City of Aspen cleans up in 2021; cautious heading into 2022
Retail sales, accommodations topped $1 billion in the city of Aspen last year
Last year was a good one for the city of Aspen’s sales tax collections, topping out at more than $24.5 million, which is record-breaking for the municipal government.
In 2021, there was robust activity across nearly every sector with more than $1 billion in transactions, Finance Director Pete Strecker reported to Aspen City Council during a budget update in Monday’s work session.
Last year’s sales tax collections were up 33% over 2020 and 24% over 2019.
“Most sectors really grew by double digits, some by astounding numbers,” Strecker said.
Accommodations accounted for $256,865,311, or 25% of total retail sales, and restaurant bars sold $154,955,362, or 15% of all transactions last year in the city.
The average daily rate for a lodge room also grew and was $509 a night, up from $419 in 2020 and $454 in 2019.
Occupancy was 56% in 2021, slightly lower than 2019 when it averaged out to 60%. During 2020, the pandemic slowed the accommodations sector down, and occupancy was only 43%.
“What really filled the gap and then helped us exceed 2019 levels was the fact that our average daily rate increased so substantially,” Strecker said.
Short-term rentals, for which the city currently has a moratorium on issuing any new permits, added $3.4 million in tax collections last year.
The city’s real estate transfer tax revenue shot through the roof as well — totaling $31.9 million — as Aspen encountered an influx of new residents during the pandemic.
“This is the second year in growth we’ve set a new record high, $21 million from housing real estate transfer tax, a little over $10 million in arts real estate transfer tax, this was another big year,” Strecker said. “It’s good news for us as we look to expand more housing in the community, and this gives us more resources in the short term.”
The 1% RETT is dedicated to the city’s 150 fund, which pays for deed-restricted housing, and the 0.5% goes to the Wheeler Opera House and the arts.
City financiers are cautious heading into 2022 as inflationary pressures, labor shortages and supply chain disruptions will create competition for projects and drive up construction costs.
“We had strong collections in 2021, and the knee-jerk reaction is that we have a lot of flexibility because of that, but I think we need to pause from that kind of thought process and really think about what comes into play, what do you need your resources for?” Strecker said. “In every area we are seeing an increase in costs … and we are looking at how this influences our staff, how it’s influencing how we deliver services.”
City Manager Sara Ott told council to be cautious, and the municipal government will need to focus on needs-based services rather than an expansion of services.
“Staff knows I am going to prioritize core services over new ideas right now,” she said.
Pitkin County has the third highest sales tax rate in the state at 10.40%, which is what the town of Snowmass Village levies. Aspen’s rate is 9.30%.
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