Our view: No reason to ground eatery

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Editorial Board, February to May 2012

  • Scott Stanford, general manager
  • Brent Boyer, editor
  • Tom Ross, reporter
  • Karen Massey, community representative
  • Jeff Swoyer, community representative

Contact the editorial board at 970-871-4221 or editor@SteamboatToday.com. Would you like to be a member of the board? Fill out a letter of interest now.

A disappointing first season of operation for Yampa Valley Regional Airport’s Three Wire Bar & Grill means it’s time for Routt County to adjust course, not abandon ship.

Based on the restaurant’s gross revenue during the 2011-12 ski season, we think the potential remains strong for the county-operated restaurant to be profitable. Even break-even status would be an improvement over its performance in its first few months, when food and alcohol sales were good but expenses were much too high.

Airport Manager Dave Ruppel told the Routt County Board of Commissioners last week that Three Wire lost about $30,000 during the six months of the ski season. That total doesn’t include the restaurant’s start-up costs and county overhead charges.

It was encouraging that the restaurant, which was built as part of the airport’s Phase 3 improvements, grossed more than $120,000 in February and March despite a rough ski season that saw the number of travelers coming through YVRA decrease an estimated 5 percent from the 2010-11 ski season. By comparison, during the busy ski season of 2007-08, the former Paradise Bar & Grill at YVRA did more than $130,000 in gross revenue during the months of January through March.

Less encouraging, however, is that Three Wire spent nearly $250,000 on personnel during the ski season flight schedule. Ruppel admitted to the commissioners that the number was too high, and he said with a season under its belt, the restaurant now knows where staffing levels need to be. He also expressed his belief the restaurant can comfortably raise the price of its food and drinks next season.

It’s important to note that the airport is a self-sufficient facility that operates much like an enterprise fund. Losses at the restaurant aren’t subsidized by county taxpayers, but rather by all the travelers and airlines that use the airport.

Critics of the county’s decision to operate the airport restaurant no doubt feel vindicated by Three Wire’s inability to turn a profit from the get-go. We can’t fault their skepticism of county government’s ability to effectively operate a business that 50 private restaurateurs refused to bid on.

But as we’ve said before, decent food and beverage service at YVRA is essential to the travel experience, and not having a restaurant isn’t an acceptable option. The extreme peaks and valleys of seasonal airport traffic at YVRA makes Three Wire one of the toughest restaurants to operate in the Yampa Valley. But it must operate, and the county must demand better results during the 2012-13 ski season.

Comments

Scott Wedel 2 years, 6 months ago

Probably not worth shutting down, but also clearly a business that should not be run by the county.

Since there are expected losses of $30K with county overhead of $70K then YVRA could pay a private operator $75K and save money. A private operator would be far more likely to control food and labor costs than county employees.

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John Weibel 2 years, 6 months ago

"It’s important to note that the airport is a self-sufficient facility that operates much like an enterprise fund. Losses at the restaurant aren’t subsidized by county taxpayers, but rather by all the travelers and airlines that use the airport."

The airport is hardly self sufficient... did not a tax on sales taxes get passed to support the airline industry? Without those taxes the airlines could pull out and the profit center for the county would go away.

If the airport actually makes $800,000 for the county yet the taxpayers and ski area need to pump in $3,000,000 then would not it make more sense to take any profit out of the airport fees and such to make it more cost effective to fly into YVRA as opposed to needing to subsidize flights? Exactly what Scott is suggesting for the airport to do with the restaurant we are doing for the airlines. Heck if the county wants to run the three wire then why not open up Steamboat Air, we can have the best airline in the country all government owned.

Robin Hood did not steal from the rich and give to the poor - he stole from a corrupt government and gave it back to the taxpayers.

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max huppert 2 years, 6 months ago

they can pay me alot of money and I will make it run right. there will be no loss. you know who I am so send me a e-mail or call.

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Brian Kotowski 2 years, 6 months ago

Color me skeptical. The Pilot's last article on the restaurant had Ruppel citing over-staffing as among the reasons for the shortfall - and while the food was good, the service at Three Wire was abysmal nonetheless . I don't see that improving with reduced personell.

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John St Pierre 2 years, 6 months ago

Curious if anyone noticed that the 1st wide-bodied 767 landed at Eagle-Vail w 300+ passangers on board 2 months ago...... being only half the distance than DIA.. I wonder how much longer YVRA really has in the broader view.....

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Scott Wedel 2 years, 6 months ago

Sep, Slow service is very rarely a staffing issue, but is an organizational issue. Sure a kitchen can have a bad night, but from the comments, the slow service seemed to be a common issue.

The claim that it lost only $30K is the sort of creative accounting that would cause an SEC investigation if it was a publicly traded company. It makes no sense that $70K of county administrative costs are not counted.

Also, note that they are not paying rent to recover all the money spent on remodeling the space. It will need to be remodeled again in no more than 15 years. Amortize that cost over 15 years adds another $50K or so to the annual loss. So reasonable accounting would put the real loss at closer to $150K. Pretty sad to have a loss that is about a third of total sales. But all that remodeling money has already been spent so that loss exists whether or not the restaurant is open.

But this is government so it isn't their money. Even better it is a government enterprise so there is even less of an incentive for the overall enterprise to make money. Excess revenues from one sector might as well be burned off.

If this was private sector then YVRA/county would decide that operating a restaurant is not in their field of expertise. Thus, they would want to contract it out and expect to subsidize it. And if they trusted the free market then they would expect to find an operator willing to do it for the same or less than what it costs YVRA/county. And the private operator would have the profit incentive to run it more effectively.

It is absolutely bizarre the way YVRA/county complained that the previous operators weren't great and failed to pay rent only for YVRA/county to go in with a huge remodel, no rent, expert restaurant consultant, uncharged administrative costs and still lose a chunk of money. If previous operators had been given those benefits then they probably would have done well.

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Scott Wedel 2 years, 6 months ago

John, ,I agree absolutely that we should be making a far greater effort to utilize Eagle Airport as a regional airport.

There has been far too much of an attitude of thinking that airport helps a competitor and should be avoided. We would be better off if we viewed it as a competitor providing a nearby airport that helps us. We can let them subsidize flights that carry our tourists!

There is no viable future of our airline subsidy program with the projected increases in subsidizes. It appears to already be cheaper to offer free taxi rides to Eagle airport or DIA than the bring in planes with too many empty seats to YVRA.

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Angie Robinson 2 years, 6 months ago

I just wanted to chime in because readers who have not been there yet may think everyone's experince has been abysmal. My husband and are Hayden residents and have eaten there atleast 5 times, and never ever had a bad experience! We enjoy it very much. The food is always good. The service is always very friendly. Even when someone called in sick, and they were short staffed, everything was fine. The Sunday Brunch is wonderful. Maybe if more people put their money where their mouths are, and make a short trip to eat there, it won't do as poorly next year.

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