Steamboat Springs The city of Steamboat Springs is banking the extra money from sales tax revenues that are outpacing budgeted amounts, and sales tax gains could continue into the next year as indicators are positive for key contributing sources.
Local economist and Steamboat Springs City Council member Scott Ford recently revisited an analysis of the sources of the city’s sales tax and broke it down into three groups: local population, non-lodging visitor spending and lodging.
Tax collections from residents and lodging were down in 2012, the full year of data available, compared to 2008, but consumer confidence bodes well for local spending, and lodging prices already are marching back upward.
Using the sales tax collections during shoulder months, Ford subtracted lodging to estimate the average level of spending by residents. The local population accounted for between 62 and 65 percent of total sales tax collections, according to Ford, looking back as far as 2007.
The city’s collections in 2012 were 12 percent lower than the boom year of 2008, with 13 percent of that decline caused by a decrease in spending by the local population.
Ford said Thursday that he compared the changes in resident spending to the Gallup U.S. Consumer Spending survey and found a high level of correlation between what Americans reported they’d spent the previous day and changes in the level of sales tax collections attributable to the local population in Steamboat.
From 2008 to 2012, the Gallup survey showed about a 20 percent decline in the average amount respondents said they’d spent the previous day, from $90.26 to $70.74.
The smaller drop in local spending than Gallup’s national figure likely is because of Steamboat’s relative affluence, according to Ford. To date for 2013, Gallup’s national average daily spending survey is trending more than 4 percent above 2012.
Ford’s analysis also showed tax collections from lodging as being down about 22 percent in 2012 compared to 2008.
That decline likely is a mix of fewer visitors in Steamboat and visitors paying less on average for lodging.
About 26 percent fewer people boarded planes at Yampa Valley Regional Airport in 2012 than in 2008, but according to Ford, the amount that visitors spent unrelated to lodging was 3 percent higher in 2012 than in 2008.
Tax collections for Steamboat run counter to national tourism trends, according to the Bureau of Economic Analysis. The most recent release of tourism data showed accommodations spending at its highest point in more than a decade in 2012 while food service, entertainment and shopping have not fully recovered to 2008 levels.
Scott Marr, owner of the Holiday Inn of Steamboat Springs, said that rates and visitors fell for a couple years after 2008 but that by 2012, the average room rate for his hotel had recovered and surpassed 2008.
Larry Mashaw, vice president of sales and marketing for Resort Group, said that different markets such as hotel rooms and condos behave differently but, in general, rates can drop precipitously after major events like 9/11 and the most recent financial crisis and take a long time to crawl back up.
Mashaw said he’s “fairly confident” that the lodging sector is going to continue to see year-over-year improvement.
To reach Michael Schrantz, call 970-871-4206, email mschrantz@SteamboatToday.com or follow him on Twitter @MLSchrantz
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