Headline: Inflation-adjusted sales revenue down in Breck
BRECKENRIDGE – Lodging, retail and restaurant tax revenues in Breckenridge haven’t kept up with those garnered in 1995, when adjusted for inflation.
“It’s not a pretty picture,” said Councilmember Jim Lamb. “It’s down, it’s bad, it’s a bummer; what can you say? Everything’s down.”
Town council members this spring asked town finance director Judy Ferris to compare this past ski season’s lodging, retail and restaurant revenue with previous ski seasons and adjust it for 1995 dollars. That was the first year the town broke down taxable sales revenue into different business sectors: restaurants and bars, grocery and liquor, short-term lodging, retail sales, supplies and utilities.
Those dollars are based on an inflation rate of 4.5 percent, estimated by consultant and analyst Ford Frick of Denver, whom the town has hired throughout the years to conduct economic studies.
In a report to council, Ferris said taxable retail sales in each month from November to March was below that in the same months in 1995, when adjusted for inflation – 24 percent down in the retail sector alone.
“What causes me concern is that 1997 was our best year ever, and in retail, we’re down over 33 percent,” said Councilmember Dave Hinton. “We have to be concerned about that. I’m getting a little impatient with everyone saying, “Oh, but it was a terrible year.’ It wasn’t a terrible year. If it’s the third-best (skier) year on record (nationwide), and if the ski area had a great year, being down over 33 percent (in retail) over 1997 isn’t good.”
“This means that business isn’t growing,” said Lance Hillis, audit and reporting administrator for the town. “It means it’s pretty much stagnant or falling off. It means we’re selling less skis, less hamburgers.”
That’s not news to town council members, who have heard from merchants in town that business is flat – and no one can explain why.
Numerous reasons have been discussed, including changing skier demographics – older skiers getting out of the sport and younger ones not spending the money – the impacts of the Buddy Pass, the mix of retail items for sale in stores, the slump in the national economy, people taking shorter vacations and competition from other tourism sectors.
Another possibility could be “downvalley leakage,” a trend seen in Aspen in which Aspen residents spend their money in less expensive big-box retailers down the valley.
Breckenridge officials were asked to determine if such stores as Wal-Mart and the Silverthorne Factory Outlet stores are luring Upper Blue residents away from local shops.
Further baffling economic experts is that the ski resort has reported record-breaking skier visit numbers throughout the past several years – and some believe they will do so again this year. Additionally, destination skiers, whose numbers have been on a steady decline since the early 1990s, were up this year. But according to sales tax reports, the typical big spenders held on tight to their money.
“They were here. They just didn’t spend,” Lamb said. “And what’s really scary, is that we’re down during a year when the ski area did really well. Imagine if skier numbers were down 20 percent.”
Town council members also spent much of the winter evaluating what they can do to get people to spend more money in town. They installed a bridge over the Blue River between the Sawmill and East Sawmill parking lots, erected signage directing people to town and asked bus drivers and other front-line employees to encourage people to visit downtown.
They are also trying to determine how to revitalize downtown, primarily by redesigning sidewalks and parking on Main Street and providing live entertainment in the Blue River Plaza.
The figures don’t surprise Mayor Sam Mamula.
“I’ve felt like this for a few years, that our sales were not as robust as everyone thought,” he said. “It’s a peculiar phenomenon that’s taking place. The question is, what do we do about it?”
“The days of putting butts in beds is over,” Hinton said. “We’ve got to not only put butts in beds, but take those butts out of cars and get them onto Main Street. We can’t sit back and accept this. We need to figure out what’s wrong and fix it. I don’t want to be here a year from now and say we’re down 40 percent.”
Jane Stebbins can be reached at 668-3998 ext. 228 or firstname.lastname@example.org.
At a Glance:
Business sector Taxable revenue 1995-96 Taxable revenue 2001-02 Difference
Retail $34.256 million $26.311 million 24 percent
Restaurant $23.628 million $20.304 million 16 percent
Lodging $42.455 million $33.696 million 21 percent
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