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Summer revenues looking strong in Telluride region, real estate…

Nice article from the Daily Planet on early numbers for the summer season. Real Estate, Telluride, Condo, Homes, Mountain Village, Dan Henschel.

Tourism may set record for 8th consecutive summer

STRs of more concern to Martelon than fires, drought

Did Colorado’s assorted wildfires hurt tourism in the region? Not as much as elsewhere in the West.

According to Michael Martelon, President and CEO of the Telluride Tourism Board, “Occupancy hasn’t yet been affected by fires too much, certainly nothing like Durango. Yet fires could still have an effect on summer’s tax revenue. We live in a beautiful, extreme place. If it gets too extreme, it could hurt.”

According to Martelon, “June occupancy of managed properties (hotels and lodges) was down by 3 percent from 2017, but July occupancy was tracking to be up 4 percent.” Additionally, Martelon explained, occupancy figures don’t always supply a complete picture of tourism in the region because they fail to account for gray market lodgings, e.g. short-term rentals by homeowners on AirBnB, VRBO and the like.

Gray market stays, however, are reported in sales tax revenues — and those numbers are coming in strong. “It appears as though June will be up double digits from 2017 in revenues for the destination (Telluride and Mountain Village combined), thanks to a strong gray-market performance in June, especially in Mountain Village,” Martelon said.

The regional wildfires that burned closest to Telluride after June 1 were mostly extinguished within 24 hours. The multi-day 416, Horse Park and Burro fires never came within 30 miles, though they certainly sent plenty of smoke into the box canyon. Capricious and impermanent, smoke is nothing to cancel a vacation over, and not many tourists did so, said Martelon.

If there was one day in particular that suffered in summer’s first half, it was July 4. While he has yet to receive tax revenue numbers, Martelon said, “July 4th this year may well show a lower population (or number of visitors in the destination) than last year. When you don’t have fireworks, you’re going to lose drive traffic. People opt for something else.”

Indeed, locals saw a flood of cars pour down Hwy. 145 immediately after the Fourth of July parade and picnic. At 5 p.m., the sidewalks of Main Street sat eerily empty beneath an ashy orange sky.

Martelon forecast a strong August and September for the Telluride/Mountain Village destination. As far as tax revenues go, he said, “We’re hoping to break our summer tourism record for the eighth consecutive year.”

Occupancy in managed properties set a summer record in 2015, and it won’t likely be challenged. “More people are moving to the gray market,” said Martelon. “There’s not necessarily less people coming; what matters is where they choose to stay.”

The opening of AirBnB and VRBO homes to tourists has made Telluride’s economic engine chug happily along, filling Main Street with more and more retail shoppers and restaurant patrons. Expensive hotels may not care for it, but the gray market has surely revitalized residential neighborhoods and illuminated the once-dark houses of second-home owners.

As such, Martelon disliked the Tuesday decision by Telluride Town Council to pursue putting a tax on short-term rentals (STRs) on the November ballot. “Gray market properties did not cause our affordable housing crisis,” he emphatically insisted. “Collectively, we didn’t have the foresight to plan for what people did with their real estate.”

Crunching the numbers of the proposed 5 percent excise tax on STRs, Martelon figured that — if passed —Telluride would penalize visitors significantly more than any other ski town.

“For a $10,000 reservation,” he said, “it would cost $635 more than Aspen, $785 more than Vail and $965 more than Jackson Hole. STRs account for 17 percent of our lodging, and, to me, the thought of penalizing them is short-sighted.”

Martelon dismissed comparisons to the short-term rental situations of Boulder and Crested Butte that were cited in the previous two Town Council meetings. “It’s not apples to apples,” he said. To suggest that landlords moving from long-term to short-term rentals “caused the affordable housing crisis is to truly live in a bubble and not understand that this is totally where the industry is going.

“What if New York City decided to tax Uber because it wasn’t Yellow Taxi? Uber and AirBnB are disrupters, and disrupters in the travel industry are not going away,” he said.

Telluride lodging is dominated by private residences, with condominiums comprising 57 percent and houses 22 percent. Hotels, which would not be subjected to a new affordable housing tax, make up 21 percent.

“Let’s not penalize one segment of Telluride’s economy,” Martelon said of the proposed STR tax. “I believe workforce housing is a common cost. Let’s work together to fix it. If we all share in (Telluride’s) victories, let’s all share in the pain.”