EARLY RESERVATION OUTLOOK
The early reservation numbers and outlook confirm what we had anticipated for months – it is going to be a tough rental season. Advance reservation numbers are way down as compared to the same time last year. Depending on who you talk with, that figure is down 30-50%. In the end we believe that occupancy numbers will improve, however, people are just waiting as late as possible to make firm plans and commit. And thanks to all the guidance of cable travel networks and newspaper travel sections, everyone who is calling in advance is bargaining like they are buying a blanket on the beach in Mexico.
Vail Realty has been researching availability throughout the valley and checking the rates of the competition on an ongoing basis. As such, we have taken a proactive approach to be ahead of the curve in offering guests incentives to book now as opposed to waiting until the last minute. Our position is that “lower rates” are better then “no rates” and that as occupancy improves we will then adjust our rates accordingly. Our objective is to avoid the last minute panic that many of our competitors will be sure to be facing. While we believe that it will be a tough season, we think a proactive aggressive approach in booking guests will pay off. At the end of the day, the key to this ski season remains the same as every other year – good snow. If it snows….they will come.
FARMER’S ALMANAC - WINTER OUTLOOK
Every year about this time, the most frequent question we get asked by out-of-area property owners and frequent visitors alike is “What kind of ski season do you think it will be?” That question always amuses us as if we really might have some meaningful insight into the weather. However, it is always fun to take a look at the Farmer’s Almanac. This year’s forecast is not offering anything very dramatic. The month-by-month predictions do not offer any big insights as between November and April, the forecast for temperatures and precipitation are either normal or slightly above or slightly below normal. The big question is “what is normal”? In the last 10 years the patterns have been anything but “normal”. In the past, March was always the big snow month and January was typically bitter cold with less snow, but in reality, March snowfall has become spotty and January has been the best month to ski with great snow and moderate temperatures.
It is unclear to us how the various Farmer’s Almanacs derive their forecasts. Ocean temperatures? Sunspot activity? Waterfowl migrations? Ouija Board? However, we frankly think it is all hogwash. Global warming, El Niño, La Niña, etc. – forget them all. For years in this Newsletter, we have been maintained that the only weather pattern that we have seen in our 30+ years in the Rockies is the 7-year snow cycle – seven years of good snow and then seven years of lesser snow. The good news is that we would appear to be in the middle of a “good snow” cycle. With the economy the way it is, heaven knows we could use good snow!
VAIL RESORTS SUING EAST/WEST PARTNERS
Some say that a bad economy usually results in a higher divorce rate as financial issues tend to escalate. The same may be true for business marriages. For years, Vail Resorts and East/West Partners have been bedfellows involved in real estate development deals; Slifer, Smith & Frampton Real Estate joint venture; East/West Managing Partner, Harry Frampton, was once president of Vail Associates (the predecessor company to Vail Resorts); and so on. However, all is not well in Camelot these days as Vail Resorts has filed an action against East/West Partners stemming from Vail Resorts purchase of Colorado Mountain Express from East/West last year. In addition, Vail Resorts Development Company recently fired Slifer, Smith & Frampton Real Estate as broker for the Vail Ritz Carlton Residences.
LOCAL ELECTIONS
Four seats on the Vail Town Council were up for grabs with 8 candidates running. The Vail electorate demonstrated incredible sense as incumbent, Kevin Foley, was overwhelmingly re-elected and the top vote-getter. In our view, Foley has been in our view the most unbiased and sensible councilman ever in Vail. Also elected were Kerry Donovan who grew up in Vail; Ski Museum Curator, Susie Tjossem; and Kim Newbury - also an incumbent. What is shocking though is that there were only 1,001 votes cast in Vail’s election. Just 1,000 people get to determine the future of Vail. Vail has to change its voting laws to allow property owners who do not reside in Vail to have say in their government. Presently the political situation is Vail is “taxation without representation”. It seems to us that a war was fought and a nation was founded over this very issue sometime ago.
DENVER LEADING THE WAY
The world’s top producer of solar inverters, SMA Solar Technology AG, announced plans to locate its first manufacturing plant outside of Germany, in Denver. The economics of the decision to build new industry in the US, and Colorado in particular, are simple. The weakness of the US dollar and the large, well educated workforce here are just part of the equation. Even though our state has its own budgetary concerns, we have had the foresight to improve infrastructure beginning with the construction of Denver International Airport nearly 20 years ago, and coupling it with a substantially completed toll way system surrounding the city. Now, with newly operational sections of a light rail system in place, it will be years before other states are in a position to offer similar necessities to light industry and high tech companies.
It’s not hard to understand how the growth of the Front Range as home to new technological and green industry will affect the entire state, including the Vail Valley. While none of us expects an immediate recovery, either in Vail or Denver, international investment and domestic relocation can only bode well for a state that is years ahead of everyone in planning and positioning for sustainable expansion, while maintaining the quality of life that brought us here in the first place.
FREE OVERFLOW PARKING ON VAIL FRONTAGE ROAD TO CONTINUE
Free overflow parking on the Frontage Roads will continue this ski season when the parking garages fill up. We think this is a good decision as one thing is certain – we need to keep Vail as customer friendly as possible. Parking in town has always been an issue, but has escalated in recent years with the abundance of in-town construction projects and construction workers placing an added burden on demand. Even with the downturn in the Vail real estate market, three major projects continue construction with large crews as they move toward completion including the Vail Ritz Carlton, Four Seasons, and Solaris.
AVON OKAYS SHORT-TERM RENTALS
What in the past was unofficially tolerated is now “officially” allowed in Avon as the Town Council approved a measure to allow short-term rentals in the downtown area of Avon. For years, Avon homeowners and rental agencies were doing short-term rentals although it was not permitted by ordinance. Enforcement of this was overlooked for years until some residents started to raise objections about their neighbors. The Eagle-Vail subdivision also recently overturned a similar covenant that was loosely enforced. Some permanent homeowners claim that short-term rentals cause property values to decline, but many second-homeowners in both areas rely on short-term rental revenue to subsidize the cost of ownership. Although Vail Realty does not operate in either area, we think the flexibility to rent on a short-term basis makes these areas more desirable to entry-level second-homeowners and thus, enhances values overall.
OTHER NEWS HEADLINES:
Ski Runs Open on Golden Peak for Ski Race Training
Vail Realty’s Flag Football Team Win Back-to-Back Championships in Vail
Austrian Ski Legend Herman Maier Retiring from Ski Racing
Last Chance to Get your Epic Pass at www.EPICPASS.COM
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