Moffat County’s lodging industry suffers during 1st quarter of 2014
2nd quarter looks good
July 19, 2014
Craig — The hotel and motel industry in Craig hit the lowest point in recent memory during the first quarter of this year, posting a 60 percent dip in lodging tax mainly due to Craig Station not conducting its spring outage.
Craig Station didn't have the influx of contract workers staying in Craig this spring, as the coal-fired power plant opted to conduct its outage maintenance in the fall when it had to fix a turbine. As a result, the lodging community suffered.
For the first quarter of 2014, Moffat County's lodging tax rang in at a low $11,854 compared to the $30,039 that was collected for the first quarter of 2013.
"We're struggling," said Brady Hernandez, manager of Bear Valley Inn on the east side of Craig. "I'm pretty sure all the other motels are, too."
For example, Bear Valley Inn's total revenue in March 2014 was $6,295 compared to $27,743 of total revenue in March 2013.
"For us, it's because the power plants didn't do their maintenance shutdowns that the do once a year," Hernandez said, noting that her motel is usually full for four to six weeks because of the contract workers hired by the power plants.
Recommended Stories For You
Bear Valley Inn isn't the only one struggling.
"This was the worst year that we've had in the 21 years that we've been here," said Judy Samer, who owns the Trav-O-Tel Motel at 224 E. Victory Way. "Years ago, we had some pretty lean times in the spring. (This spring) you could roller skate around the place and not bump into anything."
Her motel saw at least a 50 percent dip in business, if not more, she said.
"The first quarter was a disaster," Samer said.
Craig Station Manager Rick Johnson explained that this spring was an anomaly. The power plant had every intention of doing maintenance this spring, but when a turbine went out last fall, it made sense for the company to do its maintenance at the same time.
"We did a scheduled outage on Craig Unit 1 last fall, and that took place of the work we were going to do this spring," Johnson said, noting that's why lodgers saw such a drop in business. "It does reinforce the importance of the power plants."
The dip in business was felt across the board and will contribute to a decline in tourism funding for next year, said Melody Villard, director of the Moffat County Tourism Association.
The MCTA gets its funding from the 1.9 percent lodging tax collected from the hotel and motel business in Moffat County.
The 2014 lodging tax will fund the 2015 MCTA budget. As it currently stands, the tourism office is planning to cut roughly $63,000 out of next year's budget, making a dent in how MCTA will contribute to a variety of local organizations and how it will fund tourism outside the county.
"We are budgeting on bare bones," Villard said, noting that there is room for adjustments as the year continues, and hopefully the second, third and fourth quarters are much stronger than the first quarter for the lodging industry.
Randy Looper, who owns Elk Run Inn, said that in the nine years that he's owned the motel, he's never seen business so bad in the first quarter of the year.
"It was awful — pure and simple," he said.
In order to make ends meet, he had to dip into his reserve funds.
"If I have another (quarter) like that, I don't know what I'm going to do," he said, noting that he's had a great second quarter.
Johnson said there may be a silver lining. The power plant will have scheduled maintenance next spring and the springs after that, bringing contract workers to the area — all of whom will stay for several weeks on end.
"We'll be back to the normal outage in the spring next year," he said. "I guess I realize the importance of Craig Station to the local economy."
For many years, Craig and Moffat County's economy heavily depended on the energy industry, but there's been a big uptick in tourism.
Craig saw nearly 6,000 more visitors in 2013 compared to 2012, said Chris Oxley, executive director of the Moffat County Visitors Center and Craig Chamber of Commerce.
"It's very, very significant and a lot more recreational base than in the past," she said.
Looper also has seen more tourists visit the area than in years past, especially from the recent sage grouse tours and those visiting the area to see the wild horses at Sand Wash Basin.
"It's what has made us survive," Looper said. "I had a great June and (so far) a great July. Tourists are the reason why it was great. Tourism can brings bucks to this town if we push it."
And that's exactly what the MCTA works to do, and the lodging tax helps the tourism office promote the county.
"Those are the funds that we use to bring the people in," Villard said.
Second-quarter lodging tax numbers will come out in August, and most lodgers are optimistic.
Additionally, Southwestern Energy announced in March that it had signed an agreement to purchase the mineral leases on 312,000 net acres in Moffat and Routt counties for $180 million.
The company currently is drilling exploratory wells, and if it strikes big, more workers are sure to come.
Reach Noelle Leavitt Riley at 970-875-1790 or nriley@CraigDailyPress.com.