Relief, even gratitude, seems to be the emotion of the day among shop owners, restaurateurs and innkeepers in Durango as COVID-19’s economic punches lost some sting in late summer.
“We’re doing better than I initially anticipated when we first reopened,” said Gabriel Gentile, owner of VAPE Durango. “I was scared about our customer base. I thought we’d have 25% of our regular customers come back. Instead, it was more like 75%.”
Gentile said he was a bit upset at state rules that allowed recreational marijuana and liquor stores to stay open as essential businesses during the pandemic while his vaping store had to close.
He attributed the loss of 25% of his regular customers to people who went back to smoking cigarettes and cigars when they were cut off from using vaping products.
“If they’re going to allow liquor stores and marijuana stores to stay open, we should have been allowed to stay open,” he said. “If you’re going to cater to people’s vices, then all of us should have been allowed to reopen.”
Instead, Gentile closed his shop from late February to May 1. He estimated he lost $30,000 in sales. He estimated his annual sales fell 25%, and his summer sales, 15%.
Despite the closure, sales in July and August have increased, helped in part by the city’s decision to allow bump-outs for restaurants, the Business Improvement District’s action to keep businesses informed about protocols for reopening and his efforts to accommodate social distancing, mask wearing and other health measures.
Final numbers for the city of Durango’s summer sales tax collections won’t be in for a couple months, and June’s numbers might not inspire confidence, but anecdotal evidence backs Gentile’s impression that the season picked up in July and August.
Durango’s latest Monthly Tax Report lists June sales tax collections just shy of $2.36 million based on a sales tax rate of 3%, a 4.9% decrease in revenue from June 2019. A 0.5% addition to the sales tax rate, which didn’t take effect until July 2019, raised an additional $393,276 in June.
The lodgers tax took in $69,554 for room rentals in June, a 51.4% decrease from June 2019.
Tim Walsworth, executive director of the Business Improvement District, said hotel room rentals, like sales tax collections, have improved the past two months.
Industry data available to BID shows summer hotel room occupancy for Durango in June was at 52.6%, a decline of 35.9% from 2019; at 74.8% for July, a decline of 15.9% from 2019; and at 72.8% for the first three weeks of August, a decline of 9.3% from 2019.
Phoebe Ogden, general manager of the Holiday Inn & Suites, noticed business pick up in mid-June, though she’s still down for July and August.
Typically in July, Ogden said her inn is filled each night. This July, the hotel approached full occupancy, but only reached it a few nights during the month. Additionally, room rates were lowered from $199 a night in July 2019 to a range between $169 to $179 this July.
Still, Ogden considers the past two months a win.
“I have to say we’ve surpassed my expectations with tourism for the summer. July was a lot stronger than I anticipated. Especially with the limited train trips,” she said. “We’re still looking at August numbers, but demand continued to be strong. We did, like all the hotels, definitely reduce rates this summer. So that still hurts revenue.”
Late summer’s promising trend might not be sustainable.
September, usually Holiday Inn’s second busiest month, might be impaired because COVID-19 has devastated the bus tour industry. Bus tours to view fall colors constitute a big chunk of hotel rooms in Durango.
“It’ll be interesting to see what September brings. But my expectations are low,” she said. “We’re not seeing any bus tours. I’ve had one bus tour all summer, and it was four people. October is typically a slow month, so we’ll see how the next two months go.”
Laura Lewis Marchino, executive director of the Region 9 Economic Development District of Southwest Colorado, which covers five counties in Southwest Colorado, including La Plata and Montezuma, said most communities have been “pleasantly surprised by the stability and even increase in sales tax numbers.”
“Just about every industry except fitness centers, movie theaters obviously, bars and some health industries such as massage are seeing better-than-expected numbers this summer,” she said.
Tom Dragt, co-owner with his wife, Carrie, of Old Colorado Vintage, will attest to strong summer sales. August was the best month the store has had since it opened seven years ago.
“Colorado is an easy place to come to,” Tom Dragt said. “People still want to travel. But they don’t want to be in crowds. They don’t want to go to Disneyland. They don’t want to go to Las Vegas. People come to Colorado to be outdoors, and outdoors, it’s easy to social-distance.”
It helped that Durango is a drive market.
“We ask everyone where they’re coming from, and a lot of people are coming from Arizona and New Mexico, even Texas, to beat the heat. A lot of people are saying, ‘We’re tired of being cooped up,’” Dragt said.
Like Ogden, Carrie Dragt, worries the shoulder seasons and winter could reverse late summer’s positive trend. She believes Snowdown planners were too hasty canceling the winter carnival, which had been scheduled from Jan. 29 to Feb. 2, 2021.
“It’s five months away. We don’t know what it’s going to look like in five months,” she said. “It’s an event that really helps out in a slow season. That’s what it was designed for.”
Walsworth said some sectors are in the black for 2020. According to city sales tax reports through June, hardware and lumber were up 7.2%; sporting goods, 4.3%; and miscellaneous retail up 1.7%.
Still, sales tax collections from restaurants and taverns were down by 20% compared with 2019.
“We still need to see August and September reports to truly know how it went,” he said.
Karen Barger, owner Seasons, says COVID-19 restrictions have limited her seating capacity to just short of 50% of normal, but summer business has been better than she anticipated.
“It began to pick up about the middle of June, and we’re still seeing some really good success right now,” she said. “Is it the numbers from our pre-COVID business? No. But we can’t see as many people either. But we’re seating who we can, and we’ve been pretty happy with it given what we can do with the restrictions in place.”
Barger praised some regulatory decisions made to handle COVID-19 – including Gov. Jared Polis’ decision to allow liquor sales for restaurants, which has helped with wine sales at Seasons, which is now offering take-and-make meals, introduced to boost sales during the pandemic.
Bump-outs helped boost customers’ spirits and available seating.
“I’d like to see them even if there aren’t restrictions,” Barger said. “I think people enjoy sitting outside. I love the vibrant nature they bring to downtown. It just feels good. We would like to see bump-outs come back every year.”
Still, COVID-19 is weighing on bottom line in an industry with thin margins.
“The cost of doing business certainly is up with all the different things that we have to do,” Barger said. “We have one extra person a shift just responsible for cleaning, all they do is clean. Is this doable in the long run? No. If we can continue to be at least as successful as we were for the last 60 to 90 days, it might be OK, but I think we could be in for quite a rough winter,” she said.
parmijo@durangoherald.com
Telluride, Pagosa Springs report surprisingly strong tourism
Durango is not the only town in Southwest Colorado surprised by the strength of its late summer tourism season.
“I think that we have been very lucky,” said Telluride Mayor DeLanie Young. “We are in better shape than we expected. From a sales tax perspective, we are down a little bit, but it’s not as bad as we expected. And it’s been quite difficult for a lot of our local folks to grapple with how busy we are because we are in the middle of the pandemic.”
June sales tax numbers for Telluride, the latest month reported, show collections of $547,755, a 27.5% reduction from June 2019 collections of $755,163.
Young said Telluride’s finance director recently informed the Town Council that as of Aug. 25, sales tax collections were down only 5% year to date.
“We had to ask her three times because we couldn’t believe it. We were sort of in disbelief. I don’t know how else to describe it because we’re in the middle of the pandemic,” she said.
Jennifer Green, executive director of Visit Pagosa Springs, said the town’s June 2020 lodgers tax collections actually increased 24.9%, up $17,483 compared with June 2019.
Pagosa Springs does not have a sales tax.
Year to date, through June, Pagosa Springs and Archuleta County’s combined lodgers tax collections were down only 5.07%, or $19,912, she said.
Green pointed to three main factors behind robust lodgers tax numbers in Pagosa Springs and Archuleta County:
Most summer vacations became road trips, and Southwest Colorado is a strong drive market.
The mountainous, rural nature of Southwest Colorado lends itself to social distancing.
New Mexico legally required a 14-day quarantine for visitors, which kept some visitors away even though the state was not enforcing the quarantine.
parmijo@durangoherald.com
