TAPP refocusing on drive market, adjusting lodging rates

Looking at 10–20% decrease in LMD tax for 2023

By Katherine Nettles

Lodging revenue and airline passengers have slowed from previous years, but signs are pointing to a relatively stable year for the Gunnison Valley if tourism industries continue to adjust rates and expectations based on the Gunnison County Tourism and Prosperity Partnership (TAPP) data. In a mid-year review with Gunnison County commissioners last week, TAPP representatives discussed the slowdown as the COVID frenzied years have passed. They also discussed marketing trends, flights, lodging and sustainable tourism.

“Nimbleness and speed will be key,” said TAPP director John Norton of how the valley can respond to changing markets. 

Marketing

TAPP marketing director Andrew Sandstrom reported that winter marketing for 2022-2023 performed well but did see declines from last year. He said TAPP’s spending on marketing compared to last year was relatively flat, with a couple of ad buys through Matchstick Productions and Inkwell in addition to the organization’s media agency, Colvita. There was a 37% increase on “impressions,” or ad views, across TAPP’s markets with Colvita from last year, but TAPP reported that news of the heavy snowfall did not translate to more ad viewers or more traffic to lodging websites coming from Texas. Web traffic was down 35% from Texas; however, Colorado grew 50% in web visits, which Sandstrom explained was likely because Denver and the drive market are more engaged in the powder potential. Organic website traffic was up over 30%, indicating at least some Front Range travelers were paying attention to snow and responding to the bountiful conditions. 

Sandstrom explained that TAPP implemented BookDirect this winter as a new lodging tool allowing website visitors to search dates and get rates and availability for all the lodging properties in the Gunnison Valley and book directly with lodging partners without commissions or extra costs. He said there has been positive feedback from lodging partners to have a centralized website, and TAPP counted 12,155 lodging searches over the course of the winter which translated to 6,251 referrals to property websites from people searching specific dates. 

Sandstrom said the 2023 marketing plan launched in April with a stronger focus on online conversion actions and more money targeting the drive markets where there was a decline last year.

Lodging

In 2022, the Local Marketing District (LMD) still increased revenue despite a drop in the total number of visitors because of large rate increases. But as Norton explained, it will be important to be nimble and “it appears that the days of continued rate increases are coming to an end;” lodges have heeded the advice of TAPP and started dropping rates about 15% this summer to encourage demand and higher occupancy. There has been a slowdown in air travel as well, but fares are beginning to moderate. Lodging numbers have responded to the lower rates, and according to the TAPP report, “if occupancy gains hold, we are likely to see a similar number of people in our market like we did in 2019. While this would mean a further decline in LMD revenues, it would still be much higher than what we saw in 2019.” 

TAPP data has predicted that tax collections in 2023 will be down between 10% and 20%. “We are currently outpacing our competitive set,” said Sandstrom, which are in many cases closer to a 30% decrease.  

County commissioner Laura Puckett Daniels asked if TAPP has numeric goals for occupancy and/or maximum average daily rates, or how else they measure their goals.

Norton says they run comparisons, focusing on the four summer months, and ignoring April/May and October/November. “Our effort has been to generally grow lodging on those months, whether with occupancy or rates,” he answered. “We have had occupancies increase in the past to the point where our lodges… felt comfortable raising their prices.”

Stewardship

TAPP has worked closely with the Sustainable Tourism and Outdoor Recreation (STOR) Committee to help spread information to visitors about sustainable practices to keep in mind when using local trails, camping and to share with readers more about STOR’s stewardship role in the valley. This has been done mostly through an online presence through the local distribution of 600 PACT kits to help people responsibly dispose of human waste in the outdoors and through funding the STOR Corps members on the ground, providing education and outreach to the public and helping maintain trails each summer. 

Sandstrom said the PACT kits have gotten tremendous media coverage and have been a huge hit across the state where total distribution of the toilet kits has totaled 3,500. 

The PACT kits are made by a Gunnison County-based company, which also serves another of TAPP’s missions: economic development and exportation.

Economic development

TAPP’s ICELab program, which promotes entrepreneurship in the valley, has started teaching an entrepreneurship class at Western Colorado University’s Rady School of Engineering. Program director David Assad said the ICELab’s coworking space continues to grow, and they are preparing to host a three-day startup weekend in August with participating companies from around the state and possibly beyond.

Assad said the outdoor industry hub does well with the early startup phase for new companies, and the Moosejaw Accelerator program “puts us on the map as a place for people to relocate or start a biz in the outdoor industry.”

“This is our fourth year running the Moosejaw Accelerator,” said Assad. “The goal is to kick off a new company.” 

Assad acknowledged that for startups in the valley, the biggest barrier is fundraising.

“We almost always hear the same problem is raising capital in the early stages, so we’re trying to address that,” he said through some new funding summits. 

The ICELab hosted an outdoor industry funding summit last winter, with seven investors attending over several days to connect with participating companies both in social settings and in outdoor adventures like Nordic skiing. “Five checks have been written for companies that attended the summit,” Assad said of those results.

“In August we will have 10 more investors and seven companies in Crested Butte,” he continued. “This is just another piece of that outdoor industry and what we’re trying to create.” 

Assad summarized that there are a lot of outdoor-related companies here in the valley, and there is a lot of support available for them.

After listening to the report and several rounds of questions, county commissioner chairperson Jonathan Houck reflected, “We’ve got some challenges with lodging that has in some cases been converted into long-term rentals, and an ongoing challenge in the North Valley with servers and the short-staffed service industry. The [LMD] revenue piece is going to be challenging in the long term,” he acknowledged. “This is going to be an interesting year. We’re on the tail end of the pandemic and its influence.”

Being nimble and strategic, he concluded, hearkening back to Norton’s introduction, will be key to success.