High Country Conundrum

The ability to work from anywhere and a shift by property owners to rent short-term rather than long-term has made it so difficult for people in mountain towns to secure housing that businesses in those communities are having a tough time finding employees.

Retailers, restaurants and other businesses are restricting their hours and even closing their doors completely several days a week because they can’t find enough people to serve their customers.

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The problem puts resort towns in jeopardy of providing substandard services to the tourists who are the lifeblood of Colorado’s economy — if they stop coming to the state because they’ve had a bad experience, it could be tough to get them back.

“If you go into any resort community and walk down Main Street, you’ll see a huge number of help-wanted signs,” said Margaret Bowes, executive director of the Colorado Association of Ski Towns. “It’s hard to find any employer — whether it’s a resort or local government or a retail shop or restaurant — that isn’t looking for employees. It all comes down to housing.”

Employers may receive dozens of applications from potential workers, but the number gets whittled down quickly when they ask applicants whether they’ve secured housing. Not only is housing unavailable in the towns were employees work, it’s also difficult to find in the so-called bedroom communities.

“Escalating real estate values are making so prices are so high that it’s just unattainable for many people working locally,” Bowes said. “When a starter home is approaching $1 million, it’s hard to get into the real estate market.”

What’s come to be known as the Great Resignation — dissatisfied workers quitting their jobs — coupled with baby boomers aging out of the workforce also is impacting the ability of businesses to hire workers. The restrictions on hiring immigrants is just another factor adding to the conundrum.


“We’ve relied on a lot of immigrants covering a lot of really hard work that it’s hard to find locals to do,” said Jon Stavney, director of the Northwest Colorado Council of Governments, an association run by leaders of six counties and 30 towns. “We continue to not have a plan related to economic development and immigration. We treat it as a cultural issue. We don’t have meat-packing plants in the high country, but we do have the construction industry and hospitality that isn’t always glamorous and front-facing. We are not settled nationally about immigration and our need for it, and it hurts.”

Sue Stillwell, office manager of excavation business Stan Miller Inc., said the company is probably short 10 people because of the housing shortage — and Stan Miller pays well.

“It’s definitely a problem with new people coming to the area,” she said. “We’ll put an ad in the paper nationwide and have people who really want to live in Breckenridge, and then they get here and can’t find a place.”


Many other employers are in the same boat. Advertisements in the Summit Daily News for Summit Stage shuttle drivers offer applicants a $1,000 signing bonus; wages starting at $23.93 per hour; paid training and a $250 end-of-training bonus; year-round bonus opportunities up to $1,200 per year; and benefits including health insurance, vision, dental and retirement.

Stillwell, who owns a home in Fairplay and rents an apartment in Breckenridge to be closer to her office, keeps an eye on the Summit County real estate just in case there’s an opportunity to purchase something at a reasonable price. She recently saw a listing for a 1,073-square-foot, two-bedroom, two-bath home built in 1994 in Frisco for $889,000.

“The HOA dues are astronomical — they’re $474 a month,” she said.

“Escalating real estate values are making so prices are so high that it’s just unattainable for many people working locally.” -Margaret Bowes, executive director of the Colorado Association of Ski Towns


Lack of workers resulting from escalating real estate prices has most mountain communities trying figure out how to balance the need for housing for local employees and the desire of people with second homes in the mountains to rent them out on a short-term basis.

The potential solutions are all over the board, and many jurisdictions asked voters to weigh in by answering ballot questions during the November 2021 election. In Avon, for example, voters overwhelmingly approved a 2 percent short-term retail tax to fund community housing. While voters in Telluride rejected capping short-term rental licenses at 400, which would have cut the number in half, they approved capping the licenses at the current level for two years and doubling license fees, which are dedicated to an affordable housing fund.

“There are a lot of different approaches,” Bowes said. “We’re not going to be able to build our way out of this — there just isn’t the available land owned by the local governments to build workforce housing.”

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While there was much speculation that the increased crowds, parking impacts and other effects of having more people that normal in mountain communities was a result of part-time owners occupying their homes during the pandemic, “The Mountain Migration Report” from the Northwest Colorado Council of Governments examining the impacts of COVID on housing and services found that the population surge and crowds were instead caused by:

  • Newcomers moving in and either buying or renting
  • Growth in demand for and use of homes for a month or a season
  • Visitors who stayed in lodging, short- and mid-term rentals or camped in the backcountry
  • Residents and visitors alike staying for consistent and longer stretches, rather than only visiting the mountains on weekends and holidays
  • Year-round residents traveling out of the area less frequently during COVID
  • Day trippers and drive-in traffic seeking relief from COVID isolation
  • Part-time residents occupying their homes full time

“We have had an influx of newcomers that have had a significant impact on our housing market — both rental and ownership,” Stavney said. “Many are working while they’re visiting and are here for longer than the average visitor.”


And because those people are able to work jobs based in other locations remotely, their income isn’t tied to the mountain economy. They also tend to make more money than mountain locals, who on average make less than $150,000 per year.

All of this combines to make it nearly impossible for people who are employed in a resort town to live in the same community in which they work as home prices reached record highs and rents increased 20 percent to 40 percent in just one year, according to the report.

“Availability of homes for rent and purchase plummeted to critical levels in many communities,” the report states. “Newcomers with significantly higher incomes than year-round residents more often won the competition for scarce housing units.”

Which type skier are you? The Walmart, Costco or Whole Foods model

The ski industry has been on a wild ride since the resorts were shut down last March. Mountain real estate has been on a tear and summer visitation has been off the charts. Winter looks to follow the upward trend.

How are various Colorado ski resorts adapting their winter season due to the coronavirus? What does this mean for residential and commercial real estate in resort communities throughout Colorado?

Walmart and Costco rule skiing throughout the world

Aaron Brill, the owner of Silverton mountain in SW Colorado said, “the Ikon and Epic passes represent the Costco and Walmart of skiing.” He calls it big box consumerism creeping into skiing. (source Denver Post).

The new model in the ski industry is consolidation and most resorts are getting on one of the two trains. For example, Telluride is on the Epic Pass train and Copper/Eldora got on the Ikon pass train.

The two passes are approaching consolidation much differently. Every major resort in the United States is either owned or affiliated with one of the two passes.

The Walmart model:

Vail Resorts’ Epic Pass is going for the lowest cost model to drive volume to its resorts. Think of Breckenridge: it is one of the busiest resorts in the country.

Vail might be heading towards a “Spirit Airlines” model where getting on the plane is inexpensive and they make their money by the add ons (assigned seats, bags, etc…). Vail resorts is beginning this shift. For example, the cost of food at Breckenridge is almost double Steamboat (Alterra Resort).

My wife was at Breckenridge with our daughter and got chicken nuggets for lunch… the cost was $50 dollars! At Breckenridge parking is also 10-20 bucks whereas in Steamboat there are several free lots close to the base area.

The Costco Model:

Alterra’s Ikon Pass is adopting the Costco model. It is a little more expensive than Walmart, but you get better service and a higher-end experience with mountains like Steamboat and Snowmass.

Like Costco, the Ikon Pass isn’t trying to be the low-cost leader and then nickel and dime you on everything… at least not yet.

The Whole Foods Model:

Resorts like Aspen and Telluride are focusing on the ultra-high net worth markets by pricing their products substantially higher.

For example, a season pass to Aspen is almost 2500 for an adult versus 800-900 for an Ikon or Epic pass. They are using pricing to limit volume and ensure a better guest experience with limited crowds.

Coronavirus has thrown a wrench in the Costco and Walmart model

When Coronavirus hit, it was immediately apparent that the old ways of doing business would not work. Last season on a powder day on a holiday weekend, lines stretched for half a mile at Vail, in Breckenridge it was taking two hours to get from Breckenridge to Frisco due to traffic volume.

In Steamboat lines for the gondola stretched over a quarter of a mile encompassing most of the base area. How do these models work in the age of Coronavirus? Unfortunately, they no longer work.

The models quickly break. The all you can eat buffet cannot work in the new paradigm.

What happens now?

Epic: Vail Resorts is the largest ski operator relying heavily on the “all you can eat buffet” to drive substantial volume to their resorts. Vail was the first to implement a reservation system where pass holders get 7 reserved days and then can make a reservation the week of, if space allows. This is quite the change from being able to go whenever you wanted.

Ikon: Alterra is taking a different tact where they are not requiring reservations, but they are substantially limiting the ability to purchase day passes to try to control volume. I’m not optimistic this model will work and foresee Alterra adopting some sort of a reservation system.

Copper/Eldora: (Powder Corp) which are part of the Ikon Pass implemented a policy where users will reserve parking as opposed to lift reservations. Copper took a twist on this model by saying for 500 dollars more than your pass, you can add on a “premier” pass and have guaranteed parking, ensuring you can ski when you want and also getting a separate line.

Aspen: Aspen, which is affiliated with the Ikon Pass, is going a different route by raising the price of tickets to 2500 for a season pass to substantially reduce volume. At the same time, they are offering less expensive pass products to encourage weekday visitation to spread out the volume.

Why did they each implement different models?

The beauty of America is that each company can decide for itself how to maximize goodwill and return on their investment. It is well known that drive up traffic is substantially less valuable than destination traffic so each resort is trying to ensure they protect the destination traveler who is going to spend more money as opposed to the all you can eat buffet skier.

What is the correct solution?

Looking at the four models (we will count Copper as a separate model than Alterra), which solution will be the “best model?”

Unfortunately, “best” will be dependent on where you fit in the skiing paradigm. For example, if you live in Denver and would come up every weekend, the Vail model doesn’t work for you. If you are a destination skier, the Vail model is spectacular as you can basically have the mountain at substantially reduced capacity.

Alterra, on the other hand, is pushing people into their pass products to ensure they can ride. Copper is taking a blended approach with a reservation system but you can upgrade if you want to ensure you are able to ski.

Personally, I think a blended approach will win this season. The pass products were priced inexpensively in order to gain market share. Just like the airlines, you will see tiering. For example, first class is priced higher than economy with more amenities. The ski industry will embrace a similar model to optimize revenue and goodwill. Once riders experience an uncrowded mountain, I’m doubtful they will want to go back to the old free for all.

What impact will this have on real estate?

Nightly rentals in Vail communities will have a tough time this winter (Breckenridge, Vail) that are not directly owned or managed by Vail resorts. With a limitation of 7 days of reserved skiing there will be substantial reductions in volumes. Each of these markets was built on the assumption of volume which will lead to considerable excess capacity.

In Alterra communities, the story will be a bit mixed. If Alterra can continue the season with no reservations, this will move more volume to places like Steamboat and Winter Park. Copper’s unique solution will help its lodging as when you reserve lodging you get a parking space and are guaranteed to ski.

Aspen will have little impact as they are already catering to the extremely high net worth which will limit drive up volume which wasn’t that profitable. I don’t see much impact on Aspen rentals.

What will happen in the long term?

Even though this ski season will be unique, I don’t think that the solutions created will magically disappear. Each of the resorts will continue to evolve and I see some sort of process in place to limit the crazy volumes that many resorts were starting to experience. They will do this via reservations, limitations of day passes, and pricing.

Impact on ski real estate

As volumes decrease in the winter, real estate will be impacted in each of the respective mountain communities. Winter is by far the most profitable season in the mountains. During the winter room rates will decline along with occupancy. Furthermore, commercial properties will be impacted due to the decline in volume due to resort limitations.

On the residential side, many nightly rentals will suffer. I see many of these rentals being sold to second homeowners. Due to the immense shortage of inventory, they should be absorbed relatively quickly without any impact on pricing.

On the commercial side, I’m not as optimistic. Rental rates will have to come down due to the reduced volume of visitors. For example, the t-shirt shop will sell less t-shirts due to the decline in visitors, they can’t increase the prices much as nobody would buy them. Businesses will demand reductions in rents or totally close their businesses as they are no longer profitable.

The changes in the ski industry are here to stay. I don’t see a return to the “all you can eat” buffet of the past as resorts focus more on the user experience and profit optimization.

With volume reductions, residential and commercial property owners will have to adapt to the new paradigm.

The changes in the ski industry to control volume will be with us long after the coronavirus comes under control.