Steamboat Springs Emboldened by the economic performance of the winter's ski season airline program, resort leaders have added a daily roundtrip flight from Atlanta to the 2006-07 schedule.
"We've been talking about Atlanta for a long time," said Andy Wirth, vice president of marketing for Steamboat Ski and Resort Corp. "It's a very lucrative market. This is it -- this is the heart of our market."
Wirth told the Yampa Valley Airport Commission on Thurs-day that he projects the ski season airline program will be $1 million under budget when final figures are available. Steamboat Springs entities budgeted $1.95 million for winter revenue guarantees. Wirth expects the final cost to be $950,000.
About 60 percent of the guarantees are funded by Ski Corp., with the remainder supplied by taxes collected by the Local Marketing District at the base of the ski area. Another group of businesses help fund air program marketing under the guidance of the Steamboat Springs Chamber Resort Assoc-iation.
Higher fares, revenue
Wirth said the business performance of the air program during the 2005-06 winter season was not only caused by the 432 inches of snow in Steamboat. Rising airfares throughout North America also played a role. The higher fares translated into bigger yields for the Steamboat program.
Also, the reduction in United Airlines' roundtrip seats between Denver International Airport and Yampa Valley Re--gion--al Airport benefited the airline program.
Wirth said the United flights have never required the revenue guarantees that other flights have. Yet, United was the dominant carrier at YVRA -- a status since taken over by American Airlines.
The flights from Denver pick up passengers flowing into DIA from cities throughout the United system, and the reduced number of seats troubled Steam-boat resort leaders. Ski Corp. and lodging management executives sought to offset the loss of 9,883 seats on United by boosting capacity from Chicago on American Airlines. The change from a Boeing 737 to a 757 on the daily roundtrips from Chicago yielded an additional 5,768 seats. And the decision paid dividends because of increased ticket price.
"We filled 5,200 of those 5,700 seats," Wirth said. "The flow through, from a business standpoint, was terrific. And it demonstrated that our customers will move on to an alternate carrier."
The ski season flights carried 110,000 passengers during the winter, the most this decade. And the planes were more full than they have ever been, Wirth said. Load factors on all of the flights was a record 71 percent.
Ski Corp. airline director Janet Fischer said load factors have increased for four straight years, from 63 percent in 2002-03 to 65 percent in 2003-04 and 70 percent in 2004-05.
The winter's healthy balance sheet and the stable funding base represented by the Local Marketing District have allowed next winter's available seats to be boosted to 150,000 -- an increase of about 13,000 from this winter. The projected revenue guarantee budget is more than $1.9 million, which is less than last year's cautious $1.95 million.
"Our company wouldn't have been in a position to commit to the Atlanta daily absent the LMD," Wirth said.
The Local Marketing District, or LMD, imposes a 2 percent lodging tax within the district at the base of the ski mountain. It raises about $1 million annually.
The savings on the revenue guarantees will be returned to Ski Corp. and the LMD on a prorated basis.
A change in thinking at Delta Airlines also was critical to the decision to bump up the Atlanta route from Saturday service to a daily roundtrip, Wirth told the Airport Commission last week.
Although Continental Air-lines, for example, serves YVRA with a once-a-week roundtrip on a Boeing 737, Delta has been reluctant to operate a flight as long as the Atlanta to Steamboat route on anything but the larger Boeing 757. That plane represents "too much metal" (too much seat capacity) for a daily flight into this market, Wirth said.
A change in strategy at Delta now favors flying to YVRA on the 150-passenger 737-800.
The daily flight from Atlanta is expected to be loaded in travel computers no later than May 1.
Ski Corp. President Chris Diamond, who also sits on the Airport Commission, said he thinks most people don't know that winter vacationers are tending to plan their trips earlier. He said having the Atlanta flight available to consumers this early is a significant plus. Wirth said he anticipates that 25 percent of next winter's season-long business will be booked by August.
"I don't think there are many resort communities sitting like we are in April with their strategies already in place," Diamond said.
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