Breckenridge finds bright future after 2010 lodging tax
December 23, 2012
In 2010, Breckenridge Town Councilman Mike Dudick led a charge for a lodging tax increase to generate marketing money for the town of Breckenridge.
Some residents worried the funding wasn’t needed or the added cost might deter potential visitors, but in the throes of the recession, voters approved the tax hike.
Two years later, Breckenridge’s marketing pocketbook is approximately $1.2 million fatter, but is the town better off economically?
While it is difficult to determine the return on investment of money spent to promote an entire town, rather than a single business, those who monitor the pulse of the local market say yes.
“I think the clearest indicator of the success of the increased marketing dollars is that lodging revenue in the town of Breckenridge has grown,” Dudick said. “All indicators are that we’re doing better than what we have in the past.”
As of October, short-term lodging sales tax revenue was up 6.2 percent year-to-date over 2011. Bookings for rooms in Breckenridge were tracking up 2 percent from last year for the month of December, even though occupancy at 16 other mountain resort destinations was down more than 12 percent for the same month, according to data released by the Mountain Travel Research Program at the end of November.
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Sales tax numbers for the retail and restaurant industries also trended well this year.
“Though the lodging numbers are still far behind our prime years, the resurgence of retail and restaurant tax revenue can certainly point to the overall business sector being better off than in 2010,” stated Toby Babich, president of Resort Managers, a Breckenridge lodging company. “We will never know for certain if the additional funds were the lone cause, but I am sure they were a component of the growth we can witness in 2012 …”
But the gains haven’t been purely numeric. Since the lodging tax increase passed two years ago, the town has put up hundreds of thousands of dollars to enhance its events calendar.
In the last two years, Breck succeeded in landing three consecutive bids to host stage stops for the USA Pro Challenge, a road bike race that draws tens of thousands of spectators to Summit County each year. The town set aside $150,000 in 2011 and 2012 to back programming for the event.
The town also agreed to cough up close to $100,000 in lodging expenses to bring the Dew Tour back to Breckenridge this year.
The new marketing funds have been used to back special events, and to increase spending on research.
“Rather than just throwing it out there and seeing if it works, we’re trying to understand what motivates a traveler to select Breck as opposed to another destination,” Dudick said.
The budget for group sales through the Breckenridge Resort Chamber (BRC) has tripled and spending on online advertising has increased dramatically since the tax measure passed.
The Breckenridge Marketing Advisory Committee, an appointed panel of local business owners and community members, then sets high-level priorities for how the money should be spent. The BRC, a private direct marketing organization contracted by the town, spends the money to market Breckenridge.
The lodging tax measure passed ahead of a banner snow year for Colorado, which was then followed by a year of historically low precipitation. The weather patterns likely also played a role in Breckenridge’s market trends over the last two years.