Travel & Tourism: Vermont tourism industry out $700 million already - Vermont Biz

Travel & Tourism: Vermont tourism industry out $700 million already - Vermont Biz

Photo: Community support has helped Bolton Valley increase season pass sales at the family-owned resort. Courtesy photo.

COVID-19 and the resulting pandemic has taken a huge bite out of the $3 billion travel and tourism industry with visitor spending down a conservative $700 million so far, according to Heather Pelham, commissioner of the Department of Tourism and Marketing.

Pelham shared that information at a February 9 hearing of the House Commerce and Economic Development Committee.

She told the committee that the decline in visitors is reflected in the loss of tax receipts.

“So the estimates that we’re seeing so far, these are preliminary numbers, but so far, we’re looking at a loss of $48 million in rooms and meals tax receipts (revenue),” Pelham told the committee.

On an annual basis, she said tourism activity generates $373 million in tax revenue.

Pelham said the travel and tourism industry is second only to manufacturing in driving the state’s economy, employing 30,000 workers, representing 10 percent of the state’s workforce.

According to the state Tax Department, through the first three quarters of 2020, preliminary rooms and meals taxable receipts totaled $1 billion compared to $1.53 billion during the prior 2019 period. 

(Rooms and meals receipts are subject to a 9 percent tax, alcohol is 10 percent served in restaurants).

 

Challenged but Resilient

In a phone interview, Pelham didn’t sugar coat the reality: the travel and tourism industry in the state “is still very much in crisis mode.”

“This is a very resilient industry and has tried to react to every step along the way… to respond to this public health emergency, but this is an industry that has been more severely impacted than almost any other,” Pelham said.

What’s been crippling is the state-mandated travel restrictions to contain the pandemic.

As part of the Agency of Commerce and Community Development, Pelham said her department continues to reach out to businesses to make them aware of the federal and state assistance available.

Her department also remains focused on promoting the state as a tourist destination.

“We’ve been focused on whether we can achieve increased funding for tourism, to be able to fulfill the promotional end when the economy does open up again,” she said. 

Pelham added another component is to encourage Vermonters to support the travel industry while the out-of-state travel restrictions remain in place.

As it stands now, the department’s proposed fiscal 2022 budget is $3.6 million, a slight increase from last year.

However, the department has its eyes on creating a separate long-term fund to promote travel and tourism. 

Pelham said the new fund would rely on the rooms and meals tax. If the rooms and meals tax receipts at the end of a fiscal year exceed the consensus forecast, Pelham said the difference would be transferred to the new travel promotion fund.

Pelham said to get the fund started the department is asking for $1 million in seed money.

Rep. Heidi Scheuermann of Stowe has introduced H.179 to create the Tourism and Marketing Promotion Fund. The fund would be in addition to the Department of Tourism and Marketing annual appropriation. The bill is now in the House Committee on Commerce and Economic Development.

Even with the travel restrictions in place, Pelham said the department continues to promote the state “to make sure people are thinking about Vermont that it stays top of minds and that they are making plans even if the timing might be delayed more than it might be in a normal year.”

Amy Spear of the Vermont Chamber of Commerce said the pandemic has had a devastating effect on the restaurant and lodging industry in particular.

Spear, the chamber’s vice president of tourism, said it’s not uncommon for restaurants to be operating at a 50 percent loss compared to the previous year.

On the lodging side, Spear said the American Hotel and Lodging Association reported that 2020 was the worst year on record.

Nationwide, she said hotel occupancy was at 44 percent last year with Vermont’s occupancy less than that.

Spear said as a rule 50 percent is the breakeven mark for hotels.

“Vermont businesses in the travel and tourism sector are just facing an uncertain future,” she said.

She said the chamber is encouraging the Legislature to work with the Scott administration to provide business relief grants if more federal funds are available. 

“We’ve heard from a lot of folks in the industry that the relief provided by the economic recovery grants is really aiding the industry in surviving,” Spear said.

She said making health and safety the priority is understandable but what’s causing fear and anxiety in the industry especially as the summer approaches “is that there is no roadmap for reopening.”

Spear said maintaining the hospitality infrastructure is critical when the state and nation eventually emerge from the pandemic.

“As we look to the other side, we need places to stay, places to eat, places to recreate … so we have a robust tourism economy to welcome back guests,” she said

She also argued that more funding is needed to promote tourism.

Spear said it’s hard for Vermont with its $3.6 million travel and tourism budget to compete with other states like Maine with a budget of $17.1 million.

On the employment side of the equation, she said as of December the leisure and hospitality sector experienced a 40.7 percent drop in employment compared to 2019.

Spear said the decrease is almost double “any other industry so that just shows you how hard the industry has been hit.” 

Of the state chamber’s 1,000 members, half represent the tourism and hospitality sector, she said.

 

Ski Resorts

Perhaps the most significant linchpin in the travel and tourism industry are the state’s ski resorts, helping to generate directly and indirectly the bulk of the winter recreation business.

Molly Mahar of the Vermont Ski Areas Association said the season got off to a slow start with weather a factor.

But she also said ski areas wanted to ensure there was more terrain open so skiers could spread out more.

“You could have seen ski areas open sooner but they were waiting to get a little more terrain open,” said Mahar, the VSAA executive director.

She said going into the December holiday period ski areas had about half the terrain open than last year.

By January, however, skiing conditions improved significantly with an abundance of snow so as of mid-February there was more terrain open than a year ago, she said.

What continues to be a drag on the industry and travel and tourism in general are the travel restrictions, which are designed to keep Vermonters and visitors safe.

“If you’re looking at purely skier visit numbers, we’re probably looking at close to 30 percent down (mid-January, year-to-date),” Mahar said.

For the entire 2019-2020 season, she said there were 3.6 million skier visits during a shortened season compared to 4.2 million skier visits the previous season. 

Despite the challenges, Mahar made it clear the industry supports the travel restrictions.

“I think the governor has done a great job in managing the COVID response here in keeping our numbers low,” she said. 

With capacity limits in place, Mahar said ski areas are limiting the number of day tickets sold which gives preferential access to season pass holders. She said as a consequence season pass visits are up slightly while day tickets are way off. Some resorts are even requiring reservations for season pass holders if they want to ski on a certain day. 

Despite the difficulties caused by the pandemic, Mahar remains optimistic that with more people vaccinated that by next season the travel restrictions will be lifted.

But she also said if by some chance the current situation “stretches into another winter that’s going to be really detrimental to not only ski businesses but the overall hospitality businesses in general.”

Faced with a reduction in revenue, Mahar said many resorts are likely to defer capital investments this summer.

She said season pass sales were strong until it became apparent the travel restrictions were not going away. She said that resulted in an undetermined number of either refunds or pass rollovers to next season.

As head of the VSAA, Mahar said she’d like to see the state prioritize any future grant money that is available for travel and hospitality businesses. 

She said the larger independent ski areas were initially “boxed out” of the early business relief and recovery grants last year because those ski areas exceeded the revenue cap.

To help with COVID-related safety and health measures, she said the state provided $2.5 million in grants available to the ski areas.

But Mahar also said the grants probably only covered less than half the COVID-related costs. 

“I would hope that if there is money available that ski areas and hospitality businesses – since they’ve been the most affected by the travel restrictions – would be favored to get good access to that grant money if it’s available,” Mahar said.

The VSAA also supports increased funding for the Department of Tourism and Marketing, including H179 which would create the Tourism and Marketing Promotion Fund.

 

Bolton Valley

It hasn’t been an easy go of it for any ski area but in one regard Bolton Valley has an advantage over some of the larger resorts in the state, being far less dependent on attracting out-of-state skiers.

“Most of our business is local and so that has been very sustaining for us,” said Lindsay DesLauriers, president of the family-owned resort. “Our local community has continued to show interest in skiing.”

But DesLauriers said like other resorts the pandemic and its restrictions have hurt the business in the areas of lodging, food and beverage.

“We like everyone else are seeing a radical decline in hotel occupancy as the result of the travel restrictions,” she said.

The resort has taken steps to navigate capacity restrictions at its restaurants by offering takeout and in-room delivery, she said. 

“We’ve done a lot to try to adjust our food and beverage operation to the new COVID reality but nevertheless there’s basically no way to make up for the fact that there are capacity restrictions on indoor dining and also many people aren’t comfortable dining indoors,” she said.

The resort has also converted half its 60-room hotel into season-long cabana units for pass holders. The resort also manages a condo and time-share property. 

And as far as season pass sales go, DesLauriers said sales are up over last year as more locals purchased passes.

She said like other resorts Bolton offered a COVID-return policy.

If the season were cut short or people didn’t feel comfortable skiing, she said pass holders could roll 80 percent of the cost into the following year.

Photo: Bolton Valley has a loyal local following making the resort less dependent than other resorts on the out-of-state skier market. Courtesy photo.

DesLauriers said that policy went a long way to making people feel comfortable about their purchase.

“So I think that’s gone a long way to protecting us this winter is our local season pass holder base and the fact that outdoor recreation is one of the few things you can do safely,” she said. 

Bolton also has Nordic and backcountry skiing on its 1,200 acres with increased season pass sales, DesLauriers said.

She said with rare exceptions guests are abiding by the state’s COVID protocols.

With limited capacity in the base lodge, Bolton is one of the resorts that asks skiers to boot up in their vehicles.

With the pandemic showing no sign of fading anytime soon, DesLauriers said the resort’s group business has also taken a hit with cancellations extending into the summer.

“If the pandemic continues, that’s going to continue to be a real challenge I think broadly speaking for our industry,” she said. 

Bolton Valley employs 350 during the ski season.

 

Killington

The pandemic’s impact is reflected in season pass and day ticket sales at Killington and Pico.

“Leading up to the season, quite a few pass holders received refunds using our Passholder Promise,” Mike Solimano, president and general manager of Killington Resort and Pico Mountain, said in a statement. “We anticipated this might happen as a result of operational changes and travel guidelines; but on the flip side, we’ve seen an uptick in people moving to the area and purchasing season passes which have an offsetting effect. As a result of people moving to Vermont for the season, season pass usage has increased from last year but day visit business and destination business have decreased substantially.”

With fewer out of state skiers than normal, Killington has shifted its marketing efforts to attract more Vermonters to the slopes this winter and that includes second homeowners.

“There have been a lot of second homeowners who have been here since March when everything shut down or have been here since November,” said Courtney DiFiore, the resort’s communications/public relations and social media manager.

With the ski season cut short last year, DiFiore said Killington had all summer to adjust its operations to conform to the state’s COVID guidelines.

Photo: Masks are the norm around the state’s ski areas, including Killington Resort. Courtesy photo.

“We’re seeing a lot of interest in snow sports this season,” DiFiore said. “So we’re doing everything we can to make sure those who want to come out can. They just have to be a little prepared this season.”

Killington doesn’t release skier visit numbers but DiFiore said there are fewer skiers this season because of the travel restrictions. 

“While business might not be quite as strong as seasons past due to those limited capacities and physical distancing … we’re still seeing good business for this year,” DiFiore said.

On some weekends and holidays, she said the resort’s parking hits capacity.

 

Magic Mountain 

Magic Mountain President Geoff Hathaway calls it a “strange year.”

Since January there has been an abundance of snowmaking for “unbelievable” skiing conditions, he said.

In any other year that would be considered a banner year but this season like the end of last season continues to be challenged by the pandemic.

Photo: Magic Mountain in Londonderry has seen a decline in out-of-state skiers due to the pandemic. That’s been offset somewhat by an increase in season pass sales to Vermonters. Courtesy photo.

“In general, we’re managing it pretty well,” Hathaway said. “We’ve got good protocols in place … managing our crowds with inventory restrictions and things of that sort for tickets.”

Located in southern Vermont, Magic Mountain has relied traditionally on the out-of-state market, skiers who drive up the I-91 corridor, he said.

This season with the travel restrictions in place, the Londonderry ski area has seen a significant reduction in skiers from Massachusetts, Connecticut and New York, Hathaway said.

Since purchasing the ski area 2016, Hathaway has moved to attract more Vermont skiers resulting in an increase in season pass sales.

“So that’s been a huge growth area for us,” he said. “We’ve provided a lot of heavily discounted tickets for our Vermont locals and things of that sort.”

Hathaway said 35 to 40 percent of season passes are now sold to Vermonters. 

In anticipation COVID would not go away anytime soon, he said the ski area allowed season pass buyers who didn’t feel comfortable skiing to roll over their pass to the following season.

To maintain capacity limits, the ski area has reduced the number of day tickets sold. He said last year Magic sold a maximum of 1,500 tickets a day.

“Where we are this year, is we’re basically at a 600-day ticket limit,” Hathaway said. “We’ve reduced the number of tickets we will actually sell online and at the ticket booth because we want to avoid any overcrowding.”

He said limiting ticket sales has “had a severe economic impact on our business but it’s the right thing to do.”

Hathaway said the company has received some federal assistance through the Paycheck Protection Program which kept people on the payroll. 

“If programs like that are cut off, then another year is going to be pretty tough,” he said.

Vermont’s safety grants for personal protective equipment and other COVID-related items have helped as well, he said.

When it comes to capital improvements, Hathaway said Magic Mountain has set aside funds to install a quad lift and for other projects as well.

“Whether that happens or not really will depend on where this ends at in terms of can we break even this year,” he said. “If we break even this year, which would be really a positive, then we would still have that money to spend.”

If the resort winds up in the red this season, he said the company would have to “eat into some of those capital reserves.”

Hathaway added that he’s optimistic the ski area can break even thanks to strong support from pass holders and ideal snow conditions.

 

Sugarbush 

At Sugarbush Resort, overall skier visits this season are down about 20 percent, said John Bleh, the resort’s public relations and communications manager.

Bleh said the resort is selling fewer day tickets which “are priced at a pretty premium price.” 

He said the higher day ticket price reflects the lack of demand and also as a way to control capacity. 

Bleh said getting ready for the season was a learning curve on both the resort side and the guest side.

“Just getting people booting up in their car, getting people used to the way we’re doing food with ordering your food online ahead of time, limited use of the base lodge,” he said.

Looking ahead to the summer, Sugarbush has a number of weddings booked which are limited to 75 guests. Bleh said if nothing changes the resort could see cancellations or postponements until the restrictions ease.

“Weddings are our big revenue driver in the summer,” he said. 

Sugarbush is owned by Alterra Mountain Company, which owns 15 resorts in the US and Canada, including Stratton in southern Vermont.

 

Real Estate

The Mad River Valley is another hot real estate market.

“The real estate market I would say was lava hot right from the start of the pandemic even through now,” Bleh said. “Either people buying second homes or we found a lot of people just moving up here just fleeing the cities.”

He said all the remaining Gadd Brook condos sold out during the pandemic. 

The resort’s Claybrook hotel is a fractional ownership property.

“Those units have been selling super-fast when they hit the market,” he said.

Bleh said some homes in the area are sold sight unseen, including high-end homes. 

DesLauriers of Bolton Valley said even before COVID hit the area had seen an uptick in demand for real estate which has since accelerated during the pandemic.

“Anything that hits the market up here is gone very quickly and most properties are being sold before they even hit the public market,” she said. “So real estate is very desirable up here right now … for condos, town houses and single-family homes.”

Mahar of the VSAA said the state has seen an influx of second homeowners “who decided to relocate here for the season or permanently” which has bumped up season pass sales.

In turn, she said ski areas have noticed an uptick in mid-week skiing. 

 

NSAA

Nationally, it continues to be a challenging time for the industry but based on anecdotal information skier visits are holding their own, said Adrienne Sala Isaac of the National Ski Areas Association. 

“Despite maybe travel restrictions or capacity restrictions, we are kind of seeing nationally, people do want to get out and ski or ride,” Isaac said.

She said outdoor recreation in general has surged during the pandemic because it’s a safe activity.

“I think some ski areas are going to have a very good year when it comes to visitations,” she said. “There are obviously going to be challenges in Vermont given the travel restrictions and the international travel restrictions (and)losing that Canadian business as well.”

When it comes to travel restrictions, Isaac said as far as she knows Vermont is the only major ski state where a state has imposed a mandatory 14-day quarantine for visitors. (Visitors to the state can quarantine for seven days after they take a COVID test with a negative result).

Isaac said in Colorado where she lives COVID protocols/requirements were driven at the county level.

According to the state’s website, Colorado only requires visitors to quarantine in the event of exposure.

In that case, visitors need to remain in Colorado to complete their quarantine or isolation.

New Mexico “strongly” advises visitors to quarantine for 14 days but it’s not required; California urges all non-residents to avoid travel to the state for leisure purposes; Utah has no travel or quarantine restrictions for visitors.

In New England, Maine requires out-of-state travelers to furnish a negative COVID-19 test within 72 hours prior to arrival or complete a 10-day quarantine (Vermont and New Hampshire residents are exempt); New Hampshire’s guidance asks non-New England visitors to self-quarantine for 14 days. 

Outside of Hawaii, Vermont has the fewest COVID cases and fewest deaths per capita, according to the CDC.

Last season, the 323-member NSAA reported 51.5 million skier visits during a shortened season. Before the pandemic hit, Isaac said, the industry was on track for its fourth best season.

 

State Parks

Although the state parks got off to a delayed opening, there was “an explosion of demand” once the 55 parks opened in June, said Nate McKeen, state lands program manager, Department of Forests, Parks and Recreation.

Last year, the state parks attracted 767,847 visitors, far less than a normal year when the parks open before or on Memorial Day.

“We’ve been over a million (visitors) the last couple of years but in that short period of time it was definitely at a higher rate than normal,” McKeen said.

The decline in visitors is reflected in the revenue numbers. McKeen said in a normal year the state parks generate $6.5 million in fees. Last year, he said the number was $5.2 million. 

Vermonters did flock to the parks in large numbers.

McKeen said there was a 130 percent increase in camping by Vermonters over 2019 while in-state day visits were 90 percent of the previous year.

McKeen said the travel restrictions obviously hurt the out-of-state market, including Canada. 

He said because of the physical distancing requirements, cleaning regimens and work schedules “most campgrounds were operating at 75 percent capacity.”

McKeen said because of the virus the department shut down its cottage and cabin rentals last year. There are 13 cottages and 40 cabins scattered around the state parks.

For the coming season, McKeen said even if precautions remain in place, he expects the parks to open as normal on Memorial Day. Plans also include bringing back the cottage and cabin rentals.

Unlike last year when only 75 percent of the camp sites were available, he said this season the plan is to increase the number of available sites.

Boat rentals and outdoor shelters for groups also will be available this season. 

McKeen said based on Governor Scott’s budget the department will make substantial investments in the state parks.

“We’re hoping to have an infusion in capital investments in trails and outdoor recreation,” he said.

The governor’s budget includes $10.6 million in capital improvements at the state parks and another $1 million to build and repair rustic cabins.

The state parks employ a year-round staff of 47 and another 340 seasonal workers, plus 150 volunteers.

 

Rail Trail

A renewed interest in all things outdoors isn’t confined to the state parks and ski areas.

The Lamoille Valley Rail Trail, the longest rail trail in New England, reported a 15 percent jump in usage last year, according to Ken Brown, rail trail projects manager.

Brown said while snowmobile membership is similar to past years “in all other uses the trail was busier this summer with foot traffic and cycle traffic and I suspect it’s busier now than past winters with foot traffic.”

Stretching from St Johnsbury to Swanton, the trail follows the path of the former Lamoille Valley Railroad.

Thirty-three miles of the trail are completed and open with the remaining 60 miles scheduled for completion in 2023. 

The rail trail is maintained by the 35,000-member Vermont Association of Snow Travelers (VAST) and its 131-member clubs.

Photo: The Lamoille Valley Rail Trail is a popular multi-use trail that extends from St. Johnsbury to Swanton. Last year, the trail saw a 15 percent increase in use by hikers, cyclists, snowshoers and snowmobilers. Courtesy photo.

Constructed and compacted with crushed stone aggregate, the rail trail is open to hikers, cyclists, horseback riding, snowshoeing and snowmobiling.

While only 33 of the 93 miles of the trail are complete, Brown said more trail is open for snowmobiles, which can traverse rough terrain.

Brown said the numbers nationwide show increased usage of rail trails and other outdoor spaces.

He said VAST has put up signs “to encourage people to keep their distance” when encountering other users along the eight-feet wide trail.

Brown said there is an economic impact with the trail passing within a short distance of nearby towns including Johnson, Hyde Park, Cambridge, and Danville.

Final construction tab for the trail is $22 million, with $7 million in federal dollars and VAST money already spent. The remaining $15 million was secured with $2.8 million in state funding which will leverage federal transportation money to complete the project.