Saturday, July 20, 2019
Sun Valley’s Task at Hand-Playing Catch Up
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People love Sun Valley once they’re here.
 
Friday, April 12, 2019
 

STORY AND PHOTO BY KAREN BOSSICK

Sun Valley skiers are likely the most spoiled on the planet giving their access to uncrowded slopes with great skiing. And this community does a better job of maintaining a quality lifestyle than any other.

But, while its mid-summer draw is enviable, it needs to beef up its winter numbers big time to keep up with other mountain ski resorts.

Ralf Garrison made the case for putting an additional million dollars towards marketing during an informational meeting organized by Sun Valley Economic Development Wednesday night at the Limelight Hotel.

The meeting—one of two—comes at a time when backroom discussions in the City of Ketchum, which provides $440,000 to Visit Sun Valley for marketing, are going on about cutting tourism marketing.

“This community needs to have a strong marketing program,” said Harry Griffith, who heads up SVED. “I’ve seen Visit Sun Valley Marketing Alliance get its legs over the last few years. We’re of the belief that marketing needs to be kept at the top of the roster.”

Garrison began analyzing the Sun Valley market two years ago as an analyst for DestiMetrics, which has followed 19 mountain ski resort communities for years. He sold the platform a year ago and is now a free agent.

Garrison said Sun Valley’s summer business from May to October is comparable to other communities, with the exception of May and September and October where others have added events to attract tourists.

It’s equal to or above from June until September with 45 percent occupancy rate across the summer compared to an industry rate of 48 percent. Its revenue per available room is $237 versus the industry’s $262. And summer visitation has grown--3.7 percent versus 2.1 percent industry wide.

Sun Valley’s tourism peaks over Fourth of July and Labor Day. It does well during the Trailing of the Sheep and Sun Valley Jazz and Music Festival, as well. But the last couple weeks of September could be improved.

There is super low demand in May but, said Garrison: “Season’s over. You’re going to do Mom, Mexico or Moab.”

The average vacationer in Colorado spends 3.7 days during summer and 5.2 during winter. Sun Valley’s summer vacationers spend 4.7 days.

Garrison told those crowded into the conference room that they didn’t want to advertise to get people here during peak summer days. It’ll just overcrowd the valley.

Instead, he said, throw your strike in the strike zone (between 38 percent and 88 percent occupancy)—where you can improve. There are all sorts of opportunities in September and October, he added.

Where more marketing definitely needs to be done is winter, focusing on late November through mid-April. It’ll pay dividends since winter visitors spend a third more than summer visitors.

Garrison put up figures from the Winter of 2017-18, which was a low snow year across the West. Sun Valley excelled in late November and early December when its snowmaking provided a better level of skiing than other resorts had. And it did well from April 11 to the end of the season when other resorts were closed.

But in between was abysmal, Garrison said. Sun Valley had a 34 percent occupancy rate versus 50 percent industry-wide. Its revenue per room was $226 versus $384, which Garrison called a bit insulting. Occupancy rates provided profitability for businesses that depend on tourism just 62 of 180 days.

“Is this good, bad? Let’s call it opportunity.”

In fact, he added, winter offers a big opportunity.

”You don’t have a single day in the winter that exceeds the strike zone.”

Garrison said the other target destinations he reviews, such as Mammoth, Telluride and Steamboat, have larger bed bases than Sun Valley. Still, Sun Valley generates less than $5 million on lodging in a fiscal year.

By contrast, Aspen/Snowmass generated $31 million. Jackson Hole, $28 million, Mammoth $20 million and Steamboat Springs, $10 million. Crested Butte, the next lowest to Sun Valley, generated $8.5 million

Sun Valley gets 54 of its revenue in summer and 46 percent in winter; Jackson, 32-68, Crested Butte, 45-55, Telluride 40-60, Mammoth 37-63, and Aspen-Snowmass 32-68.

It takes 30 percent occupancy to give retail enough to cover fixed costs and 40 percent to cover variable costs. Revenue begins to exceed expenses above 40 percent. Seventy percent is where they become a money machine and can begin to grow

“There’s no reason why us can’t be them, pushing from 30 percent or 40 percent to 70 percent, Garrison added.

Sun Valley has more second homeowners and retirees –something that’s both helpful and hindering. But it’s a mistake to write off either, Garrison said.

“Don’t rule out baby boomers—we have new body parts. We’re not going to fade away like our parents.”

When skiers have a great experience because of a bountiful snow like this year, they take that excitement into the next year, Garrison said.

“That’s snow equity.”

But Garrison cautioned those in the room not to take the Epic Pass, which Sun Valley will offer next season, for granted.  The pass can help you hold your own. Or, it can pose a threat because there are only a limited number of skiers it gives those skiers more choices of where to go.

If someone in the Epic family increases business 30 percent, someone else is down 30 percent, he said.

In fact, a year after Vail started the Epic Pass, it purchased Kirkwood to have enough resorts in the Tahoe area. Over the next two years, it generated more money from the Kirkwood skiers than it paid for the resort.

“They thought they bought a ski area. They bought a customer base,” Garrison said. “That changed the universe.”

There are 10 million candidates for the winter experience and 90 million for summer. Once you get them here, they want to come back, Garrison noted.

But you need to figure out what guests want and message against the competition. And that means special events. “Is it being done now? Yes, but not enough.”

One thing Telluride has done is target visitors, Garrison said. It sends brochures with a mountain biker on the cover to those who have professed an interest in mountain biking. It substitutes a fly fisherman on the cover for those who have indicated an interest in that activity.

Trish Wilson related how several extreme skiers in their 20s and 30s came here last winter for a wedding. They thought it was the coolest place and they want to come back, but they never would have come if it hadn’t been for the wedding.

“How are we not getting to that age group?” she asked. “We can’t get them all by accident. We need more winter weddings.”

Garrison said he would add another million in marketing to the $2.4 million Visit Sun Valley spent in 2017-18. And be sure and target the guests you want.

 “If you say the same things as anyone else and you’re 10 years behind, you aren’t getting anywhere. There’s an opportunity but you’ve got to buckle up. It’s gonna feel like a three-legged race.”

Griffith told the group that there are other ways of generating funding for marketing in addition to what  cities and LOT taxes contribute.

“If you’re a Ketchum resident, go to the budget discussion,” he pleaded. “Now is the time to think how we can do the smart thing and change our destiny.”

 

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