Gauging the economic toll | SteamboatToday.com

Gauging the economic toll

Steamboat likely to see tourism fall

— People who watch over Steamboat Springs’ tourism-based economy were processing their own emotions this week as they watched and listened to the human tragedies in New York and Washington, D.C. this week while beginning to assess what it could all mean for the local economy.

City Council President Pro-Tem Kathy Connell, who also runs a property management company that rents vacation condominiums to tourists, was calling on the community to face the tragedy and formulate a meaningful response.

“We are dependent upon people coming here by air,” Connell observed. “We’ve got our employees’ livelihoods to take care of. We also need to start taking stock of ‘what can we do as individuals’ about the terrorist hijackings.

“What can we do as businesses? What can City Council do? We need to get beyond the ‘me’ of it. I’m feeling a great need to talk about this as a community.”

Connell recalled that the last period of great national emergency, Operation Desert Storm in February 1991, the community’s destination tourism industry suffered immensely.

Steamboat Ski & Resort Corp. Vice President of Marketing Andy Wirth said ski area executives have already begun to reassess how changes in public air travel and the mood of consumers could affect the early part of the ski season and ultimately, their business plan.

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Wirth said phone volume at Steamboat reservations was off 20 to 30 percent from midday Tuesday through midday Thursday, but he was surprised reservations hadn’t taken a bigger hit.

“Anything above zero was good news,” Wirth said.

Central Reservations Manager Paula Sears is constantly monitoring travel Web sites this week, Wirth said. And Ski Corp. airline specialist Janet Fischer is in frequent contact with the major airlines that fly into Yampa Valley Regional Airport during ski season.

Steamboat has invested heavily for the first time this year in daily jet flights on Continental Airlines from Newark International Airport. The flights are meant to tap into the greater New York market. Wirth said “O&D data” on air travelers’ cities of original and their destinations lead him to the conclusion that New York is one of the two most important ski markets in the nation, the second being Chicago.

Already this week, Wirth has temporarily suspended the ski area’s direct mail campaign in instances when it is specifically targeted for air travelers. He and other ski area executives want to assess whether it is the right message at the right time.

This is the time of year, Wirth said, when loyal repeat visitors to Steamboat book vacation plans.

Wirth said he contacted Colorado ski Country USA and its executive David Perry to ask him to initiate research over the next 60 days that will shed light on the mood of the traveling public its fears and trepidations, as well as its intent to travel.

Another travel industry expert Wirth contacted immediately was Peter Yesawich of the Florida consulting firm Yesawich, Pepperdine & Brown. Yesawhich’s clients include Disney and Universal Studios, and Wirth will rely on him for additional understanding about how the crisis is likely to affect discretionary travel.

Scott Ford, who runs the Small Business Development Center at Colorado Mountain College, said the Persian Gulf War of a decade ago did affect the balance of the ski season negatively. This time around, the crisis is taking place just as momentum for the upcoming ski season is building.

Ford said he’s concerned that the specific demographic Steamboat appeals to within the ski industry upper middle income families will be more susceptible to the downturn in the national economy that was in place before the terrorist attacks. Similarly, the economic uncertainty brought on by the terrorist attacks could be more likely to impact the discretionary spending of middle class people than it might impact the habits of more affluent people.

Vail and Aspen can rely far more heavily on affluent travelers who are likely to continue a strong tradition of an annual ski trip no matter what comes, Ford theorized. People occupying Steamboat’s demographic are more apt to vacation twice in five years, or three times in five years, Ford said.

“The more they feel a little iffy about their own financial well-being, the more likely they are to think they don’t need a ski vacation,” Ford concluded.

Despite the economic uncertainty, Ford believes two important cogs in Steamboat’s economy will continue to be pushed along by demographic trends. The parents of today’s aging baby-boom generation represent the first generation of American blessed with significant real estate wealth, Ford said.

The preceding two generations left estates that were confined, for the most part, to family heirlooms.

However, the baby boom generation has begun receiving the greatest transference of wealth in history. That trend will continue to influence Steamboat’s economy for at least another five to seven years, Ford predicted.

Ironically, Ford said economic crises have the net result of more relocations to Steamboat Springs.

Recessions and natural disasters alike tend to result in people reexamining their lives, Ford said, and in a significant number of cases, people seize on watershed events in their lives to make changes, like making that move to Colorado they’ve always dreamed of.

Ford is a former vice president of product development for The Travelers, who at one time in his life worked in lower Manhattan’s financial district, not far form the World Trade Center. Like many of today’s Steamboat residents, he reached a point in his life when he needed to escape.

“After Hurricane Andrew, we had a definite spike in relocations from Florida. I’d be surprised if we didn’t get that same sort of spike this time,” Ford said.

Fishing a crumpled dollar bill out of his pocket, Ford said Steamboat probably isn’t’ the first place new “immigrants” visit in Colorado. But after they’ve visited Aspen, Telluride and Vail and partially recovered from the shock of how expensive those places are, they then see that their dollars will go further in Steamboat.