chamber, city, and ski corp paid $800,000 to reserve daily flights from Chicago to Hayden. This year, to reserve the same number of seats on the same flights, would cost the group more than $1 million.
Wirth has already crossed Chicago off the list of flights to reserve, because of its price. Ski corp., the lodging committee, and the chamber were collectively paying about $90 per seat on each of the incoming flights from Chicago. By comparison, Flights from other cities cost between about $15 to $30 per seat.
"Chicago is a very critical origination city, as well as a hub for travelers from the Eastern seaboard," he said. "But we can't be too worried about that now. Our primary concern is maintaining the level of destination travelers that we've had in the past."
Last year, the support fund spent $2.25 million. This year, the fund will require about $2.15 million, without Chicago. Ski corp. will contribute $1.4 million, leaving $750,558 for the community to come up with. For now, the Transportation Support Fund will focus on reserving daily and weekend flights to and from Dallas, weekend flights connecting to Minneapolis, daily flights from St. Louis, daily flights from Denver and daily flights from Newark and Houston.
The airlines that fly into Hayden during the ski season could care less if the flights keeping coming in here, Evans Hall said. That's because of the nature of the leisure traveler versus the business traveler in the United States, she said. While a business traveler's expenses are usually covered by the corporation he or she works for whatever the costs are the leisure traveler will typically be as frugal as possible. So, any given airline can be certain it will get full price for each seat on a booked flight from Chicago to Washington, D.C., while there is less chance of completely booking a flight from Chicago to Hayden, day after day, Evans Hall explained.
Those leisure travelers who have the money to pay for an expensive flight to a resort destination are the wealthy travelers who usually flock to more ritzy destinations like Aspen, Evans Hall said.
"Aspen can't handle its demand for first-class seats," she said. "We have trouble filling the coach section heading to Steamboat. We take the millionaires; they take the billionaires."
Those who do fly into Steamboat, however, are typically bigger spenders and people who vacation longer than destination drivers from surrounding areas, Evans Hall said. Losing them would mean losing a big chunk of the tourist revenue in town.
With expenses rising at every turn, Evans Hall said that, at some point, the community will have to draw the line in terms what it can afford in reserving airline seats. She added that if the community can no longer afford to guarantee flights, the dynamics of Steamboat Springs could really change.
Ski corp. and chamber officials are exploring the point at which the transportation fund might cost more than visitors even spend when they come to Steamboat.
"One of my goals is to create that connectivity," Wirth said. "The revenue that ski corp. realizes for each passenger is about 20 to 25 cents for every dollar they spend while they're here. We don't really know about the rest of that dollar, but we know it is issued with the Realtors, restaurants, retailers. We're still trying to understand."
Representatives from local business sectors will meet with ski corp, chamber, and the lodging committee members July 21 to discuss options and ideas to come up with the $2.15 million for the 132,900 reserved round trip seats.
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