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RTA postpones vote on funding proposed airline ticket buy-down

Board members ask: Does this mesh with the RTA’s mission?

By Toni Todd

Whose role is it to bring visitors to Gunnison County—the Gunnison/Crested Butte Tourism Association (TA), or the Gunnison Regional Transit Authority (RTA)?

That was the question debated at the RTA’s board of directors’ meeting Friday, July 14 in light of a request from the Air Command subcommittee (AC) for $200,000 in support of a buy-down program subsidizing United Airlines tickets from Denver this winter.

“The objective,” said Crested Butte Mountain Resort’s (CBMR) AC representative Scott Clarkson, “is to help people move through Denver, via United, to get to Gunnison.” The focus, he said, will be on bringing visitors from the East Coast to the valley during January, and from the West Coast all winter.

The AC includes members of the RTA, the TA, Gunnison/Crested-Butte Regional Airport (GUC), CBMR, and Western State Colorado University, to identify and negotiate specific flights into GUC.

Here’s how a buy-down works. “Let’s say a retail ticket costs $500,” said Clarkson. “We’re operating a buy-down of $200 per ticket. The guest pays $300.” Clarkson said the reservations would all go through CBMR’s Crested Vacations to Gunnison/Crested Butte Reservations (GCBR).

The TA, Clarkson said, would generate the demand for phone calls and web hits, and the team at GCBR would answer those. There’s a travel agency in the middle of all this, he said, which holds the bank of airline tickets for the program.

For example, Clarkson said, the $200,000 could buy down 1,000 tickets by $200 each. “We still need to develop an accounting mechanism for this,” he added, saying the travel agency will likely bill either the TA or the RTA for the buy-down tickets sold.

Clarkson said there would also be a lodging requirement attached to this deal, though that’s not always a requirement of such programs.

Jeff Moffett, air marketing consultant for the TA, confirmed that any lodging property in the valley making its rooms available through GCBR will be included in the deal.

Moffett suggested a buy-down not tied to lodging should be considered as well. “We have a lot of people who drive from California. How do you get those people out of their cars and on a plane?”

Air Command citizen-at-large representative Dave Clayton shared a positive experience with the one time a buy-down that didn’t require lodging was implemented. “We had some friends from Florida who took advantage of that and stayed with us,” he said, adding that those folks would likely not have come without the opportunity to purchase that discounted ticket.

“With a buy-down program,” Clayton added, “you’re paying to get a person in the seat. With a subsidy, you’re paying for seats that aren’t filled. We’re trying to pro-actively get people here.”

“The buy-down concept is not new,” said Clarkson. “We’ve been doing this for 10 years. It’s a way to isolate your destination and setting it apart from others.” He noted Jackson Hole’s successful ongoing buy-down program.

“The RTA runs off of tax dollars,” said RTA board member Janet Farmer. “Our constituents in this county want us to provide the service. I have a problem using those funds for a buy-down.” She suggested a better use of RTA money would be to save enough money to contract for an additional flight from a city we’ve lost or a new city in the future.

Board member and Gunnison county commissioner Jonathan Houck expressed similar concern. “It’s not the concept,” he said. “The buy-down concept has some value. I understand the buy-down and the benefit of it. You want someone to take that seat. But the mission of the RTA, as the community defined it, is to provide airline service and bus service, and then make it the responsibility of the TA to put cheeks in seats. That’s where I’m struggling on this…. At the top of this discussion for me is, the RTA has a role, and the TA has a role.”

“Talking about the buy-down and differentiating between the TA and the RTA makes a lot of sense,” said board chair and Crested Butte Town Council member Roland Mason. “I really feel that the Denver service is probably going to be the most important part of our air service going into the future. If we were to lose Denver, it would look like the worse thing to happen to the RTA. I would like [to see] us move forward with it for just this year. I don’t want to set a precedent….”

Mason also noted the pilot shortage experienced by airlines last year. “We had money this year, but airlines couldn’t take the money because there were no pilots to fly the planes.” He asked if the buy-down could be more modest, suggesting $100,000 vs. $200,000.

“Any movement in that direction preserves the TA’s budget,” said Clarkson.

Board and Gunnison city council member Leia Morrison added another, broader perspective. “I think there’s a larger discussion at play with the whole valley—continuing to add seats, more seats, more seats. Are we cheapening our product? Are we investing in our infrastructure so that the people we are bringing here are having the quality experience they’re expecting? It’s more than just whether we fund a buy-down or not.”

Farmer asked if it would be more practical to wait until mid-season to see how the seats fill or don’t fill before enacting a buy-down.

“In my experience,” said Moffett, “by the time you realize you’ve got a problem, it’s too late.” He shared an example of that approach and the result from several years back, when a buy-down was implemented in March because planes were arriving with too many unfilled seats. That, he said, required discounting tickets from $399 to $99, with limited results, a costly endeavor that Moffett described as “extreme.”

The RTA board may vote Aug. 4 on whether to pay for the buy-down program with RTA funds. Until then, board members said they’d research, chat with constituents and one another, in order to make a better-informed decision on the proposal.

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