Developers create a demand that doesn’t exist
Roger This
Clearly, there are things I don’t understand. Why has Sports Illustrated picked the Colts to go to the Super Bowl? Why is the sulfurous odor from the Glenwood Hot Springs Pool enticing to lots of swimmers? Why do we need more hotels in Aspen?
Call me crazy, but I think if we needed more hotel rooms in Aspen, somebody would have already built them. Have no fear: The market has our best interests in mind.
I think the would-be developers of new Aspen hotels actually understand this simple economic concept of supply and demand and probably concede that we can figure it out, too, so they have refined the problem to be that Aspen doesn’t have enough “affordable” hotel rooms. Now, there’s a problem so ill-defined that nobody can simply address it.
Beware the muddler of public discussions; they are either local idlers with the ambition of becoming local characters or they have ulterior motives that involve a scheme to make lots of money.
Placing the word “affordable” in front of any commodity in Aspen is a proven way to garner public support, no matter how oxymoronic it is. Affordable ski pass — count me in! Building affordable hotels sounds like a way to get visiting relatives and friends off the couches of people who live in affordable housing. As a means to entice younger people and families to visit for our community’s long-term survival, I’m not so sure.
So what if middle-class visitors can sleep cheap? They still have to figure out how to get here on credit-card miles. Presumably they still have to eat, ski, shop and buy entertainment once they get here, too, right? But these are new, price-conscious visitors. If they are coming here because of lower hotel-room rates, my guess is that they are going to be looking for good deals of food, discounted shopping and lift ticket bargains, too. Who needs that?
Does Ferrari sell a midsize four-door sedan for 30 grand that might eventually lead to new customers buying the six-figure models? Heck, no! They let the suckers at Hyundai make those. The folks at Ferrari (if there are actually “folks” at Ferrari) know there are always going to be enough rich people to buy the limited number of 200-mph road rockets they make every year. We are Aspen: the Ferrari of ski resorts!
The zillion-dollar question is then: How have developers made sense out of the nonsensical? What has happened is that the developers have turned a stick into a lever. The City Council knows too much about affordable housing to be conned into doing too much deal-making in exchange for building that anymore, so the developers needed to supply their own stick, one they can hit themselves with, albeit like Hollywood actors. The new stick they’ve whittled out of a branch from the money tree is the perceived need for affordable hotels.
“OK, OK, stop hitting us with that stick. We’ll build it already, but you’ve got to give us something in exchange.”
We now have this terrible but completely fabricated problem of no hotel rooms for Joe Tourist. We, Joe Locals, have an almost spiritual connection with Joe Tourist. It is implicit that life will be better here with more “normal” tourists and fewer super-rich jerk tourists. We need to be irritated by visitors we can relate to. When a Range Rover takes up two spaces in the City Market parking lot, it’s just a rich a- … well, we all know what they are. But when it’s a clueless regular Joe Turkey in a rented Taurus, that’s us in Orlando on our own spring break. We’re still ticked off, but we get it.
While nobody has demonstrated that we actually need affordable hotels, it is a little suspicious that they clearly show us that nobody can build affordable hotels in Aspen. This shouldn’t surprise anyone. If the developers can create their own perceived problem, you know they already have a profitable solution in mind. In this case it is to build “affordable” hotel rooms that can, by the way, be converted into just about anything else in 10 years if the cheap hotels don’t show a profit by then. What are the chances? This will add to their inventory of free-market penthouses that they were allowed to build as further incentive.
Oh, what an interesting lesson in logic. Nonetheless, I have faith that the laws of economics will trump it. It will all work out, just not the way anybody except the hotel developers want it to.
Roger Marolt thinks it’s pretty slick that the developers have finally figured out how to write their own tickets on City of Aspen letterhead. Contact him at roger@maroltllp.com.
