Chris Diamond: Air service affects us all

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Election 2011

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Air service is one of the most important economic drivers for our community, touching directly or indirectly every individual, family, business and organization across our community. For the past 25 years, we have made payments to the airlines to ensure adequate air service. More than $30 million has been invested to date. As a result of the recession, airline consolidation and increased fuel costs, we have seen dramatic increases in costs per flight. With limited resources, we have been forced to reduce service by 27 percent throughout the past three years (2007-08 to 2010-11). Never in the 25-year history of the program have we seen this kind of reduction.

If this trend continues, the adverse economic results to all of us will be significant. Air service is the lifeline for a vibrant resort community such as ours, and the failure to preserve it could have significant and adverse consequences for all. Recognizing that additional funding sources would be required to stem the loss of seats, the Steamboat Springs Chamber Resort Association appointed a task force last winter to address the issue. Its recommendation appears on this year’s ballot as Referendum 2B.

The Steamboat Ski and Resort Corp. is committed to contributing a minimum of $1.1 million each year for the five years the tax is in effect, which is the average of our contributions during the past three years. In addition to being the first money in to pay for the air service, Ski Corp. also will continue to spend millions on marketing to support the air program. We will make additional investments to support air service as we are able to expand into new markets in the next five years. Ski Corp. also will continue to sign the airline contracts and will have ultimate responsibility to make the payments in the event there is ever a funding shortfall.

A great deal of information on the airline program, and on Referendum 2B specifically, has been collected and is available at www.yes2air.com. I urge anyone who has questions about the importance of this initiative to visit the website.

We all have shared in making this community the envy of other mountain towns. By voting “yes” on Referendum 2B, Steamboat Springs will be taking the one step within our control to influence our economic success: first stabilizing, then increasing, the number of direct winter flights into Yampa Valley Regional Airport.

This election, I strongly urge you to vote “yes” on Referendum 2B. It matters to our community and its future.

Chris Diamond

President and chief operating officer, Steamboat Ski and Resort Corp.

Comments

Scott Wedel 3 years, 1 month ago

"More than $30 million has been invested to date"

And what have we got for that investment? A strong ongoing operation? Nope, after spending $30M on the issue, now we need to tax ourselves to raise a million plus per year to toss into the money pit.

"As a result of the recession, airline consolidation and increased fuel costs, we have seen dramatic increases in costs per flight. .. If this trend continues, the adverse economic results to all of us will be significant."

Oh, so this tax won't be enough of a subsidy for long. And yes I went to www.yes2air.com and see that subsidy per seat is increasing by about 30% a year for the past 4 years. So to deal with this trend then we need a sales tax hike every few years?

That trend is certainly alarming. So the solution is to throw money at the problem until it is bankrupting us?

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Scott Wedel 3 years, 1 month ago

And what is so annoying by all the claims of how good and great the airline subsidy is for just a little bit of money - then Ski Corps would gladly fund more. If it was as effective as they say it is then they'd be willing to pay for the entire program as Vail Resorts does for the winter air program into Edwards.

The reason they are going to the taxpayers is because their own data shows rapidly increasing costs and for whatever reason, they know they cannot operate the program as effectively as Vail Resorts, and thus need the taxpayer to help bail them out.

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mavis 3 years, 1 month ago

MAYBE IF the price of season passes went to a REASONABLE rate this wouldn't be on the table. The more Long time LOCALS I talk too--- the ones here for more then for even only 15 years CAN'T afford to buy passes for their kids LET alone their families. They are doing skate sking, cross country skiing and a lot of other activities to teach their kids.

I am 5th generation local on 3 sides.... I grew up skiing EVERY day..... yet I can't do that for my kids... they will learn to skate ski and snow shoe since that is affordable. I refuse to pay for your luxury airline tax.

If I got paid for my performance and taking my kiddos to another level and training the teachers I work with to improve, then I would agree with data driven pay. I want it and welcome it.

The ski hill can pay for itself, and teachers should be paid based upon their data. If you give one person the strugglers EVERY year and they make the growth they should be paid for that. If you are going to cluster then tachers need to be compensated accordingly.

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captnse 3 years, 1 month ago

Perhaps we just need somebody to run ski area efficiently. Lower lift tickets and people might come to SS. Dont ask the community to pay for airline pay offs

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dave mcirvin 3 years, 1 month ago

I'm not a tea party leaning voter nor an exclusive "free marketeer-trustafarian" but Chris, how is this (yes on 2B) not a bailout where the top principals are private equity-hedgefund boys from Fortress-Intrawest? Until the economy-recession, employment vastly improves, a large number of families are not going to travel long distances for an epic ski vacation.

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cindy constantine 3 years, 1 month ago

As President and CEO, you serve at the whim of the board of directors. Because you have been on board here in Steamboat for years and years, Mr. Diamond, you have been successful providing millions and millions to the bottom line for your hedge-fund investors--for that I applaud you. But to now come to the hard-working taxpayers of this fine community just so MORE can trickle down to the bottom line is just corporate greed at its finest. I look at this initiative as nothing more than big business intimidation. I hope the majority of the voters are smarter than that . . . . . . VOTE NO on 2B!!

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BeCoolHoneyBunny 3 years, 1 month ago

Can someone tell me what the percentage is of people/tourists who fly into steamboat in the winter compared to driving?

Why can't Ski Corps increase their contributions to the subsidy? Why must 1.1 million be their cut off?

I think we should first look into what the numbers are this winter before we tax ourselves. Will more seats equal more tourists? Will less seats equal less tourists?

The recession I believe is to blame for less seats filled, not how many seats are offered. Let's stop trying to compare everything to 2007. It will be a long time before we get back to those kind of numbers.

Why are we voting this year for more taxes and less freedoms? It should be the other way around.

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Bill Dalzell 3 years, 1 month ago

I am honestly torn on the issue. I think the seats are important, but its a matter of who should pick up the tab, as well as, when is enough is enough on sales tax. At what point does a sales tax rate inhibit purchases? I feel approaching 9% is a bit crazy.

To quote yes2air

"Without reliable non-stop air service, Steamboat will be less competitive with other resorts and our vacation-based economy will suffer."

That's a pretty silly statement for a ski area with no base area and the highest lift ticket price in the nation.

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Kevin Nerney 3 years, 1 month ago

Why is this not a county wide vote? Since I live in the county I won't get to vote no on this subsidy(tax) but I will have to pay it if it passes. Isn't that taxation without representation? Didn't we have a revolution over such things two hundred thirty some years ago? Never forget!

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S_G30 3 years, 1 month ago

This reminds me, on a small scale, of what our president is trying to do with his jobs bill. Tax the rich so the goverment has more money with no indication of where the money will be spent. Why would anyone be ok with being taxed more with no indication of what their money will be used for.

In this case, our money will be used to provide more seats to Steamboat. So now that we fixed the supply how are you going to address demand. To me this sounds like this was a decision that was made quickly, and Ski Corp is just assuming that with more seats more people will come. I have seen no talk of how they are going to fill these seats. The above says that " In addition to being the first money in to pay for the air service, Ski Corp. also will continue to spend millions on marketing to support the air program. We will make additional investments to support air service as we are able to expand into new markets in the next five years." This sounds like throwing money at the problem to me. With no specifics on how thigs are going to be done differently. What will be done differently to entice more visitors? Current ticket prices are crazy, Season Pass prices make no sense. Lodging is saturated and overpriced. For the last 3 seasons I have bought a pass in Summit county rather than here for $350!!! I would have never thought that I would live in a ski town and have a pass to a different area.

Show us how you are going to fill the seats and you might get more support, but until then your are just throwing money at the problem. In my opinion this has been a poor campaign to get this passed.

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Scott Wedel 3 years, 1 month ago

Well, today's paper shows the exceptional level of deception which The Chamber and the Pilot feels is needed to win the election.

First pretty deception for the paper to print in the format of an article an opinion piece from the Chamber in news section of the newspaper instead of the opinion section.

Second, the article contains flat out lies. Is is simply a lie to say that the loss of 45,000 seats equates to a loss of about 37,000 passengers. We have the data of how many passengers flew into YVRA when there were 45,000 more available seats. It was about 14,000 more passengers two years ago when there were 45,000 more seats. Not "about 37,000"..

Third, we have already experienced the loss of 45,000 seats and the 14,000 passengers. The tourism economy has stabilized and actually seen a recovery in winter sales tax even as direct flight passengers decreased the past two years. Thus, to say it will have the "gravest of consequences" if 2B does not pass is straightforward refuted by the recovery in tourism over the past two years even as passengers into YVRA has decreased.

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kyle pietras 3 years, 1 month ago

This program isn't new, we've all been helping subsidize for quite a few years. It does suck, but it needs to be done. Nail done the pennies if you want but it brings in people...people spend money. If we get snow like we always do, it needs to be easy for people to fly in. $

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Steve Lewis 3 years, 1 month ago

I have yet to decide how I will vote. I do know I want a more stable plan from the managers of this program.

Escalating to 160,000 inbound seats is simply the wrong goal. Its the right fit for an ephermeral ski corporation hungry to boost the next quarter profits. But the wrong fit for long term stakeholders in Steamboat.

Because that escalation calls for blowing $$ into a larger airline bubble that WILL eventually deflate. Maybe in 2015, or maybe 2018. It could be the bean counting decision of executives at mega airline corporation X, or similarly, it could be a forced consequence of fuel prices we know will keep rising. Worse, The cynic in me even wonders if the program's downfall will come the year after ski corp unloads its real estate.

Nowhere in this debate does anyone weigh the future hazard of growing this bubble. Why should we induce 10 new restaurants and 200 new condos into Steamboat if we will not have the passengers to support them in 2018? This example applies to every profession we have.

If Scott W is correct, his final paragraph above makes an important point - we lost seats and years later have managed to find a new equilibrium.

I would vote yes to a sales tax that supports a sustainable long term goal or even a slowly diminishing number of seats. That is to say, I would support "stabilizing" the number of inbound seats, because I want a stable economy. I am reluctant to sign on to Chris Diamond's plan - growing a larger bubble.

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Sam Jones 3 years, 1 month ago

Just for the record - Steamboat does not have the highest lift tickets as some seem to believe on this blog. Here are the facts for the upcoming season:

Ski Resort Ticket Price

Arapahoe Basin $69

Aspen/Snowmass $99

Beaver Creek $99

Breckenridge $94

Copper Mountain $74

Crested Butte $87

Keystone $94

Loveland Ski Area $59

Ski Cooper $42

Steamboat $97

Telluride $92

Vail $99

Winter Park $92

I would bet firmly that a drop in ticket prices below Winter Park's $92, would encourage folks to drive a bit further and visit for the week (or weekend). Drivers will trump flyers in a recession without a doubt. Solutions should address demand, not supply and more seats is a supply side promotion. Undecided on 2B but leaning the other way now considering possible other options to drive tourism.

Just an FYI

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Scott Wedel 3 years, 1 month ago

If I am correct? Well eat data from yes2air.com (site has it as a jpeg image so numbers are hand copied): 2005/6 seats 137,150 passengers 103,035 2006/7 s- 151,160 p- 110,350 2007/8 s- 162,700 p- 111,201 2008/9 s- 158,349 p- 96,890 2009/10 s- 138,142 p- 87,549 2010/11 s- 118,360 p- 82,514

So yes, in last two years seats have dropped 39,989 while passengers dropped 14,376. But they have the nerve to LIE and say the loss of 45,000 seats corresponds to 31,000 passengers.

And you can see how during the economic boom that 2005/6 to 2007/8 that they added 25,199 seats while adding 8,166 passengers.

The optimist in me hopes the program downfall is the summer after the first year after the tax passes by the public outraged that the tax bought a fraction of the number of promised tourists. That the downfall is not the end of the program, but the end of the LMD giving the check to pay the contracts signed by Ski Corps. That the downfall is getting people like Steve Lewis whom are not deeply beholden to the tourism business on the LMD. That the downfall is when the LMD will be willing to go to the public with honest projections of costs and passengers.

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BeCoolHoneyBunny 3 years, 1 month ago

S. Wedel,

I think they are comparing 2010/11 with 2007/08 and then rounding the numbers. Those number would be 44,340 loss of seats equal 28,687 less passengers when comparing those two seasons. Looks like they are cherry picking numbers for their own agendas.

The problem is this ridiculous idea that we can compare the years right before the bubble burst and the last few years. There should be an * by 2005-2008 just like Barry Bonds' HR record.

A third number needs to be include. The snow totals for each year. I bet those numbers play just as much a part in how many seats are filled compared to how many are offered.

How about putting up billboards in cities that display the snow totals each day here in Steamboat? Ski Corps is always good at fudging those numbers too.

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Ed Miklus 3 years, 1 month ago

At last Thurday's election forum the proponents of 2B were asked to hold an open public forum where all of the public's question would be answered with no limit on the number of questions nor for the time it takes to answer those questions. It hasn't happened because the proponents including Ski Corp management knows this proposal could not stand up to public scrutiny. It is a taxpayer bailout pure and simple an an attempted boondoggle of the Steamboat Taxpayer.

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Steve Lewis 3 years, 1 month ago

The "bailout" label may be oversimplified. We all do benefit from this program. I know I benefit indirectly, and certainly my friends in the restaurants, retail, lodging businesses benefit directly from these flights. The problem is, its also true Ski Corp takes the lion's share of the benefit while carrying only 1/3 the cost.

Some complaints I fully agree with. We are handing tax money to a private board whose goals are too narrow, if not self serving. City Council let us down again with poor negotiating acumen. They had the opportunity caveat our $$ contribution with accountability from the LMD. Tagging the tax money for the airline payments only frees up LMD's other funds to use as they please. Scott W is correct that the City should have seats on the LMD board.

City Council missed another aspect of the negotiation. The above list of ski pass prices is good, albeit negative information I hadn't previously understood. Certainly Steamboat's airline seats would have higher occupancy if Steamboat ski passes were cheaper. Hard to look at that list of ski pass pricing, look at this tax request, and remain naive about Ski Corp's character.

If City Council had better represented the taxpayers in negotiating the LMD access to our tax money, this ballot would be a lot easier to support.

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Bill Dalzell 3 years, 1 month ago

Sam you are joking right? Your numbers are not right. You need to check your sources. Steamboat website has a 3 day ticket at 297. Unless my math is wrong that would bee 99 a day. Aspen just as an example also has at least advanced ticket pricing cheaper than Steamboat. The whole point of the argument, however, is that Steamboat is a great area, but should not be charging world class prices.It is not Aspen, Telluride or Vail.

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Scott Wedel 3 years, 1 month ago

CoolHoneyBunny, Well, it is hardly realistic to attribute the decline of 14,310 passenger from 2007/8 to 2008/9 because of the reduction of 4,351 seats. But it appears that you are correct, that is part of their analysis on how a lack of seats is costing us tourists. So if we could just restore those flights that had those 4,351 seats then we could back 14,310 tourists. Surely, the airlines must make good money on those flights that have over 3 tourists per seat.

Whether or not Ski Corps pays their fair share is presumably open to debate. But it should be obvious that when they sell vacation packages then they have the ability to chose how much of the package deal is lift tickets vs airfares (vs lodging, etc). So they can say the package deal took $100 off of airfares and so publicly financed airline subsidies have $100 revenue shortfall to cover. Or they could say the package deal took $100 off of ticket prices and the airline revenues got full fare pricing. So which accounting method do you think is more likely? And exactly who is given access to the data to see if that is happening? Well okay, who outside of Ski Corps is given access to that data?

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BeCoolHoneyBunny 3 years, 1 month ago

If the program was really worth the money then Ski Corps would kick in the extra $$. The economy drives these numbers, not how many seats are available. I think Ski Corps know this is a poor investment and is why it has gone to the people to finance the air program.

"With limited resources, we have been forced to reduce service by 27 percent throughout the past three years (2007-08 to 2010-11). Never in the 25-year history of the program have we seen this kind of reduction." Wonder if the recession had anything to do with it?

Ski Corps increased the number of seats by 17% during the boom years of 2006-2008. Then they were slow to decrease them when the recession hit. Poor management of the program in the past few years in my opinion. Now they want to increase seats by 6% while increasing the cap to over 3.5 million.

If the tax fails does Ski Corps plan to make an effort to downsize the program? Or will they deplete funds in order to try to attempt to pass a tax onto the citizens again?

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Verleen Tucker 3 years, 1 month ago

Mr. Diamond: The information missing from your letter...How many people who will have to pay the tax cannot afford the price of a lift ticket or a season pass? To ask people to pay a tax to financially support the corporations behind a recreation that they cannot afford to enjoy is ridiculous.

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Chad Fleischer 3 years, 1 month ago

Here's a serious fix to a money problem. Take the over 500 units on VRBO.com/Home Away and have the city actually claim lodging tax from the owners. We talk about lodging numbers being down but they are not down they are unaccounted guests staying in our community tax free. When is the Chamber going to take a look at Home Away and VRBO and account for these beds in the lodging barometer? There is one Sales tax enforcer for the City sales tax who has to chase down/audit over 500 VRBO units. Not going to happen. There is money to be found in many other areas that can be used for all kinds of City and maybe even air programs if the effort was there. I think Howelsen Hill and PArks and Rec deserve a hell of a lot more money and service than they are getting currently but we are not voting for a tax for them. We continue to shrink their budget when it is the one true asset for locals...hell its the reason most of us live here. Why are we not voting to increase taxes to better our lives, our time, our enjoyment????? I am not against the air program tax but I am against the fact that we are not comparing apples to apples we are voting on this initiative and this intitiative only. Is this really the best place for over one million dollars to be spent annually? What about turning the chairlift on at Howelsen now and again or having hours where moms, dads and kids can all go play on the hill without the place being closed half the time. Yeah it costs money, doesn't make money but at least it ours. We need the air program and I think the tax is a good thing to continue to move the community forward but in return for our votes I ask this of Ski Corp. 1. Lower your annual pass for locals- with local ID 2. When you make $31,000,000 in net proceeds it needs to come back to the likes of Howelsen Hill for the benefit of the community as a whole. If we give you 1.1 million we need to see money dedicated to Howelsen Hill. Lights on, snow guns on, chairlifts on type money and it needs to be dedicated for this cause. 3. Groom during the day for our visitors! And the excuse that it is too dangerous and our mtn is too unique to do it is a joke.
4. Do something to Rendezvous Lodge before the place collapses on all our tourists we fly here to go skiing. What a hell hole and nightmare for our guests...unless its suddenly cool to have Christmas ski day lunch on the floor with your wife and kids???? Vote Yes on 2B and Ski Corp please show some spine and do whats right for locals and the tourists alike!

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cindy constantine 3 years, 1 month ago

All good arguments for voting NO ON 2B, Chad. Your points are well taken, but if these measures are not put in place prior to an initiative being put on the ballot "they ain't gonna happen, son." The fund is not projected to run out until 2014. It is NOT going to run out tomorrow and it is too late at this point in the game to expect any additional planes coming into Hayden for this season. VOTE NO to this initiative so we can create a better funding source AFTER Council and the community has the opportunity to ask Ski Corp the important questions.

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cindy constantine 3 years, 1 month ago

$31 million in NET profits you say?????? And Ski corp needs my family's $50 more than we need it?? Really????? I mean Really?????

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