Passengers unload after taking a ride on the Douglas C-47 Skytrain military transport aircraft at the Wild West Air Fest at Steamboat Springs Airport during Labor Day weekend in 2011. Summer air service again has become a topic of interest for Steamboat as dissatisfaction with the reliability of the current daily flight to Denver has mounted.

Matt Stensland/file

Passengers unload after taking a ride on the Douglas C-47 Skytrain military transport aircraft at the Wild West Air Fest at Steamboat Springs Airport during Labor Day weekend in 2011. Summer air service again has become a topic of interest for Steamboat as dissatisfaction with the reliability of the current daily flight to Denver has mounted.

Marketing the 'Boat: Local summer air service once again a topic of interest

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When driving on a Houston highway last month, Chuck Porter spotted a billboard advertising daily flights to Eagle.

Marketing the 'Boat

Among Colorado’s mountain resorts, the competition is fierce to become year-round destinations rather than strictly ski towns. In the competition to capture summer tourists, resort communities are throwing large amounts of money toward marketing themselves and their amenities.

“Houston was steaming hot,” said Porter, who serves on Steamboat’s Local Marketing District board. “It must have been 100 degrees and 90 percent humidity, and there was this picture of Vail. It was pretty enticing to be honest with you.”

Porter sat on the Local Marketing District board, which oversees the air service program, when Steamboat had a daily summer flight from Houston that was subsidized by the district’s tax revenue.

It was an expensive and short-lived experiment.

Summer air service, which is not currently subsidized, again has become a topic of interest for Steamboat as dissatisfaction with the reliability of the current daily flight to Denver has mounted.

Although the latest charge is led by residents who are seeking more convenient travel for business needs, the prospect of increasing the market for potential summer visitors also is attractive.

“Primarily, our summer effort and summer marketing focus has been on the driving market,” said Steamboat Springs Chamber Resort Association CEO Tom Kern. The Chamber received $600,000 from the city of Steamboat Springs for summer marketing this year.

Steve Dawes, a member of the Local Marketing District board, said with the maturation of the resort and increase in second-home owners, there’s been more interest in summer flights.

“Given the limited financial resources that we have, what can you try and do in the summer that would have a meaningful impact?” he said, referring to Steamboat’s summer marketing resources, which are limited compared with other Colorado mountain resorts.

“It’s one thing to bring a plane,” he said. “It’s another thing to have the marketing dollars in place.”

Porter said reliable summer air service would at least help supplement the drive market.

Opening up another market would help location-neutral businesses, he said, and provide another avenue for Steamboat to market its amenities.

“I think we’re going to have to have the air service component as a first step,” Porter said. “I think we’ve got to show the infrastructure to get the interest.”

Steamboat won’t have the same level of air service in the summer as it does during the winter, Porter said, but reliable service to Denver and possibly an alternative market would benefit the community.

Carriers who fly into Yampa Valley Regional Airport during winter receive revenue guarantees funded by the 2 percent lodging tax within the Local Marketing District, a 0.25 percent sales tax earmarked for winter air service and contributions from Steamboat Ski and Resort Corp.

“If we’re going to have a summer air program, we’re going to need to back it up with a summer marketing program,” Porter said, adding that Steamboat has plenty of attractions to highlight.

The financial risk and reward of summer air service also has to be considered, Dawes said. Summer visitors spend less while they’re here than winter visitors.

“How much are we willing to spend per passenger to get them here?” he asked.

Dawes said some knowledge might be gained from looking at how the summer air program at Eagle County Regional Airport works and what types of passengers fill those flights.

“It’s certainly not apples to apples,” he said about the comparison with Yampa Valley Regional Airport. “But there’s something to be gained.”

Steamboat does a great job with the summer marketing resources it has, Dawes said, but “to jump into summer air is a quantum financial leap.”

Kern said the discussion of funding summer marketing isn’t strictly a Chamber issue and should be a broader community discussion.

The way air service has been funded has changed in the past, Porter said, and the way it’s structured now doesn’t have to stay the same.

“We should never be closed to new concepts and new ideas,” he said. ■

Comments

scott bideau 11 months ago

The problem with previous summer service was not enough data to understand how successful they would be.

That all changes when you do a true make study to identify routes with great potential based on current demand that "leaks" to other airports. You then gain intelligence on which airlines can most cost effectively serve that route and get them to fly in on their own accord. See steamboattoday.com/news/2013/sep/20/location-neutral-business-group-studying-air-servi/ for a simple and cost effective solution to growing summer and winter service WITHOUT revenue guarantees.

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mark hartless 11 months ago

"How much are we willing to spend... to get them here?"

Well, let's see... let's raise the lodging tax, which discourages visitors. Then, we can subsidize the airlines which will get back the visitors that the expensive hotel rooms kept away...

You guys are too clever by half. Your "solutions" to problems largely of your own making are hillarious. Reminds me of the old Nursery Rhyme...?

There was an old lady who swallowed a cow. I don't know how she swallowed a cow! She swallowed the cow to catch the goat... She swallowed the goat to catch the dog... She swallowed the dog to catch the cat... She swallowed the cat to catch the bird ... She swallowed the bird to catch the spider That wiggled and wiggled and tickled inside her. She swallowed the spider to catch the fly. But I dunno why she swallowed that fly Perhaps she'll die.

There was an old lady who swallowed a horse - She's dead, of course.

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Mark Ruckman 11 months ago

Mark H, I'm willing to bet that you have NO data to support your continued stance that the lodging tax has discouraged visitors from coming to Steamboat and your implication these same visitors decided upon another destination without the 2% lodging tax.

Reminds of a story about the Boy who cried Wolf.

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Michael Bird 11 months ago

The continuous problem still exists - locals cannot buy empty seats at greatly discounted prices even though it would reduce a subsidy need. Ex: $250.00 is more than $ 0 but this simple fact is ignored so the result is larger subsidies are paid. When, if ever, will the locals stop being scammmed ?

Imagine for a moment if the plane loads were almost 100% and then compare the revenue if locals were offerred low cost tickets producing almost 100% loads. Yes, it could happen.

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scott bideau 11 months ago

Micheal: the chances of turning the entire airlines pricing model upside down just for Steamboat locals is next to zero. I think it's important to stay focused on what is possible, which is data analysis to determine if there really is demand there to serve with additional or better optimized supply. If this demand exists, airlines will come on their own. If it doesn't - then revenue guarantees (current or future) are simply subsidies, not guarantees.

My personal hypothesis (based on considerable anecdotal evidence) is that the demand is there, but not well understood.

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Michael Bird 10 months, 4 weeks ago

My idea would not alter their pricing model. We guarantee X amount. When revenue is short, we pay the difference. If empty seats were sold to locals at any amount, the amount (subsidy) would be reduced by this amount. When the contract is signed, this provision can be included. It does not affect the airline's revenue.BTW, I agree with you concerning data analysis but I don't think that the demand is there for non-winter traffic

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Scott Wedel 11 months ago

I observe the difference in perspective.

Vail ski corps which runs their winter airline program asks the question: What flights can we fill?. Their financial reports states that their intent is to make their guarantees and thus getting their revenue guarantee money returned. So they pay NOTHING in airline revenue guarantees to bring in tourists.

Steamboat LMD asks the question: Which flights can we afford? Their approach is to spend money on guarantees and they have no expectations of making revenues.

I think Scott Bideau is suggesting the right approach of getting people together and deciding what flights we want and the steps that will be taken to fill those seats. We may need to make revenue guarantees to get the flights, but we should then get the money back when we follow through and fill enough seats.

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scott bideau 11 months ago

"latest charge is led by residents who are seeking more convenient travel for business needs"

This is oversimplified and inaccurate.

As stated multiple times in the letter at steamboattoday.com/news/2013/sep/20/location-neutral-business-group-studying-air-servi/, we have a desire to understand the demand for all air travelers as a combined group: local leisure travelers, business travelers, and tourists. This point was mentioned three times in the letter and the location neutral business community is pushing this idea not just for our own benefit, but because as business people we believe in data driven decisions. Especially when it comes to our tax money being spent.

The reason why that summer Houston flight was an expensive and short-lived "experiment" is there wasn't enough data to support the decision. The process in making informed decisions on air service is pretty simple actually:

  1. Obtain data from a proprietary airline database showing all airline tickets purchased for travel at nearby airports other than HDN (mostly DIA, but possibly EGE and others) with credit cards whose billing zip code is within our area. This is your "local air travel" demand, and includes both leisure and business travel. It also identifies specific routes and schedules of routes taken. This doesn't cover people buying tickets with a corporate card (billing zip code not in the area) or those purchased through travel agencies, but there are industry standard models and multipliers to cover these scenarios.This data is not public record and requires a small fee to be paid to an airline consulting company.

  2. Employ statistically significant surveys of tourists, finding out how many flew into alternate airports (most likely DIA) instead of HDN. The term "statistically significant" is important, because last I checked the Chamber only surveyed a hundred people or so at the airport through a pretty informal process, so that data simply can't be trusted.

1 and 2 identifies the "hidden demand," customers that could be served by HDN. The question is, what would make them choose HDN instead of an alternate? It's not just price and increased flights. It's also schedule optimization to allow them to make a connection into/out of HDN, that route being served by their preferred airline, etc. In other words, there is a lot of data that should go into selecting a new route, making schedule changes, etc.

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scott bideau 11 months ago

Once you find a route with good demand, there are industry consultants who help estimate the average cost and revenue per seat mile for each carrier on a given route. The airline with the lowest cost/revenue ratio is the one your ask to serve that route because they can be most profitable at it. If they ask for a revenue guarantee - use this data as leverage rather than simply giving them how much they ask for in the revenue guarantee.

These are not new concepts in the airline industry. Countless airports and communities do exactly this to gain better service with less or even no revenue guarantees.

It's time we follow these best practices instead of picking a route like Seattle in the winter or Houston in the summer because, as Scott Wedel says, "we can afford it" and Ski Corp wants to try it out. Let Ski Corp subsidize the flights they want while the tax payers chase after routes we know will be successful because the data shows it! I'm confident the tax money can be limited to $50k or less per year instead of millions each year. But it will take a cultural change, some hard work by our government entities (including a re-chartering of the LMD board's mission), and accountability to the return on investment produced by the sales tax.

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Scott Wedel 11 months ago

The LMD tax sunsets in just 4 years. And they are not going to wait until the last election before trying to reauthorize.

An optimist would hope they don't continue with a failing program until it becomes unpopular and ruins any hopes of getting any public support for any airline program.

Regardless, I am pretty sure the voters could approve a new measure that reworks the LMD tax at any time.

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mark hartless 11 months ago

Let me tell you a quick story about how you are being scammed.

I was in DIA and arrived in time to catch an 11:30 am flight to Steamboat instead of the 3:50 pm flight on which I was booked (times are approximate). The plane was ready for departure to Steamboat and was, at best, only half full. The airline refused to let me on the flight before I coughed up an additional $75 change fee.

Now, the next flight might have been full and allowing me on the earlier flight might have made room for another passenger to fly in on the late flight, but do you think the airline cared? NOPE!

My choices were to pay the $75 or wait till 3:50 to fly to Steamboat.

So what if I was a skier??? I could arrive in town early enough to shop or ski a half day but without my $75, or I could arrive in town later with my $$$ but without the time to shop or ski. The airline got the $75 that a vacationer could have spent in your town instead!

Either way the airline you suckers are proping up is screwing your customers/guests and using YOUR money in the process. Whoever negotiated these subsidies doesn't even have the good sense to build an agreement with these airline tyrants that cuts out this kind of absurd abuse of the very passengers you want to come to this town.

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Mark Ruckman 11 months ago

Since you couldn't answer my prior challenge to support your implications you now decided to attack industry wide policies by the airlines.

I look forward to you providing examples of where a small town with a subside was able to negotiate a contract with a global company that is in the Fortune 100 to set aside their global pricing policies at no cost.

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mark hartless 10 months, 4 weeks ago

The answer to your "challenge" is basic economics. Raising the cost of things (including vacations) means that fewer people want to purchase them or are able to do so. Anbd I'm not attacking "industry-wide policies", I'm attacking the suckers who agree to subsidize said airline while that airline SCREWS its target market/ customers.

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Mark Ruckman 10 months, 4 weeks ago

No, you attacked the people who set up the relationship with the airlines as basically being stupid for not negotiating out industry wide policies.

Man up, you throw down the attacks and fling around implied truths. Share the facts to back up your statements.

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Rick Pighini 11 months ago

It's a big world out there. You should move to a town or country where everyone is as smart as you and leave us suckers alone.

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mark hartless 10 months, 4 weeks ago

There are, no doubt, some folks with a genuine interest in improving recreation and jet service to the area.

There are also many folks who want to enjoy living in a remote corner of the world but want others to buy their bike trails and have empty jets standing by 20 minutes away at their disposal.

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Mark Ruckman 10 months, 4 weeks ago

All from a person who enjoys all that our tax $ have to offer by creating vast areas of public land so they can ride their snowmobiles all winter.

You get enjoyment from my tax $ and I don't scream about the noise and air pollution created by your preferred method of recreation. Why can't you leave others to enjoy their recreation created by tax $'s that you are not even paying?

Lastly, it has been pointed out there is an opportunity to increase competition (think economics & lower prices) and provide more reliable schedules while potentially reducing the spend with the airlines. No one has stated they want empty jets / turbo props standing by at their disposal (childish wording).

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John Weibel 10 months, 4 weeks ago

Optimizing flights seems a better course of action. Do we need flights coming in multiple times a day or would one flight with a larger more reliable plane be better?

That way less labor is needed at the airport reducing costs and maybe gate fees.

The flight can connect to Houston a couple days a week San Fran or elsewhere. A flight with a stop in denver is almost the same as a direct flight but allows more people to fill it. Over time that one flight might approach capacity at which point a second large jet flight could come in the same way.

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mark hartless 10 months, 4 weeks ago

Mr. Ruckman,

Your tax dollars did not create the forests... God did. They were there long before you arrived. Uncle Scam calls himself "administering" them which is a joke considering the sorry state of Colorado's forests these days- some of the sickest and yet most protected forests on earth.

Furthermore, unlike bike trails, they did not require excavating, paving, purchasing or right-of-ways, etc. They require no on-going maintenance other than the mostly sponges who call themselves working for the USFS but who do little more than harrass me.

And, if they had been harvested properly instead of protected to death by tree huggers and the same gubbamint you credit with their very existance then they would still be green to this day instead of dead and threatening to fall on me as I ride this winter.

It is unfortunate that your tax dollars (and mine) go to the USDA. Believe me sir, I would be as giddy as a school girl if that department (and a few others) was, along with the exorbitant amount of taxes they waste, was eliminated TOMORROW.

It is, however, telling that you (and I would expect many others) believe that something as natural as a forest could not exist without the gubbamint. Can't live a day-week-month without gubbamint; can't imagine life without gubbamint; can't envision even so much as a FOREST taking care of itself without the help of the beloved, omnipotent, omniscient, omnipresent gubbamint...

It's quite sad truthfully...

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Mark Ruckman 10 months, 4 weeks ago

Once again you deflected from the point I raised. You are only able to enjoy the forest because they are public lands paid for and supported by tax $. If taxes hadn't bought the land, then you would have to be friends with a major corporation / landowner to enjoy your choice of recreation.

Since snowmobiles are not part of the above natural forest, maybe we should ban them because we spend tax $ managing programs that allow snowmobiles, we plow parking space etc.. Then you can start feeling better about some taxes not being wasted :)

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Scott Wedel 10 months, 4 weeks ago

Well, the forest service was created in response to extensive deforestation. Much of the East Coast was originally settled to send back prime lumber, particularly for masts, back to England.

And there was a reasonable fear that western forests could also be wiped out.

But USFS has generally done a miserable job of limiting clear cutting of prime areas or maintaining the forest's health in other areas.

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mark hartless 10 months, 3 weeks ago

So long as I'm alive snowmobiles ARE part of the forest... and if that pisses you off then it tickles me.

And if they are not part of the forest then neither are Mtn bikes and skis, ski lifts and lodges at 10,400ft.

Nor are bike trails along the river part of the "nautral forest".

So what??? Is your light switch part of the "natural" environment???

And I'd be happy to be friends with a major corporation or landowner in order to use their land. Unlike leftists I don't recoil at the idea of capitalism.

In fact, I think we should put Disney in charge of the National Forest; they would do a better job.

Come to think of it they might do better at the Hayden airport and maybe even put them in charge of Washington DC. At least they know how to run a business...

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mark hartless 10 months, 3 weeks ago

And you don't spend any money on snowmobile programs. Snowmobile trails throughout Colorado (which I personally think are a waste of time and $$$$ and would love to see shut down) are groomed, marked and maintained with funds derived ONLY from snowmobile registrations.

But since snowmobilers are so magnamous those trails are open to use by everyone... even those like yourself who want to kick us out of YOUR forest.

Furthermore, snowmobilers even pay on highway fuel taxes for gas they burn OFF highway in the forest. So we contribute to the upkeep of raods while we are not even using them. Can you compete with that???

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Mark Ruckman 10 months, 3 weeks ago

LIke a well oiled old clock, easy to wind up but rarely accurate

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