Lodging Incentive, letter to the editor 2014

I'm posting some old letters to the editor. This is so I can remember what I wrote, and to keep myself honest.  I'm posting them in the order I wrote them so this goes back a couple of years.

The more things change….

Summer 2014

Lodging Incentive program round 3, all 91 pages of it, oh joy. It reminds me of one of my favorite sayings "I was on schedule until I got help."

I worry, I worry a lot. I worry that the City of Aspen Government trying to "bolster" our bed base will result in a crash we haven't seen the likes of since 1895.

Let's go back to the core issue. The bed base is shrinking. This can be argued but let's just accept that right now. The premise is that we are losing market share because the bed base is shrinking. If we were constantly overbooked and our yearly occupancy rates were above the 50 percentile range I might agree.  We're not; it's not.

The shrinking bed base argument continues. In the spirit of  "If you build it they will come" increasing the bed base will magically increase market share.  In an equally audacious leap of logic if there are more "pillows" the prices will come down making Aspen more "affordable" since supply will outstrip demand.  Back in the real world loss of market share can be due to too many Guests and too few beds or too many beds and too few Guests. Both can't be true.

There isn't an Alan Greenspan on the Council or on Staff. Using "pillow count" the same way the Fed manipulates the interest rate is not a game we can win because our economics, our marketshare, is largely outside of our control. Aspen's occupancy rate follows the economic health of the global marketplace and if you don't believe that take another hard look at our 13% drop in occupancy in the 2008-09 Crash.

What if the shrinking bed base isn't the cause of the shrinking market share? What if we are looking at a symptom and not a cause? What if we increase our pillow count and our Guest rate continues to decline?  Should we be green lighting more beds just to have more beds? What if we don't have the bodies to put in those beds?  It will certainly kill those left on the margins of profitability (those older properties this  initiative is meant to "bolster"). That is, in my opinion,  tipping our kayak into a vicious circle whirlpool of death. No. Please don't make that grievous error.

What is the real cause of the loss of market share? More to the point what are the causes which we can actually try and address?

Market share can also slip due to disrepair. Here I agree we can modernize and fluff. We can certainly make the refurbishment process less onerous. "No Growth" does not mean "No Maintenance" (you have to oil the bicycle chain every once in awhile and store it out of the rain, you might even want to upgrade from the  rusty 1964 Schwinn).

Another probable cause of lower occupancy is one that the Chamber pointed to prior to the Crash- our aging demographic.

There have been 2 points made during public hearings from our "Young Professionals". The first is that "Not everybody has a couch to surf on in Aspen." and the second "There is nothing for young people to do in Aspen."  The first is ridiculously easy because the only thing it costs is loss of political "face". Allow people in Employee Housing Units to advertise in the sharing marketplace (Airbnb and the like- be a mench- waive the business license fee). The second follows the first because anyone who speaks teenager knows that "there isn't anything to do" translates into "I don't have anyplace to hang out with my friends." or more to the point "my friends aren't here."

Finally,  Council must accept that the current state of dilapidated inventory and overpriced real estate is not in small part the unexpected outcome of it's own anti-growth policies.  The more difficult the City makes development the more rapacious development we will have. Only those clever developers with deep pockets will be able to stay the course. Please accept that no-one can outthink the "evil developer" we can only hope to reward the honest one.

We have a 91 page maze of regulations, caveats,  fees and mitigations labeled as "incentives".  Take a sword to this Gordian Knot "incentive" plan, please.

footnote: "shrinking market share" is also happening with record high sales tax revenues- go figure.