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Editorial

The fallout of the winter of 2004-05

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The numbers aren’t in on the winter of 2004-05 but the early betting is the final figures will show destination visits were not down too much; it was the lack of regional visits that really hurt.

As Whistler-Blackcomb’s bar graph of annual snowfall accumulations showed in last week’s paper, this winter’s snow totals were about one quarter of the 25 year average. Regional skiers and boarders knew the snow conditions and were more likely to pick and chose their ski days, whereas destination visitors have usually planned for and travelled a long way to enjoy a multiple-day holiday, so once they were here they might as well give it a try.

The good news is the regional skiers will return next year with the snow. And many destination visitors were ecstatic about the extended periods of sunshine we had this winter and thought the skiing was wonderful.

The question is whether some of the destination skiers who were here during the warm, wet gloomy period of mid-January and early February will come back. If they had been here previously they may recognize that they just hit a bad week in a strange winter. But for a few, this winter may have turned them off Whistler forever.

Regardless of whether they were destination or regional skiers, when the figures are finally tallied up 2004-05 is likely to be the fourth consecutive winter of disappointing numbers. For many businesses it has been and will continue to be a difficult time. Less directly affected will be two of Whistler’s institutions, the resort municipality and Tourism Whistler.

According to last year’s five year financial plan, the municipality was anticipating revenues of about $45 million for fiscal 2004. Taxes account for the largest share of that, about $28 million. Although property assessments were down slightly this year for the first time in years, a poor winter is not going to have an impact on real estate values. Moreover, last year’s financial plan forecasted that the assessment base would increase 2 per cent in 2005 due to construction.

Whistler often points out how Colorado resort towns are less reliant on property tax revenue and more dependent on local taxes on goods and services. In years when tourism and consumer spending is up this gives those local governments more revenue; in poor years they have less revenue. While the RMOW has expressed the need for similar taxation powers to boost revenues, in a winter like 2004-05 the dependence on property taxes is producing more budget stability for Whistler than Colorado resort towns would experience. The biggest variable in property tax revenue the municipality faces is from the Class 1/6 issue.

The second largest source of municipal revenue is fees and charges, which were expected to bring in about $13 million this past year. Fees and charges are to be reviewed annually but only a few are affected by visitor numbers. Utilities are operated on a self-funded basis through user fees and fees for development related functions are set to recover full costs. However, some municipal programs are offered at a lower rate to residents than to visitors, so there could be some decline there.

Sponsorships and partnerships are another source of funds that appears to be increasing as the municipality continues its effort to find new and creative sources of revenue.

The 2 per cent hotel room tax is the primary source of municipal revenue directly tied to how well the resort does. The hotel tax brought in nearly $4 million in 2001 but has declined each year since then. Last year the municipality estimated $3.2 million in revenue from the hotel tax, rising to $3.6 million in 2005.

Slightly more than $500,000 of the hotel tax revenue goes to Tourism Whistler. In this age of global tourism every marketing dollar counts, and while Tourism Whistler’s budget pales in comparison to many of its competitors’ it is – like the RMOW’s budget – based on stable funding sources. Membership fees are the foundation of the Tourism Whistler budget, and with new properties opening this past year the membership is continuing to grow.

As well, Tourism Whistler partners with Tourism B.C., Tourism Vancouver and other organizations to get the most out of its marketing dollars. The provincial government has doubled funding to Tourism B.C. this year and provided one-time funding for regional tourism marketing organizations.

The point of all this is that the budgets for Tourism Whistler and the municipality are not going to be adversely affected by this winter – and that’s good, because marketing efforts and municipal services will need to be better than ever to recover from this year.

The local construction industry should also do well this year as Olympic projects get underway and other real estate developments continue.

The full impact of this winter will be borne primarily by the frontline people in the resort: the retailers, restaurateurs, hotels and property managers, tour operators and all the people who work in those businesses – and of course, Whistler-Blackcomb.

Just something to think about as budgets are being finalized and tax rates set.

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