Reports show Aspen economy off to strong start in 2022
As the first quarter of the year winds down, reports issued this week by Aspen’s lodging industry and the city’s finance department indicated a solid local economy so far in 2022.
February set a lodging occupancy record in Aspen, while March bookings are looking strong. Retail sales in January almost doubled totals from January 2021. And real estate transfer tax collections in the year’s first two months are pacing 30.7% ahead of the clip set last year in January and February.
In their monthly occupancy report and executive summary released Thursday, Aspen Skiing Co. and its reservations arm, Stay Aspen Snowmass, said group business propped up reservations in February, which ended with Aspen having a 79.1% occupancy rate. Snowmass notched its third-best February on record with a 78.3% occupancy rate, according to the report.
“Due to a strong calendar and a healthy combination of both leisure and group travel, February was destined to boast a solid occupancy,” the report said. “We began the month with 75.9% on the books and ended at 79.1%. Credit can be given to groups, such as the 49th annual National Brotherhood of Skiers, as well as the return of many of our Latin American guests for Carnival week, which started at the end of February and spilled into March.”
Aspen’s average daily rate up also surged from $547 in February to $913 last month, according to the report.
Another metric used to measure hotel performance is RevPar, which stands for revenue per available room. RevPar for Aspen lodges nearly tripled from $250 in February 2021 to $750 in February, according to the report, which was based on research done by DestiMetrics.
In Snowmass, the average daily rate climbed from $472 in February 2021 to $624 in February, while the RevPar increased from $223 to $489.
February was a tough business climate in 2021, due to the county’s public health orders that were not as restrictive as the previous month, but still a deterrent for travelers.
In addition to health orders upsetting the economy in the beginning months of last year, City Finance Director Pete Strecker also noted inflation and the invasion of Ukraine are factors to consider when examining more recent economic trends. In his opening remarks to the city’s January 2022 Consumption Tax Report, Strecker offered some perspective to January, which showed a 77% increase over January 2021 and a 24% bump over January 2020 in sales tax collections. The report came out Monday.
“Similar to the context provided last month, these changes represent significant resurgence in tourism activity,” Strecker reported. “But these growth figures also include a reflection of price escalation due to demand outpacing supply. While inflationary pressures were previously believed to be largely transient by the economic community, they have shown no sign of retreating and may only persist further due to the new military engagement in Ukraine.”
Led by the accommodation industry’s $40.9 million in taxable sales in January, Aspen retail sectors combined to generate $117.7 in sales that month, the city’s report said. Restaurants and bars combined for $21.4 million in January sales, up 138.1% over January 2021, a month hampered by health orders prohibiting indoor dining in Pitkin County.
“This month’s data reflects strength returning to the accommodations sector most significantly, with a synchronized increase in restaurants and bars, all largely due to the … constraints on visitation and tourism that persisted one year ago,” Strecker said.
Strecker also noted slips in the marijuana trade, down 4.2% in January from January 2021, and the health and beauty sector, off by 28.8%. Both industries account for roughly 1% of the city’s overall sales tax revenue.
“But not every sector experienced these levels of positive growth during this monthly period,” he reported. “The cannabis industry continues to be slightly down, and while only a sliver of the overall economy, health and beauty sales were down sharply.”
January also boded well for the city’s 2% lodging tax coffers, which generated $702.623; three-fourths of that money is earmarked for promoting Aspen tourism, the remaining fourth for public transportation.
Of the accommodation sector’s sales of nearly $41 million in January, short-term rentals accounted for 30% of the pie, with a reported $12.4 million generated. In December, the City Council’s Ordinance 26 put a pause on accepting new STR applications for 2022 until after Sept. 30.
February, the latest month available with city real estate transfer tax data, produced $1.5 million in collections for the city’s housing program, more than double the $711,920 made in February 2021. The Wheeler Opera House and arts side of the RETT brought in $788,144 in February, also more than doubling the $370,913 from January 2021, according to the city’s report.
For the first two months of 2022, the housing side of the RETT has made $3 million and the Wheeler side $1.6 million.
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