An uncertain forecast for TAPP

TAPP sends mixed messages of market distress and areas of stability

By Katherine Nettles

The Gunnison County Tourism and Prosperity Partnership (TAPP) is tallying several setbacks and challenges from the past year and making predictions for the year ahead as it prepares its budget for 2024. The organization is aiming for a flat tourism budget in 2024, and has suggested using $800,000 in reserve funding and making a few cuts to programs that haven’t been performing. It is also aware of its partnership and marketing strengths and prepared to play to those based on their history of success.

TAPP board president Bill Ronai told Gunnison County commissioners in an update at the end of September that the board had passed a resolution to ensure financially conservative budgets because of lower Local Marketing District (LMD) proceeds and constraints in their expenditures of those funds. 

The constraint comes from newly passed ballot measure 6A allowing up to 40% of the LMD budget to be used for workforce housing and/or childcare rather than tourism and marketing. 

“We have a responsibility to act in a financially responsible manner. Consequently, in light of this new environment, the board did pass a resolution to assure the financial soundness of the company,” said Ronai. That resolution included a provision that TAPP will not request use of more than approximately 25–30% of its reserves and will propose budgets in the future that maintain a minimum reserve of $1 million. TAPP’s current reserves are just under $3 million, so if TAPP’s proposed budget for 2024 were approved by county commissioners, similar strategies would only be a viable option for the next two years before more serious cuts would have to be made to maintain the $1 million in reserves. 

Ronai said that decision to keep $1 million in the bank is to be prepared “in case of dire situations such as forest fires or a low snow year. That gives you a sense of what the board is thinking.” 

 TAPP executive director John Norton echoed Ronai’s emphasis on the challenges of the year ahead, with LMD revenue in decline, the passage of 6A and county commissioners’ decision to allocate $1 million from the LMD in 2024 to the Sawtooth 2 workforce housing project in Gunnison. “We’ve got challenges this year probably in a bigger way than we’ve had for years—or maybe ever,” said Norton of the TAPP’s tourism plight. He said the “competitive posture” of the ski industry is greater than he’s ever seen, and that TAPP’s earlier prediction of being down in revenue by about 10% for the year was fairly accurate and mostly attributable to the 2022/2023 ski season.

“June came in [with revenue] down 11%, but July came in strong so we are now down 6%,” said Norton of the latest reports to follow a winter averaging revenue losses of around 10%.

He said that while the TAPP board’s approach means keeping the TAPP budget for marketing tourism flat in 2024, they may consider looking into additional funding from other local, regional and state grant cycles to supplement some programs.

Norton said the TAPP’s economic development channels, such as the ICELab at Western, has some challenges as well. 

ICELab director David Assad said the program “will continue doing what works in 2024.” He said they will still work on the Moosejaw Outdoor Accelerator, although Dick’s Sporting Goods announced this fall that it is closing 11 of its Moosejaw stores and this indicates the corporation may be limiting its expenditures. 

 “So, it looks like we’ll be losing our main contact,” said Norton. He said the company’s CEO really embraced local products and will be present in the valley through February. “We’re already working on Moosejaw 2024, but we need to make it happen.”

Assad said if they lose their own business accelerator program in the future, they might need to pivot and become a sponsor of other programs elsewhere to stay in the game and kep their names in circulation. 

Glimmers of good news

Assad reported that the ICELab’s outdoor industry funding summit last winter resulted in five checks written; they held a second one this year (the results are not in yet) and they are planning to do another in February. “Those are sponsored events, so they are basically funding themselves,” said Assad.

He said the ICELab’s business incubator is in partnership with Startup Colorado, “so we’ve been putting marketing dollars behind that,” with an ad campaign currently underway. 

Assad said the ICELab’s teaching entrepreneurship at Western’s Rady business school went well last year and they’ve been invited back to Rady for a second year. He said being able to open the students’ eyes to that opportunity that they can start their own business has been positive, as have local networking events like a monthly “coffee with coworkers” at the ICELab.   

Assad shared that the ICELab is now putting together airport displays of local products and services to create awareness for tourists and locals as well.

“And we’re looking to create office and warehouse space inventory across the county, because some companies ask about that when they consider their potential to move here…I do think this is a way we could expand and retain our local companies,” he said of collaborating with the county. He said he has some ideas for land the county has had for a while and could discuss in more depth later.

“The private capital issues of the past two to three years have not gone away, but there is a small group of [financiers] who want to invest and meet some local companies,” said Norton. “We want to move on that goal of making us an outdoor industry hub.”

Norton said TAPP’s partnership with Western Colorado University (WCU), particularly its Rady School of Engineering, remains strong. “Everyone’s for higher education,” he commented. 

Jenifer Blacklock, Rady department director, gave updates on the program’s recruitment and retention. Blacklock said there is great momentum, with some potential other competition, both in Fort Collins and in Arkansas using this program as a prototype.

There was a Rady career fair October 19–20 for the first time with 15 companies signed up and professional development elements in place. 

“We’re really shifting the culture, which is good,” Blacklock said of the school’s increasing competitiveness and accolades. “Culture can be hard to change.” 

TAPP is preparing to cut the budget for promoting WCU’s Mountain Sports program for 2024, however, since athlete numbers are down 9% overall, mountain biking is down 37% and there is opportunity to cross-promote it with general tourism marketing instead.

TAPP’s marketing director Andrew Sandstrom said the return on investment for the organization’s tourism marketing can be summed up as positive. He cited recent data from the travel and tourism research firm Dean Runyon Associates, which found that out of Colorado’s 64 counties, Gunnison County is the eighth fastest growing based on revenue attributed to traveler spending. “Our marketing spend during that time was about $9.3 million,” said Sandstrom. 

“But as John [Norton] said, the gains we’ve seen are not necessarily permanent,” he cautioned. 

Sandstrom said TAPP has seen a strong response to its previous marketing messages, so they will continue to focus on trails, the valley’s plentiful public lands and extreme skiing. He said they will continue focusing on driving airline bookings and lodging revenues.

He added that data research is still helping the community gain insight into the ebbs and flows of the local economy over the years. 

Commissioner Liz Smith asked how Gunnison County compares to our competitive set of other resort towns. Norton said compared to Sun Valley and Aspen, Crested Butte Mountain Resort is doing great. But he noted that Taos has had a reinvention of sorts, with the first investment they added being a children’s center, and just had a record year for skier visits. “And we were down,” he said.

Norton said Telluride has almost no market overlap with Crested Butte, but he said Wolf Creek is similar and getting more skier days in recent years.

“And maybe we bounce back. Maybe we’re up 10% this winter,” he offered.

The final element TAPP reported on was its trail stewardship program, with plans to continue focusing in 2024 on the Sustainable Tourism and Outdoor Recreation (STOR) Corps, and an initiative in the valley called DOO Colorado Right that dispensed sustainable backpacking toilet kits throughout the state this summer.

“We’re hoping to grow that DOO program throughout the state and beyond with more grants and more investors,” said Sandstrom. 

Amid several discussions between commissioners and TAPP representatives, commissioner Laura Puckett Daniels asked how TAPP intends to maintain its reserves while also trying to maintain its higher priority programs if revenue trends continue to show declines.

“I totally understand the need to pull from reserves at this time, you’re going through a massive transition,” she said. But she asked what they will do later if reserves get drawn down. 

Sandstrom noted that the board has decided to take a conservative approach. “We don’t want to pull more than 30% and we don’t want to go below that $1 million reserve threshold,” he said.