Our View: Keep the airline program aloft
March 16, 2011
Steamboat Springs — When the Steamboat Springs City Council meets April 5, it will ask its constituents for advice on what do with $600,000 in annual lodging tax revenues that will be freed up when the bonded indebtedness on Haymaker Golf Course is retired in three years.
We think there is a direct line to be drawn between lodging taxes and the pending fiscal crisis in funding Steamboat's ski-season airline program. And that leads us to conclude that the most effective and most appropriate use of the funds is to strengthen the airline program.
Resort officials predicted in February that the airline program would burn through the last of a $1 million reserve fund by the end of ski season 2012-13. Declining visitation in a tough employment market, discounted room nights and volatile oil costs all contributed to the situation.
Because the airline program is fundamental to Steamboat's success as a resort-based economy, we urge city officials to begin planning now to add the 1 percent tax to the separate 2 percent lodging tax already collected by Steamboat's local marketing district.
The local marketing district tax is used to underwrite minimum revenue guarantees the airlines demand before they agree to fly here. Before the tax on lodging was put in place, collecting airline revenue monies from individual business owners presented an annual crisis.
The beauty of the local marketing district tax is that we collect the necessary funds to support airline service from our guests and make good use of it ourselves. Vacationers traveling to Steamboat subsidize their own airline flights, allowing local travelers and businesses to capitalize on air service that surpasses that of almost every other community of this size. Could there be a better investment in the valley?
The 2 percent local marketing district tax paid for about half of the $2.5 million budget for revenue guarantees this winter, and Steamboat Ski and Resort Corp. covered the balance. Research done on behalf of Ski Corp. estimates that every vacationer who gets off a plane at Yampa Valley Regional Airport spends $1,100 to $1,200 in the valley.
Still, local marketing district tax receipts are in decline. City officials have said local marketing district revenues dropped from $1.48 million in 2008 to $1.14 million in 2009 to $1.04 million in 2010.
No other program that we can think of has succeeded in driving destination visitors to our community like the airline program.
We think dedicating the original 1 percent of lodging tax to airline program funding when it becomes available in 2014 is the least painful and most effective way of securing the health of our resort economy.