Aspen biz leaders can’t mask enthusiasm over upcoming summer
But lack of housing and employee shortage temper their outlook
Aspen businesses are approaching the summer tourism season with high expectations, low employee counts, and ample challenges spawned by the dogged yet waning coronavirus pandemic.
Panelists at the Aspen Chamber Resort Association’s inaugural Business Outlook Forum, held Tuesday on the Zoom platform, covered more than a year’s worth of industry data and trends — along with forecasts for a summer where visitors will be mostly freed from the shackles of previous public health orders.
“I think it’s a nice change of pace to begin to shift our focus from this crisis mindset to recovery,” Aspen Chamber Resort Association President and CEO Debbie Braun said during her opening remarks to the forum. “However, we’re facing some formidable challenges. The pandemic has decimated our workforce, and finding qualified employees is going to take all of our effort.”
Aspen and its surrounding areas were not immune to the pandemic’s impacts felt in communities and cities throughout the country and around the world in 2020 and into 2021.
While Aspen Valley Hospital didn’t max out its beds when the virus peaked locally, and Pitkin County’s mortality count has been relatively low with four COVID-19-related fatalities, there were still business shutdowns and operational restrictions, layoffs, wage cuts, reduced airline service and major event and festival cancellations, for instance.
At the same time, Aspen became a hot spot for long-term visitors who booked stays of three and four months or longer; others moved here permanently as part of the so-called urban exodus, bringing free-market residential inventory to historic lows in Aspen and Pitkin County.
As well, with more residential inventory being rented out for longer terms at higher prices, the scarce supply of housing for the local labor force keeps getting smaller.
“It’s going to be difficult,” Braun said. “Where are we going to house these employees when our traditional short-term rentals are being filled up with Airbnb and new seasonal residents?”
Short-term rentals had taxable sales of $9.6 million in March, which accounted for nearly one-third of the Aspen market share in accommodations, according to a recent city tax consumption report.
The City Council on Oct. 13 passed legislation requiring $150 business licenses and vacation-rental permits for property owners who rent their homes or condos on a short-term basis. Part of the council’s reason for the creating the requirement was to provide more fair competition with traditional lodges that pay higher property taxes because they have commercial designation.
Now with short-term rental tax data at their fingertips, city officials also can get a better idea of how residential properties being used for vacationers and long-term renters are impacting the accommodations market.
“That’s something we’re going to have to pay close attention to, to understand how that affects the overall experience in Aspen, and making sure that those visitors are safe, as well as we’re securing the typical expectations of what an Aspen neighborhood should be by providing year-round residency along with the short-term rentals in our neighborhoods,” said panelist Sara Ott, Aspen’s city manager.
Another panelist, this one in the real estate portion of the forum, noted guests currently are booking shorter visits than they were last year on average. The demand for rentals remains high, but people are approaching their visits more like vacations than long-term stays, said Andrew Ernemann of Aspen Snowmass Sotheby’s International Realty.
“You can really see going back last year, pre-September, the average rental duration of about 90 days indicated longer-than-usual rental bookings,” he said. “And more recently, that average has dropped down to under 70 days, and that’s indicative of fewer one-year rentals, fewer longer term, three- or four-month rentals. Last year we saw a lot of people coming to our town, coming into Aspen for longer stays, and now we’re seeing some of those shorter, more vacation-style rentals start to take over.”
While local leaders are following the changing lodging trends closely, they’re also keeping tabs on workplace trends and how they are hitting home.
The chamber has been hearing from numerous businesses about their hiring challenges, an ongoing issue the pandemic has exacerbated because of people leaving the workforce entirely and women easing back from their professional careers to help with caregiving and remote learning, noted Sarah Reynolds Lasser, ACRA’s senior director of business development who also oversees membership initiatives and group sales.
“All of these macro trends have impacts on our local Aspen economy and available workforce,“ Lasser said. “Many of these workers have left the workforce altogether, and therefore are not reflective of the unemployment numbers.“
Pitkin County’s unemployment rate was around 6% in January, February and March, after peaking at 24% in April 2020, according to state labor department statistics. The single-figure percentages made for shallow pool of available workers, she said.
“There’s less and less of an available workforce to fill your positions,” Lasser said.
Aspen’s retail economy generated $766.2 million in taxable sales in 2020, down 6.9% from 2019. The lodging and restaurant industries were the hardest hit, with revenue respectively down 21.1% and 11.6%, according to city tax reports.
Lodging tax collections amounted to $3.02 million for the city in 2020, a 25% drop-off from 2019, Ott said, noting that Aspen’s summer business last year benefited by bleeding into the fall.
“When you look at that number, it’s a direct reflection of the public health orders that we experienced in first and second quarter (of 2020) that reduced occupancies to essential workers,” she said. “I do think that the extension of the summer season into the fall was a fantastic change for our community in getting visitors up into the mountains. That helped rebound that number. But I’m really looking forward to a better turnout here in 2021.”
The city also is working with ACRA, the local nonprofit community, educational partners, Pitkin County and other governmental agencies in the Roaring Fork Valley to create a Regional Recovery Roadmap with a focus on affordable housing, tourism and workforce development. Ott called those “three key needs we will need from here to Glenwood to recover from Covid.”
The city will appear different from 2020 in some ways this summer, and alike in other ways, Ott said. The Saturday Market will return starting June 12 after a hiatus last year, while expanded outdoor dining will continue.
“You’ll continue to see parking spaces used for outdoor dining,” she said. “You’ll see them setting up around town this time of the year in preparation for those guests here in June.”
Ott said city officials are planning a post-summer community conversation about the future of expanded dining and other temporary uses downtown.
“Does that continue and if so, what shape does it take and what’s a reasonable arrangement that’s a benefit for both these private businesses and the community as a whole?” she said.
Expect to see fewer people wearing masks and more restaurant tables available this summer due to many restrictions being replaced with recommendations, and also because “vaccines have provided excellent protection against COVID-19,” said Raleigh Bacharach, the county’s interim COVID-10 program administrator.
As of late last week, about 61% of Pitkin County residents were fully vaccinated and 71% had been dosed once, she said, noting the county will no longer be on the state’s COVID-19 dial starting Friday. That’s also when the county’s newest public health order takes hold; it’s available at https://covid19.pitkincounty.com/public-health-order.
“With the rescission of the Tenth Amended Public Health Order, but the pandemic ongoing, it remains critical to work as a community to reach herd immunity through vaccination, and for individuals and businesses to remain vigilant regarding the transmission of COVID-19,” said the new order. “As we transition the community out of the COVID-19 crisis mode, Pitkin County will relax the majority of existing public health requirements while continuing to monitor data and prevent surges of the disease. To continue to combat COVID-19 in Pitkin County, limited requirements to mitigate disease spread remain appropriate.”
Aspen Skiing Co. CEO Mike Kaplan praised the community for how it responded to the challenges that came with the pandemic. He said momentum is building for a strong outlook and group business is coming back next ski season.
“On a positive front, this total shutdown of group travel and events and socializing, it is rebounding and will be back next winter,” he said.
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