More tourists are expected to come to town next year, but they may not drive comparable sales tax growth.
It could take experiences to encourage spending, said Frank Lockwood, executive director of the Durango Area Tourism Office.
“We know we are bringing them in, but they are just not spending money in stores,” he said.
The city is projecting lodgers tax collections will increase 16.6 percent in 2018 compared with 2017. But the city reported Tuesday that it does not expect sales tax collections to increase next year.
A similar trend is apparent this year. General city sales tax collections from December 2016 through July are up 1.4 percent compared the same period in 2016, while lodgers taxes are up 5.7 percent, according to city reports.
Sales taxes have been erratic in recent years, and one factor could be the rise of internet sales, said Tim Walsworth, executive director of the Business Improvement District.
“Last year, we saw the rate of growth slow, and then this year, it’s slowing a little further,” he said, of retail sales taxes.
However, he doesn’t expect 0 percent sales tax growth in 2018.
“I think most business owners will probably be looking at modest growth,” he said.
While sales tax collections have flattened, the downtown building vacancy rate is healthy, down to 2.4 percent from 3.4 percent at the same time last year, he said.
Solving the disconnect between tourists coming to town and retail sales growth could require more festivals, plays and conferences because they are experiences that can’t be bought on the internet, Lockwood said.
A multiuse events and conference center could help diversify tourism, he said. A public-private partnership might be a way to pay for it.
“We can put something together that is custom designed for Durango,” he said.
Despite slower sales taxes collections, other economic indicators are healthy.
The unemployment rate in La Plata County is 2.1 percent, and the average wage has increased to $35,000 compared with about $32,000 a year ago, according to La Plata County Economic Development Alliance.
The Durango & Silverton Narrow Gauge Railroad expects to end its summer and fall season, which lasts from May through October, with a 3 percent increase in ridership, said Christian Robbins, a spokesman for the train.
“We were really rocking through the first part of July,” he said.
After the Lightner Creek Fire, there was a dropoff in the volume of people coming to the train website and people calling the train, he said.
“Whenever you have something like that, it does slow us down,” he said.
For its winter season, the train plans to offer more Polar Express train rides on more days in November and December.
“We are going to try to grow by another 10 percent,” he said of Christmas season ridership.
He also expects train ridership will grow next year, along with travel across the U.S. nationally.
“We invest quite a bit not only to support the train but the town with marketing dollars,” he said.
mshinn@durangoherald.com
