John Norton, Gunnison County’s tourism czar, was talking to his board last April. The ski resort had closed abruptly. Lodging and restaurants were closed. Visitors were being told to leave. The pandemic was triggering a panic in tourist-based economies across the country.
A board member asked how much the Gunnison River Valley tourism community could expect to lose. Norton guessed: down 25%, maybe even 50% for the year.
“A couple board members told me I was being overly optimistic,” said Norton, the director of the valley’s Tourism and Prosperity Partnership. “I just didn’t know. Nobody could know. The last pandemic was a century ago, right? But to end up where we did, that is something I never, ever would have predicted.”
In fact, lodging sales tax revenue from the Gunnison valley ended 2020 up 11.5% from the year before. In the town of Crested Butte, net taxable sales jumped 5.7% in 2020 to $119.9 million.
“We are all just shaking our heads over here,” Norton said.
The worst-case scenario never happened
The sky-is-falling scenario projected in the dark, early days of the pandemic never materialized in Colorado’s high country. A survey of sales tax reports filed by 20 resort communities shows combined spending in those places fell by only 3% in 2020 compared with the previous year.
Some communities — Copper Mountain, Keystone, Breckenridge, Vail and Aspen, for example — saw steeper declines, but not nearly as painful as projected last spring, when the threat of contagion appeared poised to decimate tourism businesses across the state.
And early reports show the 2020-21 ski season will end far outperforming projections, with visitors and residents spending like a regular ski season, despite capacity limits at ski resorts, restaurants and lodges, and a lack of public attendance at big-draw events and concerts.
It looked dire last spring. A terrible March tumbled into a dismal April, with spending in the 20 high country communities down 39%. While it was impossible to tell then, those months marked the nadir of 2020, and just about every community across the mountains started climbing out of that hole by early summer.
There are a lot of reasons why mountain economies didn’t collapse last year. Federal stimulus dollars bolstered bank accounts. Online shopping funneled more sales taxes into small-town coffers. Restaurants expanded into streets. City leaders dug deep to help. More people were eating and nesting at home, so grocers and essential retailers enjoyed big upticks in business.
Second-home owners settled in resort communities for the winter, fleeing their city homes. Short-term rentals were wildly popular with vacationers, supporting the flow of lodging taxes.
And in general, Front Rangers flocked to Colorado’s mountain towns in the past year, enjoying the outdoors and space to roam. Those staycationers helped offset what would normally have been a crippling decline in destination and international visitors, who stay longer and spend big.
Glenwood Springs handed out $100 certificates to overnight, midweek visitors redeemable at all sorts of businesses around the city. The Glenwood Gold Community Currency program fueled a strong rebound, not just from the pandemic-related closures but from the lingering impacts of the wildfire on the city’s doorstep.
After a 91% drop in lodging tax revenue in April, the community currency plan helped Glenwood Springs finish 2020 only 4% behind 2019 — which is even more impressive considering the tourist-reliant city was inaccessible for two critical weeks in July when Interstate 70 closed in Glenwood Canyon during the Grizzly Creek fire.
“When your economy relies on tourism and things are closed and there isn’t anything happening, it is really a slippery slope for businesses worrying whether they will make it or not,” Visit Glenwood Springs Tourism Director Lisa Langer said, noting how the Glenwood Gold spending plan has been adopted in recent months by communities like Redmond, Washington.
Langer credits her community’s success last year not just to the certificates but also to city support, like grants to struggling businesses and providing portable heaters to restaurants with outdoor dining.
“We all came together and it worked,” Langer said. “Very few if any businesses failed. We even had restaurants purchased and opened during the pandemic. We have businesses expanding. Talk about resiliency.”
The analysis of 20 Western Slope tourist communities mirrors a larger survey of the state’s cities and towns by the Colorado Municipal League. The CML survey showed 60% of local governments ended 2020 “better than expected” when compared to the outlook last spring, with 24% saying they ended the year “much better” than expected. More than one-third of Colorado’s 271 municipalities have fully recovered from the fiscal impacts of the pandemic, according to the “State of our Cities and Towns” report.
But sales tax is only “part of the picture,” Colorado Municipal League director Kevin Bommer said. Lodging tax — which makes up a big chunk of total sales tax revenues in resort towns — collapsed last spring. And the grim outlook in April pushed many local governments to furlough workers and delay or even cancel infrastructure projects.
“Those decisions created a ripple effect, like tossing a pebble in the pond. Those ripples extend out and will last for a while, even if the economy is turning around,” said Bommer, who hopes the federal stimulus will buoy local projects and planning. “The knowledge that it wasn’t as bad as was first anticipated should help boost confidence that full recovery will come sooner than expected.”
Eric Roemer closed his Wooden Nickel restaurant on Crested Butte’s Elk Avenue in March last year and didn’t reopen until the end of June. He reduced seating at the restaurant he has owned for 40 years and still, July through December was better than 2019. Vacationers came during the week, they stayed in town longer and they adjusted their meal times to accommodate limited capacity and required reservations. So Roemer wasn’t just slammed on weekend evenings, but had a steady stream of traffic all week long.
He ended 2020 down 15% from the previous year, which surprised him since the Wooden Nickel was closed for three months. The fall was especially busy, with sales up 24% to 42% a month.
“Overall, I think we saw a lot of Front Range traffic and we really filled in during the slow times,” said Roemer, who sold his restaurant this spring and celebrated his final night of ownership at the Wooden Nickel on Saturday. “I can’t really put my finger on it, but we saw a lot of in-state business and a lot of customers seemed to be staying in town for a long time.”
Dining in the street
In Durango, the community’s businesses reignited the Southwest Colorado Disaster Assistance and Economic Recovery plan that helped the Four Corners region recover from the 2015 Gold King Mine blow-out and the 2018 416 Fire.
Leaders from Durango’s business improvement district joined local government in a multi-faceted response to the pandemic. They bumped dining into the street, with Durango’s own Modstreet supplying customized “parklets,” like miniature outdoor dining patios.
“That literally saved so many of our restaurants,” said Jack Llewellyn, the 14-year executive director of the Durango Chamber of Commerce.
Durango wrapped 2020 with 6% more taxable sales than 2019.
Llewellyn said almost all the visitors last year drove to town. “If they were within a 12-hour drive, people just flocked here,” Llewellyn said, adding that Durango’s summer and fall 80% occupancy rate in area lodging was among the highest in the state.
Like Glenwood Springs, Durango businesses also joined together to offer gift cards good at local businesses and ramped up the community’s “Local First” campaign to get residents shopping in La Plata County.
Despite the rebound last fall and winter, some communities endured painful business declines, especially places where economies lean heavily toward skiing and tourism.
Aspen, with one of the most robust tourist economies in the West, withered under COVID. Pitkin County in December required overnight visitors to test negative for COVID-19 before arrival and adjusted that so-called “travel affidavit” in late February. Aspen finished 2020 with taxable spending down 9%.
Pitkin County slipped into Level-Red shut-downs after the holidays, which slowed business in January as restaurants closed for indoor dining. Today, Pitkin County is the only county in the state still at Level-Orange restrictions but there are 76 businesses certified under the 5-Star Program that keeps doors open despite sudden shifts in COVID-19 case numbers.
The transition from required testing to recommendations and education on responsible travel into Aspen has fueled a big rebound, said Debbie Braun, the executive director of the Aspen Chamber.
“March roared back,” Braun said. “We are planning a traditional marketing buy for summer and we are working with the county and city as well as our task forces to figure out how we can support business. The restrictions did hurt our business, but the virus is hurting business more.”