For at least twenty years, Telluride has envisioned a necessary transition from an economy based on real estate sales and development to an economy based on tourism. It has never happened. Now that real estate is in a deep and prolonged slump, our failure to get serious about tourism has punched us in the nose.
It really hurts.
Why do I argue that tourism is the answer to Telluride’s economic riddle?
Let me answer that with another riddle: What else is there?
There are locals, some of them running for a seat on the Telluride Town Council, who don’t entirely agree that Telluride needs more tourism. They seem to think that we have enough tourism, or that tourism is the problem and not the solution, or that the slump is global and so our current economic misery couldn’t have been helped, or that we can improve what we’ve got by tinkering at the edges of the problem (“better marketing,” anyone?), or that we can somehow diversify into something else (if you just say “green” often enough…), although what that something else might be is never described.
I say it’s long past time to stop the denial and get real. It’s time to fully embrace tourism.
Of course, real estate sales and development will always be an important part of our economy. But real estate is not sustainable, by itself, as we now know beyond a shadow of a doubt. Moreover, the real estate business is highly dependent on visitation. Tourism not only brings in the customers for real estate, but tourist amenities – like good restaurants and shopping, a successful ski area and cultural events – help make the region attractive to second homeowners and full-time residents alike, thus underwriting property values.
Nobody whose income depends on tourism can doubt that the local tourist economy has been too seasonal and is thus too small. We do well for a total of about four months a year: a week at Christmas, President’s week in February, the month of March, Bluegrass week, the months of July and August, and that’s it. We have prospered over the last decade, despite having only four months a year of a viable tourism economy, only because real estate has been so robust. The late, lamented real estate boom covered our failings, allowing us to live comfortably in a state of denial.
The question is frequently asked: What can we do to add weeks or months of commerce at the level approaching what we get during those four good months? Another festival or two? More group sales? More marketing? Better access? Better hotels?
The answer is all of the above, but it is instructive to look at why we have four months of healthy business and not five or six, never mind the ten or eleven we could really use. The reason, simply, is that we get tourists precisely during the times when so-called Free Independent Travelers travel. FIT travelers, as the travel industry calls them, are people on vacation, or everyone who is not traveling on business or as part of a group. These vacationers travel in the summer, at Christmas, and, if they are skiers, in February and March. The fact that we have good visitation in those months proves that Telluride is, in fact, an attractive destination – as if anyone who lives here ever doubted it!
What do serious destination resorts do to extend their seasons? The answer, by and large, is group business. During peak seasons, when FIT business is good, year-round resorts feast on it. Then, at other times, they offer deals to groups: corporate groups, trade associations, business seminars, and the like, to keep people coming. The Telluride Ski and Golf Co. works hard to bring ski groups here before Christmas and in January, and they succeed with ski clubs. (With business groups, not so much.) Telluride has never succeeded in being a serious group destination year-round. And the reason is that we have not had the cornerstone amenity that groups require: a full-service hotel set up to accommodate them.
Does anyone remember how, before the Peaks fell into disarray, we did a whole lot better? The Peaks was once capable of bringing in groups and hopefully it will find ownership committed to restoring it. Now, and for the last year, we have the Capella, which is also group-friendly, with meeting rooms and banquet facilities, immediately adjacent to the Telluride Conference Center. The Peaks plus the Capella could add up to some real group business in Mountain Village, when the economy starts to recover. (Yes, group travel, too, has been hammered by the recession.) That would help us all.
Telluride, by contrast, is not in the game of competing for group business. We just don’t have the right accommodations for it. We are thus condemned to a four-month tourist season. If that’s all we’re going to have because we don’t have the political will or imagination to allow a sizable full-service hotel to be built in town, then we’d better be prepared to tighten our belts a lot more. Without more months of tourist traffic, main street businesses will be doomed to struggle. No longer supported by a bubble psychology, property values will have to continue to fall and so will our population.
(Or we could pray for a new real estate bubble, if anyone thinks that’s likely or desirable.)
This is our fundamental economic reality. We are either a tourist town or a ghost town. Nobody has ever proposed an alternative to tourism that can sustain us. Yes, we might become greener and grow more of our own food or generate more of our own energy, as many locals would like to see. But how will that bring a steady flow of money into our economy?
Do the candidates for the Telluride Town Council understand these economic realities? Ask them, before you vote, how they imagine Telluride’s economy of the future will function. Where will the money come from?
If they have no clue, and some of them really don’t, don’t vote for them.