Economic mountaineering

While late 19^th-century silver miners exhausted themselves on the peaks and ridges of nearby mountains, modern business owners in the Wood River Valley find themselves climbing a more figurative mountain—the difficulty of staying alive in a tourist economy.

Observers of the Wood River Valley business scene point to four things that make doing business here continuously precipitous: the fragility of a tourist-based economy, the cyclical nature of tourist seasons, the difficulty of retaining employees and increasing competition from sources outside the area in the form of corporate chains, electronic or mail-order shopping.

"If we don’t wake up and watch how we’re doing business, we may not be around," observed The Elephant’s Perch owner Bob Rosso.

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The Wood River Valley has a one-product economy, and if that product gets damaged, everybody’s in trouble.

"The only thing you produce is the pleasantness of your surroundings," said Chuck Skoro, chairman of Boise state University’s economics department. "You are vulnerable to the whims of tourism."

In any one-product economy, Skoro said, business owners and government officials need to be careful. Poor planning, which could make the "pleasantness" of the Wood River Valley less desirable, Skoro said, could harm the tourism industry.

Local merchants depend on the surrounding mountains to bring them customers, but it’s the peaks and valleys of tourist seasons that determine whether businesses live or die.

Rob Santa, owner of ski, snowboard, bike and outdoor equipment stores Sturtevants and Sturtos, said the seasonal nature of selling goods to tourists is his biggest obstacle as a business owner.

What was formerly known as fall slack, he said, has turned into a fair business season. The business always does well in summer. Winter depends on Mother Nature and how much snow she will release, but spring slack continues to be a very bad business season, he said.

"In the 16 years I’ve been here, I have yet to see a measurable improvement in April, May and June business," he said of the months that don’t seem to appeal to many tourists.

Local business owners should take warning, Santa said, in light of this winter’s marginal increase in skier days. While Colorado and Utah ski resorts had little snow and experienced dramatic skier day losses, Sun Valley was buried under above average snows, but had only a three-percent increase in skier days over last year.

"It was disappointing to have uniquely great snow and not see visitor increases," he said. "It throws a red flag."

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Though Santa said he does not have too much of a problem retaining employees, because of the "fun" nature of what his stores sell, many of the valley’s other businesses do.

In January, the Sun Valley/Ketchum Chamber of Commerce hosted a panel-led discussion on employee retention in which five local business owners shared their perspectives on the issue.

The lack of affordable housing in the valley is one of the foremost obstacles Wood River Valley employers need to overcome, the panelists agreed. Expensive housing is a primary factor driving would-be long-term employees away from the valley.

The current housing scenario will probably not change in the near future, Sun Valley Company human resources director Norma Ellison predicted, and that is a major stumbling block for the resort.

Sun Valley Company offers high-occupancy dorm rooms as part of its solution to the affordable housing puzzle. But Ellison pointed out that it is a short-term or seasonal solution at best.

"How long can people endure close, confined housing?" she asked.

Keith Perry, owner of Perry’s Restaurant, offers employee housing in condo units in Ketchum.

"I don’t know if I’d still be in business if we hadn’t done this," he said.

But high employee turnover is an obstacle Perry said he has learned to live with. Last fall, he tried to operate the restaurant with a limited number of employees while he searched for applicants committed to staying over the long term. The result, he said, was that he was understaffed for several months.

Some valley employers have turned to offering benefits to retain employees for longer periods.

Perry offers his full-time, year-round employees health benefits and paid vacations—unusual in the food service industry—and all employees work under an incentive program that offers an additional $1 for every hour worked with the company if the employee stays through an agreed-upon time.

Santa buys his employees ski days and hosts employee parties. He also encourages outdoor and recreational pursuits that include testing of the store’s products.

But when push comes to shove, he acknowledged, people work for money. Sturtevants offers bonuses, a 401(K) plan and advancement opportunities.

Not all local employers can afford to provide employee housing or benefits, however.

"We know that the employee issue is a big concern for area businesses," chamber executive director Carol Waller said.

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Ketchum and Sun Valley business owners aren’t without support. The Sun Valley/Ketchum Chamber of Commerce is constantly working to promote the Wood River Valley as a tourist destination.

The chamber undertakes an annual advertising campaign. Each year, $800,000, which is drawn from Ketchum’s and the city of Sun Valley’s local-option tax proceeds, is set aside for marketing. Of that sum, a majority is used to drum up winter business.

"Sun Valley has a low-key presence in the marketplace," the chamber’s executive director Waller admitted. "We just haven’t spent the money (that other resorts do) to get people here. You need to have a presence in the ski magazines. That’s really important, but we’re trying to pick up on Internet and direct-mail marketing. The staff here does a great job with that."

The chamber also spends portions of its $800,000 marketing budget on Internet marketing, vacation planners, direct marketing at U.S. and international ski shows, direct mail marketing to potential valley visitors, a business relocation guide and on promoting special events.

The largest portion of the marketing budget goes to winter promotion. Last year, the chamber spent about $360,000 of the marketing budget to attract winter tourists.

The second highest portion of the marketing budget goes to answering inquiries about the Sun Valley area. That includes vacation planners, phone services and postage for answering requests. About $202,000 has gone to answer inquires annually.

In the past several years, the Sun Valley/Ketchum chamber’s staff has worked on promoting off-season events to bring tourists to the area during fall and spring slack. Trailing of the Sheep, the Sun Valley Health and Wellness Festival and October’s Swing’n Dixie Jazz Jamboree serve as examples.

The chamber will also instigate a new program on Friday, July 2, called Ketch’um Alive Tonight, that is designed to boost Ketchum’s night-time business. The program has been funded by the city of Ketchum.

Waller said the hope for the new program is to boost business for downtown merchants overall.

"We want the downtown to come alive," she said.

Participating businesses will sport flags on their storefronts and offer Friday night specials through the program’s conclusion in early September. Also, bands or special entertainment-oriented events will be featured in different locations around the city each Friday.

Similar programs have successfully summoned evening and night-time shoppers in cities like Boise and Crested Butte, Colo.

Though chamber marketing does attract customers to the area, it can’t control where those customers shop.

Starbucks and Tully’s coffee companies aren’t just coming to town, they are here. Concern about what the north Wood River Valley could become in light of the corporate coffee companies’—or other chain operations’—arrival is still reverberating through local grapevines and over steaming coffee cups in the thin mountain air.

Ketchum businessman Paul Kenny, one of the founders of Paul Kenny’s Ski and Sports at the Warm Springs base of Bald Mountain, as well as owner of The Mercantile of Sun Valley, a clothing store that was in the Lane Mercantile Building, said the coffee chains will be a positive addition to the local economy. Currently, Kenny is a leasing and sales agent for Colliers International, a commercial real estate company.

"Hopefully, the big guys will become anchor tenants and provide a draw for customers, be a boon to existing local businesses," Kenny said. "If we can get them to add to fund raisers, like Tully’s and Starbucks are doing off the bat, they can add to the community."

Both coffee chains are, in fact, contributing to local charitable organizations upon their arrival to the valley.

Tully’s, which opened its doors to customers Friday afternoon, donated $50,000 to the Bill Janss Community Center, and the company has been a long-time supporter of the Sun Valley Ski Education Foundation.

Starbucks, scheduled to host a grand opening on Saturday, will donate its first day’s proceeds to the Blaine County Recreation District. Starbucks also donates its day-old pastries and coffee that has been exposed to air more than seven days to local charitable organizations. The Ketchum Starbucks will make those donations to the Blaine County Senior Center in Hailey.

Kenny said the chains can add pull to Ketchum’s downtown and the entire Sun Valley area, but he said he doesn’t want to see a board room full of white-collared executives in New York City making decisions that will affect this area.

Declared Kenny: "I want these chains to stay—to add health to the local economy, but the town needs a commitment from them. They need to entrench themselves here and keep people employed. We’re all scared of change, but maybe the world market with the Internet and chains and such will be good for us."

But the competition from those two chain operations pales in comparison to another threat—the growing availability of goods on the World Wide Web and from mail order catalogues. The world market is real and has infiltrated the Wood River Valley.

Companies such as Amazon.com, ebay.com, priceline.com, travelocity.com, Campmore, Eddie Bauer, L.L. Bean and many others are providing goods at competitive prices and they eliminate the customer’s need to leave their homes to shop.

Boise State’s Skoro said competition against the world’s economy, not just among valley businesses, does make it harder for local business owners to make a living.

"I can’t imagine, being an Amazon.com book buyer, that there are still book stores in business," he said. "It’s too easy to buy books on the Internet."

Iconoclast Books owner Gary Hunt said Internet sales have affected his retail, in-the-store sales, but he too has joined the Internet shopping world and is selling books online at www.iconoclastbooks.com. Internet sales carry Iconoclast during slack periods, Hunt said.

"(The Internet) is changing the way book business is being done," he said. "If you don’t stick with it, you’re going to be left behind."

Skoro admitted some people apparently feel differently than he does and local shopping districts do have appeal that will always draw customers. Sturtevant’s and Sturto’s Santa said the world market "could be considered a threat, but it’s my feeling that resort sports specialists have the opportunity to do things urban retailers can not."

Santa’s stores offer goods such as ski boots and custom foot beds that require customers to go to his shop. Also, services like tuning and renting skis will continue to require customers to visit similar businesses.