What does the increased tension between Vail and ski towns mean for real estate?

 

Vail, the owner of major ski resorts and the epic pass, is selling approximately 86% more passes than in 2019.  At the same time mountain towns throughout Colorado and the country are feeling overwhelmed by the huge increase in visitation.  One recent lawsuit could radically change the ski industry.  What does this mean for real estate?

 

What was in the data on Epic pass sales

Vail Resorts CEO Kirstin Lynch said the total number of pass sales increased 4% and, due to the company’s decision to raise its pre-sale pass prices, total sales revenue increased by 11% for the Broomfield-based company.

While specific numbers weren’t given for 2023-24, the 4% increase likely brings Vail Resorts’ total number of pre-purchased passes to about 2.4 million. Last year Vail Resorts announced it had sold 2.3 million passes. Those 2022 numbers represented a 6% increase over 2021, and an 86% increase over 2019 numbers.  Note we do not know what the numbers loo like for Altera, the owner of the Ikon pass, as they are not publicly traded.

Colorado ski communities feeling impacts of increased volume

The crowds jamming the state’s busiest ski resorts the past few seasons have felt overwhelming, amplified by internet photos of long lift lines and communities overflowing with cars.

But is it too crowded? Hard to say. Resorts don’t share visitor numbers. And ski area operators never share the math that helps them plan for capacity.

Communities from Breckenridge, Vail, Park City, etc.. are reeling from increased tourism, the pic above is from a survey sent out to residents of the town of Vail.

At the same time visitation soaring two major lawsuits in ski towns

There are two recent lawsuits by mountain towns against Vail.  The first lawsuit is town of Vail vs town of Vail and the second more damaging lawsuit is Park City vs. Vail.

1. Vail loses lawsuit against the city of vail

   1. On Friday, June 30, Eagle County District Court Chief Judge Paul Dunkelman issued an order, ruling in favor of the town of Vail in the immediate possession hearing against Vail Resorts.
   2. The judge’s order grants the town’s motion for immediate possession, determining that the town had the authority to condemn the East Vail site, that the town is taking the site for a public use and purpose and that there is a necessity for the town to acquire the property.
   3. The Judge was not happy about the case and wrote: “the Town and Vail Resorts have been unable to work together to jointly focus on addressing these needs and meeting these obligations, at least as to the Subject Property. Instead of meeting their responsibilities and addressing workforce housing and protection of wildlife habitat in a responsible fashion, the Town and Vail Resorts have chosen to defer this decision to the Court. While this is their right, it is also a failure on the part of the Town and Vail Resorts.”

 

2. Park City vs Vail and comfortable carrying capacity

   1. A recent court decision in Utah could have big implications for the ongoing conflicts between ski resorts and mountain towns. Judge Richard Mrazik of Utah’s Third Judicial District recently ruled against Vail Resorts, who owns Park City Mountain Resort and ruled Utah could scrutinize the formula Park City uses to gauge its ideal capacity.
   2. The ruling came out of Vail Resort’s appeal of the Park City Planning Commission’s 2022 decision to block the upgrade three chairlifts at the ski area. The planning commission’s decision came on the heel of opposition by Park City residents who argued that it would lead to overcrowding. According to Park City resident Angela Moschetta.
   3. As increasing tourist numbers, rising housing costs and a shortage of workers continue to pressure mountain communities across the West, the disclosure of CCC formulas could offer communities a more thorough understanding of how to better manage traffic, Moschetta said.

 

What does the conflict with Vail mean for Colorado ski town real estate

1. More balance between tourism and residents: We are already seeing this with the implementation of short term rental regulations to try to balance the amount of visitors.  Look for these proposals to continue to accelerate in the coming years and some property owners will likely get caught in the cross hairs by not be able to rent a property that they intended to.
2. Higher taxes/prices: Cities will also use higher taxes to help balance residents concerns.  Almost every ski town has or is in the process of increasing taxes on tourism from lift taxes to nightly rental taxes, etc…  The taxation side is likely just getting started as I see more communities opting for a lift tax or other tax to offset the growing cities expenses for affordable housing and other services.
3. If Park City prevails: There will be increased scrutiny on capacity with cities like Vail and Park City pushing back against increased capacity. I could see  various mountain towns implementing regulations on capacity which could drastically alter the ski resort models.
4. Real estate Values: I don’t foresee values moving too much as there is still such limited inventory in each mountain town.  We could actually see values increase in some towns as the guest experience is increased making it more desirable.  A good example is Aspen,  Aspen has drastically worked to reduce tourism as values have soared..

Summary

The lawsuit in Park City could radically alter the ski model of the two largest companies as cities across the US will demand a reduction in capacity.  This essentially will make the unlimited passes very difficult to sell in for example Park City if the council makes a rule that capacity should be substantially reduced.  The only options would be to raise the prices to drive less sales volume.  This will be interesting to watch especially in towns like Park City and Breckenridge that are built on the assumption of huge volumes of tourists.

Regardless of the outcome on the Park City lawsuit, Ski towns in Colorado and throughout the country are already taking matters into their own hands with limitations on rentals along with higher taxes.  The wild card is if Vail loses the capacity suit and Park City and others put enormous restrictions on the number of visitors this will impact rentals and the businesses that rely on them. Fortunately, I don’t foresee a huge impact on real estate prices as there is still limited inventory due to expensive building costs along with lack of buildable land.

 

 

Additional Reading/Resources:

 

1. https://www.summitdaily.com/news/epic-pass-sales-continue-to-climb-for-vail-resorts/
2. https://coloradosun.com/2023/11/22/park-city-resort-capacity-court-ruling/
3. https://crestedbuttenews.com/2022/01/dealing-with-the-start-of-a-quiet-revolution/
4. https://ehq-production-us-california.s3.us-west-1.amazonaws.com/5b50d11ffa0238dbf8d8490657daae55a0c92eb9/original/1662740947/9c43c9cec4b8d49643933d092c30e9b2_Appendix_A_-_Vail_Resident_Survey.pdf?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=AKIA4KKNQAKICO37GBEP%2F20231225%2Fus-west-1%2Fs3%2Faws4_request&X-Amz-Date=20231225T163800Z&X-Amz-Expires=300&X-Amz-SignedHeaders=host&X-Amz-Signature=f5bea69438f3e03520e61a175e5a37aac78c7561849e9ab43c98a0a7b157e2ea

 

 

We are a Colorado Private/ Hard Money Lender funding in cash!

If you were forwarded this message, please subscribe to our newsletter

I need your help!  Do not worry, I’m not asking you to wire money to your long-lost cousin that is going to give you a million dollars if you just send them your bank account!  I do need your help though, please like and share our articles on linked in, twitter, facebook, and other social media and forward to your friends/associates   I would greatly appreciate it.

 

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.

Fairview is the recognized leader in Colorado Hard Money and Colorado private lending focusing on residential investment properties and commercial properties  both in Denver and throughout the state. We are the Colorado experts having closed thousands of loans throughout the Front range, Western slope, resort communities, and everywhere in between.  We also live, work, and play in the mountains throughout Colorado and understand the intricacies of each market.

When you call you will speak directly to the decision makers and get an honest answer quickly.  We are recognized in the industry as the leader in Colorado hard money lending with no upfront fees or any other games. Learn more about Hard Money Lending through our free Hard Money Guide.  To get started on a loan all we need is our simple one page application (no upfront fees or other games)

 

Tags: Denver hard money, Denver Colorado hard money lender, Colorado hard money, Colorado private lender, Denver private lender, Colorado ski lender, Colorado real estate trends, Colorado real estate prices, Private real estate loans, Hard money loans, Private real estate mortgage, Hard money mortgage lender, Hard money mortgage lender, residential hard money loans, commercial hard money loans, private mortgage lender Hard Money Lender, Private lender