Marketing the ‘Boat | SteamboatToday.com
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Marketing the ‘Boat

Michael Schrantz
Balloons fill the sky during the Steamboat Springs Chamber Resort Association’s annual Hot Air Balloon Rodeo in 2008.
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Balloons fill the sky during the Steamboat Springs Chamber Resort Association’s annual Hot Air Balloon Rodeo in 2008.

Among Colorado’s mountain resorts, the competition is fierce to become year-round destinations rather than strictly ski towns.

Zip lines soon will crisscross the Vail Valley. Beaver Creek is challenging tourists with the Tough Mudder. Biking has become an arms race, with resorts — including Winter Park, Keystone, Crested Butte and Aspen — building miles of new lift-accessed trails. Telluride has a summer calendar with food, wine and jazz events alongside its longstanding bluegrass and balloon festivals. Steamboat Springs also is in the hunt for its share of summer visitors with plenty of mountain and road biking options, new gravity bike trails at Steamboat Ski Area, a public golf course and our own slew of food, wine, beer and art events.

The effect of the pivot toward Being a year-round destination can be seen in increased sales tax revenue during the summer.

Overall, many resort towns still are below their pre-recession revenue totals. But while winter sales tax collections have been slow to recover across the board, some mountain resorts are meeting and exceeding previous records for the summer.

Steamboat’s summer sales tax collections have been growing for the past few years but still fall short of the highs seen in 2007 and 2008.

In the competition to capture summer tourists, resort communities are throwing large amounts of money toward marketing themselves and their amenities.

Much of that marketing money in other mountain resort communities comes from lodging taxes. Steamboat has chosen to direct its lodging tax, which has generated more than $14.5 million since its adoption in 1988, toward building amenities rather than marketing.

The first Strings Music Festival concert tent, the original Tennis Center at Steamboat Springs bubble and Haymaker Golf Course and clubhouse are amenities that were built by the 1 percent lodging tax.

In 2013, the city of Steamboat Springs designated $600,000 for summer marketing through the Steamboat Springs Chamber Resort Association. By comparison, the Vail Local Marketing District spends about $2.5 million on summer marketing.

Ski Town USA would like to become Bike Town USA to summer visitors from across Colorado and beyond, but it faces an uphill battle against the large marketing war chests of other mountain resort communities.

Summers coming of age

Mountain town summers have come of age in the past few years. Some of the biggest attractions have turned out to be activities like mountain biking that locals started pioneering years ago but only recently infiltrated vacation wish lists.

Ralf Garrison, director of DestiMetrics, a research firm for destination resorts, said that the mountain biking industry has been around for about 30 years, but its conversion into a destination magnet for mountain resorts has only taken place in the past 10 years. “It’s only the last three or four years that it stands on its own as a pillar of summer.”

Road biking has an even shorter history as a tourism driver, according to Garrison, of about five years.

Also contributing to the growth of summer mountain activities are recent changes in the rules that govern what’s allowed on U.S. Forest Service land. In 2011, legislation was passed that made it easier for ski areas on Forest Service land to host year-round activities. The legislation explicitly allows attractions such as zip lines, ropes courses, mountain bike trails and disc golf courses.

Special events have seen an ever increasing amount of emphasis, and weeks that once were dead in mountain towns now are filled with festivals, celebrations and holiday blowouts. The Steamboat Chamber hosts the Rocky Mountain Mustang Roundup, the Hot Air Balloon Rodeo, the Steamboat Wine Festival and the Steamboat All Arts Festival in addition to the numerous running and biking races and events during the summer.

As the summer attractions gain momentum, lodging occupancy and sales tax revenue have followed an upward trend for Western mountain resorts.

Lodging properties in the 17 Western resorts that DestiMetrics tracks saw a 6 percent increase in occupancy for the past six months compared with the same period in 2012, according to a news release.

DestiMetrics does not have enough lodging partners in Steamboat to include it in reports.

“The robust number of overnight visitors led to the record-breaking summer occupancy that surpassed pre-recession figures,” the release states.

In Vail, Aspen and Breckenridge, the only declines in monthly sales tax figures in recent years have occurred during the winter or offseason, according to The Aspen Times.

All three resorts saw June sales tax figures increase during the past two years, with some year-over-year jumps nearing 20 percent.

It’s difficult to compare total summer marketing dollar amounts between resorts because of different budgeting practices, but the Steamboat Chamber compiled information on other mountain resorts for the Steamboat Springs City Council in August 2012.

The $600,000 allocated by the city of Steamboat Springs was comparable to $510,000 spent by Durango and $650,000 by Glenwood Springs in 2012.

Vail will contribute $5 million toward brand awareness and year-round business in 2013, according to The Aspen Times.

The lodging taxes passed in 2010 by Aspen, Breckenridge and Teton County, Wyo., have allowed those communities to spend millions on marketing.

Steamboat Springs voters will decide in November whether to commit revenue from the city’s 1 percent lodging tax to two projects for 10 years.

The Referendum 2A ballot language also would allow for as much as $30,000 to be spent marketing the proposed biking trail system and downtown promenade along the Yampa River.

There was no explicit provision for marketing when the tax was committed to the Tennis Center or Haymaker, which does finance some marketing outside Steamboat from its budget. Both were billed as tourism motivators, or reasons for destination travelers to choose Steamboat over other destinations, but instead, they’re overwhelmingly used by residents.

Destination guests spend 12 times as much as overnight guests, according to Garrison and DestiMetrics.

“They have to be attracted to your community by some bright, shiny object,” Garrison said. “We think about these bright, shiny objects as destination magnets.

“The key to a destination magnet is it has to be presented to a guest far away.”

But Steamboat’s comparatively limited budget means it can reach fewer guests than its competitors.

“The challenge then is to make sure what we’re building is enough by itself to get people off their couches,” said Kenny Reisman, a Steamboat City Council member who served on the recent lodging tax committee.

Without the marketing dollars of a destination like Vail, Reisman said, Steamboat has to leverage its natural assets to build something special.

Steamboat is doing that with the trails system and Yampa Street promenade, he said.

“It won’t happen if we rely on marketing something average.”

Larry Mashaw, vice president of sales and marketing for Resort Group and a member of the lodging tax committee, said anything that gets built is going to need marketing and that he was glad to see some funds in the measure earmarked to promote the biking and promenade projects.

“Both of the projects that are being supported here will have pretty clear benefit to tourists if they’re marketed properly,” he said.

“If we are putting all this taxpayer money (into the projects), we have to make certain we take this next step and people know about it,” Reisman said.

Steamboat’s goals

Since its 2012 presentation to City Council, the Steamboat Chamber has checked off some of its goals for summer tourism.

Summer sales tax collections through August are up 6 percent compared with the same period in 2012, more than the 3 percent minimum targeted, and Saturday lodging occupancy has seen an increase of 13.5 percent, outpacing the 5 percent goal.

The third main goal for the Chamber was an improvement in Steamboat’s net promoters score, which measures through a survey how likely a visitor is to recommend Steamboat to friends and family. Those results still are being analyzed and compiled by a consultant.

“We do a really great job with the resources that we have,” Chamber CEO Tom Kern said.

The amount of support from the city for summer marketing is roughly based upon a 3.3 percent vendor fee related to the collection of sales taxes that businesses were asked to voluntarily contribute to the Chamber before Steamboat collected its own taxes. Once Steamboat became a self-governing home rule city and started collecting sales and use taxes, it did away with the vendor fee and started allocating a similar amount of money to the Chamber instead of remitting the fee to the vendors.

What the city currently budgets for the Chamber is more than what would be allocated based on the 3.3 percent fee.

In addition, the Chamber now has $25,000 to represent Steamboat at trade shows and another $100,000 proposed in the 2014 budget for special event development.

“The last few years, we’ve given what we can afford,” City Manager Deb Hinsvark said. “Summer marketing really benefits the community.”

“I don’t see this as they’re not providing enough revenue or resources,” Kern said about the city’s commitment.

“In boom times, city involvement has been even greater,” he said. “It’s an ongoing issue of what’s the appropriate level (of funding)? What’s the appropriate funding source?”

Kern said he doesn’t think Steamboat is losing any ground compared to other mountain resort communities.

Amenities like the trail system on the November ballot can help Steamboat lay claim to the Bike Town USA moniker, he said.

But with millions being poured into new physical amenities, the existing marketing resources might not be enough to effectively promote Steamboat’s assets.

Reigniting the conversation

The Steamboat Springs Lodging Association is worried that the community appears to be underfunding summer marketing, according to Mashaw, chairman of the association.

“We’re not well-equipped to fight the battle to get our share of customers,” he said. “There’s not necessarily any really easy answers.”

Mashaw said once the November vote is decided, the conversation about how summer marketing is funded will be reignited.

“The first conversation is can we reach consensus that marketing” is under funded, he said.

Then, the community has to agree that increasing resources for summer marketing is a priority, Kern said.

“When we get to the ‘how’ … there doesn’t appear to be a ‘how’ that doesn’t require someone to put more resources on the table,” he said.

“We have to get all of the stakeholders involved rather than place it on the back of one group,” Mashaw said about the tendency to look at the lodging tax as the only revenue source.

Some marketing already is done by accommodation providers to get guests to travel to Steamboat, Mashaw said, and the lodging sector has had to discount prices to continue to attract visitors following the recession.

Visitors staying in the Local Marketing District pay 11.65 percent in sales and lodging taxes. And the majority of lodging properties charge a resort fee that varies from 3 to 7 percent, Kern said.

“What is the tipping point there?” he said, referring to the potential for lodging to be taxed at nearly 20 percent at some properties.

The potential increase in summer tourism traffic from effective marketing would affect more than just lodging, Mashaw said, as dining, entertainment and activity providers also would be poised to see a boost in business.

“We’re doing our job and doing the best we can with the resources provided to us,” Kern said about the Chamber’s efforts. “Can we move the needle more if we had more resources? I think I can say emphatically ‘yes.’”


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