“Summit County has to look at itself in the mirror and say (maybe we need to) change the way that we treat people that come in and try to be a little bit more receptive to having them here… I don’t think that Summit County in general, has rolled out the red carpet to tourists” Does Breckenridge need a “change in attitude”? Is lack of tourism the root cause of Breckenridge/Summit counties woes? Is Breckenridge already a zoo? What does this mean for real estate prices?
Context on the quote for more tourists
Months after the last budget amendment, Silverthorne has once again told town departments to reduce their budgets following three business closures anticipated to impact the town’s tax revenue.
The news of town departments being asked to cut 5% of their already revised 2025 budgets prompted Silverthorne Town Council to discuss where the town’s business landscape is headed and if tourism should be treated differently by those adverse to it.
The request follows an April budget appropriation where millions of dollars in expenditures were cut to account for a downward trend in sales tax including an 8% dip year over year in January and an approximate 4.8% dip in February.
Finance director Laura Kennedy said planned closures for an outlet store, Williams Sonoma, and the Summit Ford dealership will likely result in a drop in revenue that could take the form of a 3% hit in the general fund.
Tim Applegate, a Silverthorne councilor along with other councilors are blaming the closing of two outlet stores and the Ford dealership on lack of tourism.
Regardless of your take on tourism in Colorado’s mountain towns, blaming the loss of these businesses on lack of tourism is absurd. First, who goes on vacation in Silverthorne and decides that they are going to buy a truck, I can see people buy tshirts or some other small items, but a truck?
Second, the outlet stores in Silverthorne closing have nothing to do with tourism or the lack of, the business model of shopping at an outlet has radically changed. Why go to an outlet when you can buy the same thing for cheaper online and have it shipped to your house. It is not like a tourist all the sudden needs a new frying pan at Williams Sonoma when they are traveling from out of state!
Request to change attitude not unique to Summit County
It is interesting that the councilors are blaming a lack of locals not embracing tourism as the reason for stores closing. Unfortunately this is not unique to Summit County or Silverthorne. A few years ago, the Steamboat Chamber unveiled a new campaign “kindness floats the boat”. Long and short, the campaign was not well received and very short lived.
It might be a good idea to remind many city councils that full time residents are not employees of Disney world. The reason many full time residents are tired of over tourism is because of the huge impacts from traffic, overcrowding on slopes, restaurants, etc… Long and short there are huge impacts to full time residents.
Much deeper issue with tourism
Just saying that residents need to be “nice” and more receptive to tourism is a terrible solution that glosses over the root cause. It is like telling someone to just stop coughing and yet the root cause of the cough is a sinus infection that is causing the cough.
The visitation to the Colorado mountains has been turbocharged since Covid and that has led to conflicts and overall, a degradation in the user experience for both tourists and residents. The root cause of the impacts is much more nuanced than just saying we need more or less tourism.
Think of tourism like a business
The issue with almost every ski town in Colorado is that the response to tourism is either yes or no. Essentially increase tourism or decrease tourism. Unfortunately looking at just two solutions to a complex situation is what has led us to the issues we are facing in every mountain town.
Just like any business there are profitable and unprofitable customers. Today, almost every ski town in Colorado treats all tourism the same. This is a mistake. Here are two scenarios:
- Day Tripper: Assume someone drives up to ski at Copper Mountain, they bring their skis and lunch, they stop for beers at the end of the day. Assuming they have two beers for 10/beer, the tax benefit of a 7% rate is around 1.4 dollars to Summit county. There is also a benefit to the community from this spending of lets say 14 dollars after you factor in the cost of the beer, fixed costs, etc… But at the end of the day Summit county made 1.4 dollars off this visitor and 14 dollars was disbursed within the county to business profit, labor, etc… Long and short, this visitor likely cost the county more than they made when you factor in police, roads, search and rescue, fire, etc…
- Out of state/international Visitor: Now assume you have an out of state/country visitor with a family of 4 that is going to vacation for a week, this family will rent skis, take ski lessons, eat out, etc… They easily spend around 10k on the vacation which means 700 into Summit county via sale tax and assume lodging was 5k of the total another 700 in lodging taxes and over 9k in economic benefit to the county. It is pretty clear that there is substantially more value in the international/long term visitor.
Colorado ski towns can control what type of tourists they seek to attract
Unfortunately most ski cities/counties do nothing to differentiate amongst tourism. For example I think many full time residents would be in favor of focusing on higher return visitors as day trippers in many cases cost more than the economic benefits to the county and the residents. Even with this information that is not rocket science, there is still a perception to just increase or decrease tourism.
Just like any business, there are profitable and unprofitable customers, as a lender, there are loans that might generate fees at closing, but over the long term they actually decrease my bottom line. I avoid these loans even though I get less closing fees as I know the true impact. Every Colorado ski town/county should take this lesson to heart.
What is a better solution than just being nice?
For City Councilors to blame a business failure on tourism or lack thereof is absurd. They need to take an inward look at two items
- Right size county/city budgets: Just like cities/counties throughout Colorado, most ski towns gorged on the Covid boom and had huge increases in their city budgets including new city halls, increased staffing, etc. These budgets need to be rightsized for the current economic conditions.
- Quantify the costs of different tourism: Every city needs to stop complaining about too much tourism or not enough tourism and actually do something about it. There should be a number put by different types of tourism and at the end of the day, use this information to guide decisions to encourage and/or discourage profitable vs unprofitable tourism. For example, if day tripping from Denver is not profitable for Summit county, build less parking for people who visit for the day and any parking where they are not staying overnight and they aren’t a resident of the county they pay a larger parking fee. Each city/county will have to determine what works for them, but the status quo is not working.
Why should real estate owners care about tourism
A great place to reside and visit is also a great place to buy real estate. With the over-tourism in many cities, the user experience for full time, part time, and visitors has been degraded. This will ultimately lead to real estate prices appreciating considerably slower in the future. Everyone who owns real estate has a vested interest to help balance the competing demands of tourism to better balance the user experience for everyone. If this is not resolved there could be profound consequences for real estate owners in particular ski towns.
Summary
Councilors blaming locals for not “being nice” and wanting more tourism is absurd. The real reason for the woes in each Colorado ski town is that city councils/cities have created the tension over tourism by treating every tourist the same and continuing to clamor for more tourism regardless of the impact to the community and the user experience. Don’t forget that the issue of tourism also directly ties into the affordable housing woes facing each town.
Until cities/councils begin to bifurcate profitable vs unprofitable tourists this issue is going to continue to worsen and you will see some cities wanting more tourism, while others take a hard stand and want to hugely restrict tourism by drastically decreasing the availability of nightly rentals. The only solution is for communities to wake up and begin targeting profitable tourists and either excluding (through pricing) unprofitable tourists or making them profitable somehow. At the end of the day, our current trajectory clearly is not working and a profound change needs to occur quickly. If cities/councils are unable or unwilling to change the degradation of the user experience of both residents and visitors will force a more profound shift that will lead to huge revenue drops along with a continued loss of full time residents.
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