Reports of big changes at base area resort raise many questions in Steamboat Springs
Steamboat Springs — One of the largest lodging properties in Steamboat Springs is reportedly planning for major changes that could have significant ripple effects at the base of the ski area and beyond.
The Sheraton Steamboat Resort has told some prospective guests in recent weeks that, at the end of the ski season, it is getting out of the business of hosting conferences.
Some business leaders are also hearing the 287-unit resort property is pursuing a plan to convert some or all of its remaining hotel rooms into point-based timeshares.
Together, the moves could put a big dent in the city’s ability to attract and host some large group conferences and potentially keep some sales tax dollars from flowing into base area redevelopment projects.
Other community members think the changes could have a positive economic impact. Some are speculating that the changes could lead to a higher occupancy rate at the base-area property and allow some other hotels to raise their rates in a market with less competition.
“There’s good news, and there is bad news out of this,” Steamboat Springs Chamber Resort Association CEO Jim Clark said Monday. “This isn’t a situation where a hotel is closing because it didn’t have any business, which is good news … The upside is people are going to be staying in those timeshares.
“On the bad news side, that is the largest meeting facility in town,” Clark continued. “The meetings that were occurring there and at the Grand, or just in the Sheraton, are going to go away.”
Clark said the changes also could move some wedding business to other properties.
With rumors and whispers of changes at the base area hotel spreading through the Yampa Valley, many community members and lodging leaders are starting to ponder what impact the Sheraton’s exit from the hotel and conference business might have.
The lack of publicly-released details on the plan is leaving these residents with more questions than answers.
“It could be a positive thing,” base area realtor David Baldinger Jr. said Monday.
Baldinger Jr. said if a conversion of hotel rooms to timeshares results in the Sheraton maintaining a higher occupancy rate throughout the year, the increased spending from those residents could make up for some or all of the losses in sales tax revenue and conference revenue.
He was interested in learning more about the scope of the Sheraton’s existing conference business and the plans for the timeshares.
As of last year, the Sheraton was comprised of 244 hotel units, 22 condominiums and 21 timeshares.
Baldinger Jr. noted more and more hotels in resort communities that have off-seasons around the country are converting their hotel rooms to timeshares to increase the occupancy rates.
The ownership of the Sheraton was recently transferred to Vistana, a new vacation timeshare company spun off from Starwood Hotels and Resorts Worldwide.
In addition to the Sheraton in Steamboat, Starwood also transferred ownership of a handful of other resorts in such places as Hawaii and Mexico to its new timeshare company.
Sheraton Steamboat Resort General Manager Dan Pirrallo said Friday he could not confirm what changes are being considered at the hotel until they are finalized and approved by the hotel’s new ownership.
The hotel’s owners are expected to consider approving the changes at a meeting later this month, Pirrallo said.
It wasn’t clear Monday how many jobs might be affected or eliminated by the changes.
Conference bookings halted
Routt County Commissioner Cari Hermacinski said Monday the Sheraton was an ideal spot to host a large June gathering of county officials at a successful Colorado Counties Inc. conference.
“Everyone loved it,” Hermacinski said. “People brought their mountain bikes. It was a great way to show off our portion of the state.”
Hermacinski said she was concerned when she heard the Sheraton told the conference organizers the meeting rooms would not be available next summer, or any summer after that, because the conference rooms were being converted into “member amenities.”
“There’s literally nowhere else in Routt County where we could host large conferences of this size,” Hermacinski said.
Clark said he has heard from some other hotels in Steamboat that have started to absorb some of the conferences that would have gone to the Sheraton.
But others, like Colorado Counties Inc., will have to take their guests and business elsewhere.
The Sheraton currently has 20,837 square feet of meeting room and ballroom space. The Steamboat Grand has 16,037.
Some conferences require the use of both properties.
Clark said in Steamboat, there is currently more potential in the market to attract more group events that don’t require meeting spaces, such as traveling car clubs.
Tax impact uncertain
Some residents have also called the city’s finance department to say they have heard the hotel is ending group sales and conferences and converting more hotel rooms into timeshares.
Like Hermacinski, the residents who made the calls were concerned about the potential impacts of the changes.
City of Steamboat Springs Finance Director Kim Weber said because the specifics of the Sheraton’s plans have not been revealed, it’s still an open question as to whether the city would be collecting any tax revenue from the timeshares.
That depends on how they are set up, Weber said.
But if the sales tax revenue the city collects from group sales and nighty hotel rentals is lost, she said the city’s coffers wouldn’t bear the brunt of the loss, at least for a while.
That’s because she anticipates the pinch will instead be felt by the base area urban renewal authority that has resumed collecting hundreds of thousands of dollars of incremental sales tax revenue at the base area.
Under the URA, any sales tax collected over the $3.18 million baseline set in 2004 goes to the URA’s coffers, not into the city’s general fund.
The city collected $3.74 million in sales tax revenue from the base area last year, meaning about $560,000 of increment went to the URA.
Weber is projecting that increment to increase to the neighborhood of $650,000 this year.
“I don’t worry about the URA being able to pay its debt, but it could impact the projects that are planned for the future,” Weber said.
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