With Demand Flat, Telluride Needs to Adapt
by Karen James
Dec 16, 2010 | 2121 views | 3 3 comments | 7 7 recommendations | email to a friend | print
Occupancy Down, Rates Up, Compared to Other Resorts

TELLURIDE –Telluride held it’s own as a destination resort last year, but with consumer confidence low and demand flat, this winter’s success will be all about creativity.

“It’s the most adaptive who will survive,” summed up Ralf Garrison, a destination tourism “supply side expert” who spoke at the Telluride Tourism Board/Marketing Telluride Inc. annual meeting last week.

Garrison, president of the Advisory Group of Denver, Inc., which provides aggregate data on mountain destination guests and advance reservation patterns through its Mountain Travel Research Program, or MTRiP, report to the TTB and other resorts, suggested that the resort would need to sharpen its game to remain competitive this winter.

“I don’t know how you make us a Zumba vacation package, that’s up to someone else,” said Garrison, referring to the hot, new Latin-inspired fitness class packing gyms around the country.

But, with the economy remaining volatile and the vacation market creating little demand, it will be up to us to come up with something “bright and shiny” to convince visitors why they should vacation in Telluride rather than somewhere else.

Quite simply, “In a flat market it’s a market share war, if somebody wins then somebody else loses,” Garrison said.

Winter occupancy is pacing about one percent behind last year, putting Telluride behind its competitive set, which is pacing three percent ahead in occupancy for the season.

However, while Telluride’s occupancy numbers are down compared to other destination resorts, it leads the pack in its attempts to raise room rates for the season, with average daily rate up 18 percent compared to the previous year.

“That’s a more impressive change in rate in a down market than I’ve ever seen,” said Garrison, noting that Telluride’s competitors are keeping their room rates flat compared to last year.

Cautioning that consumers continue to expect deals, “Price carefully,” he warned. “The ice is thin.”

Although lodgers might be able to offset lower occupancy with higher rates to balance their own books, that kind of strategy could harm local restaurants and retailers, which depend on substantial tourist foot traffic to make it through the season.

“All is not back into balance; I hope there’s enough demand to raise price as quickly as is being attempted,” Garrison said. “You must be really vigilant about watching how things go.”

In addition to last winter’s superior snow and the summer’s back-to-back Phish concerts, Telluride may have enjoyed a better than average 2010 thanks to a strong media campaign that has finally hit its stride.

“This is one of the best years I’ve seen in media,” said Signature Advertising President Karen Ruby, of the TTB/MTI advertising strategy.

With 46 percent of its advertising budget allocated to online efforts, Ruby said Telluride is seeing better than average response, including a .26 percent click through rate on banner advertisements (compared to .1 percent nationally) and an 8 percent click through rate on emails (compared to 3 percent nationwide).

And in an indication that Telluride’s official visitor website, www.visittelluride.com, is more relevant to its viewers than ever, Ruby noted that visitors spent an average of four minutes on the site in 2010 compared to less than one minute before 2005.

In other good news TTB/MTI Chief Executive Officer Scott McQuade reported that his organization is fully staffed for the first time in three years, giving him hope that it will be able to nearly double the roughly $538,000 in group sales revenues it earned in 2010 to meet its “somewhat daunting” sales forecast of about $1.025 million in 2011.

Moving its Visitor’s Center back to its former location above Clark’s Market over the summer from it’s previous home in a small, modular building further east on Colorado Avenue had a profound effect, enabling the central reservations staff to convert day visitors to the region into overnight guests to the tune of nearly $188,000 in additional lodging revenue.

But Telluride Ski and Golf Co. Chief Executive Officer Dave Riley wrapped up the meeting with quite a different tone.

“I don’t believe all this great news has gotten us through the end zone,” he said, beginning an extended football metaphor in which he likened Telluride to a team with a beautiful stadium, but missing the key players it needs to win.

Despite poor retail and restaurant activity, little incentive for commercial investment, slow real estate sales and stagnant shoulder seasons, “There is a resistance to recruiting some of the players we need,” he continued, naming a functioning conference center with multiple break out rooms to host large groups and recognizable, branded hotels as the needed stars.

“Some are concerned that if bring we in some of those key players they may not get to play as much,” he suggested.

But the addition of more visible hotel brands, “Is not going to come at the expense of the small boutique hotel,” he said.

“It’s going to rise the tide.”

“Doing these things doesn’t mean explosive growth,” Riley continued.

“Why is it so difficult to understand that with some slight course corrections things can be so much better for the people that live and work here,” he asked.

Comments
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MainSt.BizOwner
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December 22, 2010
Mr. McQuade seems like a very nice and competent individual.... but the fact of the matter is the Tourism Board is and has been underperforming.

The decision (before his time) seven years ago to buy the awkwardly placed former Visitor Center for $180k and sell it for $8k was a COMPLETE DISASTER and a gross waste of lodging tax & business license revenue - leaving Scott and his office scrambling to find a (any) buyer for this thing instead of focusing on their mission statement of driving more visitors to our valley.

This is by almost everyones admission one of the most beautiful places in the world, and overall a great skiing experience. The fact we are lagging behind our competition in terms of getting people here is unacceptable. There must be a better way.
FaceOnMars
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December 17, 2010
Telluride is lacking "star players"?!?

As far as I'm concerned, this is a very telling remark ... since I believe there have ALWAYS been stars here - it's just that nobody's ever created playing/trading cards with our pictures on the front & stats on the back.

Maybe if some of the key players didn't have a course correction imposed upon them in the first season (remember the retro bonus affair?!?), there wouldn't be as much resistance from the line. Then again, maybe it was a good thing we all learned early on about the nature of things to come. Some are still learning the hard way (with pom poms still in hand [at least for the time being while it APPEARS their interests MIGHT be served]).

Ever stop to think that maybe this isn't a "football town"? I see far more people skiing/snowboarding vs. what are actually the more popular team sports in town: soccer, hockey, volleyball and basketball. My suspicion is that most folks who've gravitated here aren't as in tune with a strict orderly hierarchy imposed upon them with some big whig wearing oversized headphones calling the shots!

I believe a Phil Jackson model would go a lot further in Telluride, because as far as I'm concerned there are MANY Michael Jordans living here.
ResponsibleFreePress
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December 16, 2010
Hey, I have an idea...lets just fire the consultants, run a good media campaign, and lower prices so we can compete with those smart enough to fire the consultants, run a good media campaign and lower prices.

Really, dumb and dumber...

What is so difficult about this?