Friday, December 17, 2010

Resort-area economy on encouraging track

Ketchum, Sun Valley’s LOT collections stop falling in 2010


By TREVON MILLIARD
Express Staff Writer

Ketchum charges a 2 percent sales tax on by-the-glass liquor sales. Photo by David N. Seelig

The year's about over and the northern Wood River Valley's economy is on track to reach the bar set in 2009, not showing any growth over 2009 but not showing any reduction either.

That's not saying a whole lot considering how low of a bar was set in 2009, but before the resort area's economy starts making its way upward, it has to stop falling. Business was progressively dwindling from 2007 to 2009, according to the cities' local-option tax reports.

LOT—commonly called the "tourist tax"—is charged in both Ketchum and Sun Valley and is collected monthly. Since it applies to the resort towns' main industries, it's a simple gauge for reading the economy. Ketchum charges a 2 percent sales tax on lodging and by-the-glass liquor sales, and a 1 percent tax on retail sales and building materials.

Sun Valley charges a 3 percent tax on retail, by-the-glass liquor sales and lodging. Ski lift tickets incur a 1 percent tax. LOT has been assessed for years in both cities, and can therefore be used for establishing short- and long-term trends.

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Ketchum sees fourth month of growth

Ketchum's LOT for business done in October was just released and shows that businesses overall made 11 percent more money than they did in October 2009. It marks the fourth consecutive month of growth over the previous year. September experienced 8 percent growth, August nearly 10 percent and July 1 percent. Such a run hasn't been seen in four years, according to LOT statistics, and has raised Ketchum's economy up to its 2009 level. The last year that Ketchum businesses managed to make as much money as the year prior was in 2006. After that, less and less money came in. Ketchum businesses made 7 percent less money in 2007 than 2006, 9 percent less in 2008 than 2007 and a whopping 22 percent less in 2009 than 2008.

That means that even though 2010 has caught up to Ketchum's economy of 2009, the city's businesses are still in a rut dug during the past few years. So far in 2010, Ketchum businesses have made 23 percent less money than is usual for January through October, according to an average calculated by using LOT back to 1998, with amounts inflated to match the dollar's current value.

But the past four months are showing noteworthy growth. This growth, however, isn't always distributed across all sectors. Ketchum categorizes LOT into five sectors: retail, hotel rooms, short-term condo rentals, liquor sales and building-material sales. Even though condos and building materials experienced 64 and 44 percent growth respectively compared to October 2009, retail and liquor sales were flat for the month, and hotels made 18 percent less money.

Sun Valley economy bounds forward

Over the past couple of years, none of Ketchum's monthly LOT collections have even come close to their long-term averages—usually making a quarter less than is usual. But this year, Sun Valley nearly matched its long-term average for October, collecting $75,543. The month's norm from 2000 until now is $75,569, with past years' amounts inflated to match the dollar's current value. The last time Sun Valley matched a long-term average for any month was November 2008, pulling in 10 percent more than the normal $36,600.

Sun Valley does, however, have a smaller economy than Ketchum, pulling 25 percent less in LOT for October compared to Ketchum's $100,200. LOT actually makes Sun Valley's economy seem larger than it really is, because Sun Valley charges higher rates.

Trevon Milliard: tmilliard@mtexpress.com




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