Colorado ski resorts battle for direct flights with million-dollar subsidies
Colorado ski resorts are fighting over direct airline flights from major population centres.
"You can?t run a resort business successfully when you?re not competitive," Crested Butte Mountain Resort founder Ralph Walton told the Denver Post . "Airlines have gotten to the point that if you don?t have direct flights, you are not competitive."
In 1985, Walton signed a $1.2-million US contract ? the first of its kind ? with American Airlines that had the resort paying for any empty seats.
Now, Colorado resorts such as Vail, Steamboat, Telluride, Crested Butte and Durango put up millions of dollars in guarantees to lure flights to their airports. The resorts subsidize the flights by paying for empty seats.
"Access to resorts is arguably the most critical issue for running a healthy business today," said Colorado Ski Country USA president David Perry.
Perry is a former Whistler-Blackcomb marketing executive who started a similar program here in 1998 between the two mountains and the Whistler Resort Association.
The group subsidized fares on a couple of different airlines in the hopes of enticing Americans to ski here. Low-priced flights aimed at skiers in San Francisco, Los Angeles and New York were offered as part of the resort?s ski and accommodation packages, but only in off-peak periods.
In Colorado, the guaranteed money ? based on the cost of the flight plus a profit margin ? is determined by the airlines and is then negotiated with the resorts.
Last year, Steamboat decided not to subsidize daily flights from Chicago. An economic impact study showed that decision caused businesses to lose out on $5 million US.
This year, the resort and the community have coughed up $2.9 million US to lure 89 weekly flights on five airlines from seven different American cities, including Chicago, Dallas, Newark, N.J., and Denver.
"The destination skier is suffering from time poverty," said Steamboat marketing director Andy Wirth. "If it takes too much time and hassle to get here, they won?t come.
"These flights are a critical part of our success or failure these days."
Last year, direct flights to Telluride ? which ponies up $1.2 million US in guarantees ? generated $20 million US in business for the community. In Durango, a $1.2-million US guarantee earned the resort $28 million US.
But these subsidies are peanuts when compared to the kind of money thrown around by Vail Resorts.
Vail guarantees airlines a total of $10 million US, but their regional airport is Colorado?s second busiest on winter weekends (following Denver). Five airlines offer 125 non-stop flights per week from 14 different cities, including Atlanta and Cincinnati.
Aspen, on the other hand, hasn?t paid airlines a dime since 1996. Three airlines offer five daily non-stop flights from five different American cities each winter, although six other airlines have stopped flying into Aspen in the last five years.
Colorado resorts, which are all members of the Colorado Ski Country USA marketing group, go toe-to-toe with each other when it comes to negotiating with airlines. Some agreements do not allow airlines to fly direct into competing resorts.
"It?s a gloves-off battle," said Steamboat?s Wirth.