The Crested Butte News Serving the Gunnison Valley since 1999
Money goes mostly to Friends and Family Fly Free program
The Mt. Crested Butte Town Council divvied up a share of its admissions tax dollars on Tuesday, September 6, giving Crested Butte Lodging the $28,700 it had requested along with $270,000 to the Crested Butte Mountain Resort air service program, and still managing to save more than $65,000 for a rainy day.
This year, the Town Council saw a jump from $225,000 to $300,000 in admission tax dollars—earned through a 4 percent tax on ticket sales—it could give away for marketing and travel programs. Three applications came in and two were considered for grants.
Crested Butte Mountain Resort vice president for sales and marketing Daren Cole and director of central reservations and revenue management Jeff Moffett went to the council to make a personal pitch last week for $300,000 from the town’s admissions tax fund to help cover the rising costs of getting consistent air service to the Gunnison Valley.
“[Last year] we did increase revenues, which were offset by higher costs,” Cole said. “Continental had a very strong load factor and average fare in December, but the mid-winter revenues fell short. A lot of that, with all of our programs, was the increase in fuel costs. I believe our average increase in fuel costs was about 20 percent over the course of the year.”
He said the arrangement CBMR and the Gunnison Valley Rural Transportation Authority (RTA) had with United Continental and American Airlines had reduced the number of seats coming into Gunnison-Crested Butte Regional Airport between January and April by 10 percent, while the number of passengers stayed roughly the same, year over year.
Both airlines, which operated as three separate carriers last year, were reported to have strong load factors through December, February and March, with revenues falling short in January.
But for 41,000 seats, CBMR and the RTA had to split the full $1.9 million minimum revenue guarantee required by the airlines to fly into airport that doesn’t draw a big enough stream of passengers to make it worth the trip.
So to fund its share of the minimum revenue guarantee, CBMR is turning, in part, to the town that sees a big benefit from the extra traffic. Last year, Mt. Crested Butte pitched in $202,000 to cover the guarantees and, according to Cole, it was money well spent.
“The return on investment via tax generation was 20 percent,” he said, pointing to tax revenues of $241,000 he said could be traced to the airline program.
Last year, most of the town’s money went to the Friends & Family Fly Free program, which sold 1,800 seats and constituted almost 8 percent of the traffic coming into Gunnison-Crested Butte Regional Airport during its run, Cole said.
“During that time, the average fare was $417, which was up from the $390s the year before. The average reservation [cost] was $4,480 and the average length of stay was 4.5 [days] and that went down just a little bit,” he said. “[The program] generated 4,800 skier days and 78 percent of the people who booked these packages were new guests.”
Cole pointed to the number of new guests as proof that the resort isn’t just “paying for the same guests to come back” and reaches new visitors with the Friends and Family program.
After hearing specifically where the town’s money would be going, councilman Gary Keiser clarified the figures CBMR provided regarding the town’s return on investment saying, “The admissions tax that was generated was $13,600. That is from the fly free program. And the sales tax collection during that time was $118,000. So $118,000 [plus $13,600] in taxes came in from our $200,000 investment?”
Cole confirmed that the 20 percent return on investment he had quoted the council was based on all taxes collected throughout the season.
This year, the agreement CBMR and the RTA have negotiated will bring about 20,000 seats from Dallas between mid-December to April, minus five Tuesdays that have been historically slow and were dropped from the schedule to save money. Another 13,000 seats will come from a twice-daily regional jet flight from Denver. Four thousand seats are coming from Houston for an overall loss of about 4,400 seats.
“Although, this year, the total number of seats is lower than it has been previously, we can customize the schedule to maximize the service we have on days when we’re generating [traffic],” Cole said.
Still, the Resort’s projection is that 24,000 people will come in those 36,000 seats. The economic impact, he said, would be about $31 million, including $3 million in tax revenue.
Crested Butte Lodging submitted the second application for admissions tax funds for its marketing program that targets families looking for ski vacations. The council supported both applications, but with a total of $300,000 to split between the two, opted to grant Crested Butte Lodging’s request in full and give CBMR $270,000 for its air service program.
