There is a condo complex in Steamboat Springs, CO where units have precipitously dropped in…
Currently in mountain towns throughout Colorado lodging taxes must be used for tourism marketing. This week Governor Polis just signed a monumental bill into law that allows towns to use only a small portion for lodging and the rest for other items. What does this mean for real estate values and sales throughout Colorado ski towns?
What was in the new Colorado tourism taxes marketing bill?
Gov. Jared Polis signed House Bill 1117, the bipartisan legislation allowing towns to utilize their lodging taxes differently, into law Thursday in Edwards. Since 2002, voters in 29 Colorado counties have approved a lodging tax for tourism marketing. The new legislation allows counties and local marketing districts to spend as much as 90% of lodging taxes previously collected for tourism on affordable housing, childcare for local workers and “enhancing visitors experiences,” which includes investment in recreational infrastructure such as trails.
Why the recent changes in marketing Colorado ski towns?
The storm has been brewing for a while. Local residents from Crested Butte to Steamboat have felt huge impact from the dearth of tourists the last several years with impacts on housing, the environment, childcare, etc… The bill allows voters to decide how to divide lodging tax revenue between tourism promotion, housing, childcare and recreational improvements, but it requires that at least 10% remain dedicated to tourism marketing.
“A visitor’s experience is also heavily influenced by the host community’s ability to support their residents and local workforce with housing and other essential services, as well as a strong quality of life that comes with our amazing natural and cultural assets,” the bill reads. “Robust support for our residents’ needs is essential to the long-term health of both our communities and our economy.”
This is a radical change that is a seismic shift away from just tourism marketing that now emphasizes the impacts on local communities.
Will the reduction in tourism marketing decrease the visitation in Colorado resort towns?
I’m doubtful that there will be any impact on visitation. Take a ski town like Steamboat. About 4 years ago Steamboat was bought by Alterra and joined the Ikon pass. Immediately after the number of flights into Steamboat has almost tripled bringing more visitors into town.
Every major ski resort in Colorado is on either the Ikon pass or the Epic pass. Both companies (Vail Resorts and Alterra) spend millions on advertising of their pass products and in turn the resorts they own/affiliate with are getting worldwide exposure.
Furthermore Colorado ski towns are at a different place than 10 years ago with huge brand awareness already so destination marketing is less needed. For example, I’ll bet that 95% of America knows about Aspen or Vail. In essence the impacts on a reduction in marketing will have limited if any impact on the amount of visitation to the various mountain towns.
How will HB 117 impact real estate prices
I don’t see any downward pressure on prices from this new legislation as there will be limited impact on tourism. Prices in ski towns are going to stay high based on limited inventory, high build prices, and continued demand. None of these factors look to change materially anytime soon and therefore prices will continue at their current levels.
HB 117 is a big step in the right direction to balance community needs with tourism marketing and will have big benefits for affordable housing, childcare, etc… This new bill will have little impact on tourism even with the loss of advertising dollars. As large stakeholders like Alterra and Vail continue their world wide pass products and in turn their advertising tourism will remain robust. I don’t see any huge impacts to visitation based on HB 117 and in turn no big changes to real estate.
- Colorado mountain towns can use tourism taxes for worker housing (coloradosun.com)
- Spring break crowds bring business success in March | SummitDaily.com
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Written by Glen Weinberg, Owner 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 Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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