RTA not ready to buy-down more tickets as incentive
By Mark Reaman
Reaffirming that those making a living in Crested Butte are essentially snow farmers, the lean crop this year is having an impact, as once-promising ski season reservation numbers have dropped off dramatically.
“The numbers have shown how quick this ski season has reversed,” Gunnison-Crested Butte Tourism Association executive director John Norton said at last Friday’s Rural Transportation Authority meeting.
Based perhaps in part on last season’s copious snowfall, early season reservations were up before the ski season really got under way. The lack of snow slowed down the pace of reservations and a thin snowpack over the holidays did not help.
Norton presented a chart based on reservation numbers compiled from the group Destimetrics. It indicated that at the end of November 2017, reservations for local hotel rooms were up 27 percent in January, 18 percent in February and down 22 percent in March. By the end of December, January reservations were down 4 percent, February reservations were down 7 percent and March was down 23 percent.
Norton’s memo stated, “We were (pardon the pun) storming into the ski season as of the end of November… At the end of December, January was behind 4 percent. A loss of 31 points in 30 days. Ugh. Same story in February. March continues to suck. It used to be the biggest and most reliable winter month. Now it’s falling out of bed. March continues to be a puzzle.”
“In the last 30 days the numbers went way down,” Norton told the RTA board at the January 12 meeting. “It shows the importance of snow. We have slowed down a bit with marketing efforts and are now stockpiling some money so if the winter conditions come back we can get that word out in a huge way.”
“I’ve seen it a lot,” added RTA airline consultant Kent Myers, a former senior vice president of Vail Resorts. “Christmas was not up to expectations and sort of like the old water cooler talk, people talk and communicate on social media. Word gets around pretty fast.”
“And the word is ‘no snow.’ There are no secrets anymore,” said Norton. “Anyway, we have money in reserve for when things change.”
“The four booking weeks in January 2017 were bigger than what we had ever seen before for that month, which can make for tough ground to make up in a season like this. And March continues to be an opportunity for us,” said CBMR’s senior marketing manager Erica Rasmussen. “We had a rather large group here last March. However, that group isn’t an annual one as they rotate destinations. Therefore, we came into the season down in March, and continue to work to make up ground. The good thing about March being an opportunity is that there’s still time to make up ground. We’re working hard to inject bookings into that month.”
“Is it worth marketing the whole vacation experience to people on the Front Range?” asked RTA board member Chris Haver of Crested Butte. “The Nordic trails are shaping up, the town looks good, there are things like dog sledding or fat biking.”
“I think it is,” responded Norton. “I was impressed when I saw guides at Eleven taking their clients out in different ways over the holidays. They had them fly fishing and fat biking and so the answer is yes.”
“That just won’t fill air seats,” stated CBMR vice president Erica Mueller.
“It’s not just us,” said Myers. “The back bowls of Vail are not open. There’s no snow anywhere and that’s a challenge. Even so, people should understand there are other things to do and it is still a vacation.”
Myers pointed out that seat occupancies are down for flights from Houston and Denver but still up for flights coming in from Denver compared to last year.
Dave Clayton of the Air Command, a group formed to help guide decisions to promote airline seats into the local airport, said the group was trying to figure out ways to fill airline seats in a low-snow year. He said CBMR had approached the group earlier this month with the idea of using money set aside by the RTA to “buy-down” or subsidize inbound airline ticket costs from the northeast U.S. and West Coast and opening it up to buy-down tickets from anywhere in the country. About $100,000 has still not been spent for the program.
“Using RTA money to subsidize buy-downs is new territory for the RTA,” said Myers. “In my opinion, we want to fill seats but I get concerned with buy-downs in general. What is the purpose and strategy? Is it to introduce people to the community? It is a tricky road, especially using public government money to benefit primarily a private business. Sure, it helps the community in general but what is the long-term strategy? What are the ramifications?”
RTA chair John Messner said he saw three main things impacting the local air program: flight availability; schedule; and price. “I think all three things need to be looked at and one of the biggest challenges right now is cost for many people.”
RTA board member Janet Farmer reiterated her opposition to using RTA funds for buy-downs. “Is it the RTA’s business to deal with price?” she asked. “It is not our responsibility, that’s more CBMR and the TA. It is a slippery slope for the RTA.”
“From a 30,000-foot level, that $100,000 could bring in people to generate maybe $1 million in overall revenues. It seems CBMR would be the prime beneficiary. If 70 percent of the $1 million goes to CBMR there is probably a problem with public perception of how the RTA’s public money is being spent to help a private business.”
CBMR vice president of marketing and sales Scott Clarkson said that the initial revenue dollars generate a “second and third spend” that is passed around the community in general.
“Whose shoulders should it fall on to provide those incentives?” asked RTA board member Jonathan Houck. “The big issue is to not forget the demand element of the equation. What is our natural capacity? Are we trying to ratchet up flights before there is real demand?”
RTA executive director Scott Truex pointed out that providing a $200 per ticket buy-down was not sustainable for the organization. He also said given the outlook, unless things change, the board should expect that the RTA will be paying the full caps on the guarantees with airlines servicing the airport this winter.
“Our thought is that the board has already approved that money and we don’t want to lose that opportunity,” said Mueller. “It would not just line CBMR’s pockets but would help fill air seats.”
Clarkson said if the snow conditions don’t change soon, the entire industry will begin discounting and using strategies like buy-downs to lure people to the resorts after February. “This is just another incentive to get them here,” he said. “Instead of just using the money for the northeast and West Coast the idea is to open it up to anything coming through Denver.”
Houck said the original idea was to use the money to target the TA’s focus on “expert, millennial skiers” from good ski markets in the northeast United States and the West Coast. Houck pointed out such skiers will probably go wherever there is good snow. “Last year was our year for that skier,” he commented.
Myers said utilizing $100,000 for a $200 per ticket buy-down would draw 500 people. “That’s a big nothing burger with the entirety of our local air program,” he said.
“We need an overall policy for buy-downs so we aren’t just shooting from the hip,” said Messner. “We need to have that larger discussion.”
The board agreed to pursue a big picture policy discussion for spending RTA money on buy-downs in the near future and they decided to not expand the current buy-down program to include more than tickets originating from the northeast and the West Coast.
As for the overall future business outlook for the rest of the ski season? Think snow and hope for a late, bountiful crop.