What city in Colorado could be most impacted by the president’s plan to build a wall and the resulting international turmoil? My first guess like many of you would be somewhere in the metro area which is not the correct answer. In this city in Colorado Mexican buyers accounted for almost 50% of all international sales. How will this be impacted by the president’s policies?
Regardless of whether the wall is built or not many international travelers no longer feel welcome and are taking their tourist dollars elsewhere according to a recent analysis by the United States Travel Association. “Trump’s rhetoric and unpopularity abroad is likely to reduce international arrivals by 4.3 million this year, according to market strategy firm Tourism Economics LLC.” (see article)
What areas in Colorado would be impacted the most? My first guess was that Denver metro would be most impacted by a wall/talk of the wall due to the large Hispanic population and popular draw of the metro area. I was quite surprised that the city with the highest percentage of international sales to Mexican/Latin American nationals is Vail/Beaver Creek (see Denver post article). Although I haven’t seen formal statistics, Telluride is also highly desired by the Latin American community and will also be impacted considerably by the current policies. Furthermore according to a report in the Summit Daily news, the manager of the outlets in Silverthorne states: “shoppers from South America easily account for the majority of international business”.
What does this mean? Colorado is heavily dependent on tourism and particularly international travel as international travelers stay longer and spend substantially more money than domestic travelers. In 2015 tourism in the Colorado mountains accounted for a 4.8 billion dollar impact to the state (see study from Colorado Ski). International tourism is a big piece of the 4.8 billion dollar number. Talks of a wall (whether it happens or not, unfortunately perception of openness or lack thereof) will have outsize impacts in unexpected markets like Vail, Telluride, Summit county (Breckenridge, keystone, etc…). These impacts will be felt on the bottom lines of the ski companies like Vail resorts but also trickle through to the real estate market as well.
I saw yesterday in the Wall Street Journal (see full article) that the new administration is proposing extreme vetting for many travelers even with Visa waivers. As a result Canada’s tourism is increasing at the expense of US tourism (see full article) This will surely impact Colorado’s tourism economy. The million dollar question is how much impact this will have on real estate? Unfortunately, I’m not sure anyone can predict exactly how many international tourists will take their dollars elsewhere but there could be outsize impacts in many of the ski resorts throughout the Colorado high country.
- Bloomberg News: Lost decade for tourism: https://www.bloomberg.com/news/articles/2017-03-27/u-s-travel-industry-fears-a-lost-decade-under-trump
- Bloomberg News: Blackrock sees slower growth over trump agenda: https://www.bloomberg.com/news/articles/2017-04-06/blackrock-s-fink-sees-slower-growth-on-concern-over-trump-agenda
- Colorado Ski Country: Tourism impact on Colorado ski mountains: http://coloradoski.com/media_manager/mm_collections/view/183
- Summit Daily: Impact of international tourism on summit county: http://www.summitdaily.com/news/business/summit-county-breckenridge-ski-tourism-might-benefit-from-smarter-visa-laws/
- The Wall Street Journal: Extreme vetting, what does this mean for tourism: https://www.wsj.com/articles/trump-administration-considers-far-reaching-steps-for-extreme-vetting-1491303602
- News 1130: Canada benefits from US dysfunction http://www.news1130.com/2017/02/17/canada-stands-benefit-us-tourism-intention-declines/
Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in the Colorado Real Estate Journal, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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