No smoking: Glenwood won’t have (the) Willies anymore
Smokin’ Willies already was feeling the heat before June 8.
But after the Coal Seam Fire, the restaurant known locally for its barbecued beef is toast.
Owner Greg Little is being forced to file for bankruptcy. And for him, the fire was the last straw after a series of other setbacks for his business.
Officials from the Glenwood Springs Chamber Resort Association have offered cautiously optimistic assessments about how Glenwood Springs businesses have been coping with the economic consequences of the fire, low snowpack, drought, terrorist attacks and national economic slowdown.
But Little said he’s not the only Glenwood business owner on the ropes these days.
“The chamber probably wants to paint a rosier picture, and that’s part of their responsibility, but there are a number of people that are pretty much in the same position that I am or close to it,” said Little.
Steve Beham, who owns the Bayou Restaurant in West Glenwood, agrees.
After the lunch hour at Smokin’ Willies, Beham joined Little in the restaurant to reflect on the hard times in their industry. He also bummed a cigarette off Little.
“I don’t smoke, but I’ve started lately,” said a worried Beham.
He predicted that quite a few businesses, at least in the dining industry, will be changing hands or closing in coming months.
Beham is holding his own, but it hasn’t been easy.
Normally, said Beham, his business makes 120 percent of its net profits in the five-month summer tourism season, and loses 20 percent over the rest of the year.
“This year, unfortunately, we didn’t have the five months,” he said.
The Coal Seam Fire started June 8. It burned 29 homes in the Glenwood area, caused many town residents to evacuate and some businesses to temporarily close, and burned 12,500 acres. Concern over the fire, combined with heavy smoke and media attention, hit the town’s tourism business during a peak-season month.
June sales tax revenues were down 9.7 percent compared to June 2001, and accommodations tax revenues were down 13.8 percent for the same period.
In July, sales tax revenues were down 4.6 percent, and lodging tax revenues down 5.8 percent, creating some hope that the slowdown is itself slowing down.
“As bad as the state is doing, these numbers aren’t that bad,” Marianne Virgili, the Glenwood chamber’s executive director, said recently.
Said Beham, “I feel the chamber likes to paint a rosy picture because for some reason they feel responsible. … What happened this year has nothing to do with the chamber of commerce. They haven’t done anything wrong. There’s no reason for them to try to paint a prettier picture than it is.”
Later, he said he could see trying to put the best face on things for the Front Range market that generates the bulk of Glenwood’s tourists. But he and Little believe it’s important for local residents to know that some businesses are in trouble and could use some support.
These same businesses play an important role in donating to nonprofit organizations and charitable efforts in the community.
“Well, guess what, now we are the nonprofit organization in town,” Beham said.
It used to be that Beham gave something almost every time he was approached with a charity request.
“Now I’m being very careful who I give and do not give to,” he said.
His hope is that locals will understand how hard it has been for some area businesses, and patronize them to get through these lean times.
Virgili emphathizes with Beham. She noted that area residents love the dining choices available in a tourist town.
“But you have to support those businesses,” she said.
For Little, the troubles began last year, as the national economic slowdown began to manifest itself.
“Last summer was not a good summer,” he said of 2001.
The Sept. 11, 2001, terrorist attacks, surprisingly, produced a temporary boost. People stranded and unable to fly home drove instead, and many Interstate 70 travelers stopped in Glenwood Springs to eat.
Then last winter arrived, or in the estimation of many, failed to arrive. Poor snowfall hurt skiing and winter tourism businesses.
Additional competition from new restaurants nearby, such as Tequila’s and Fiesta Guadalajara, diluted the available business.
Beham tipped his hat to Tequila’s, calling it his favorite restaurant in town. But its arrival didn’t help his business.
“Whenever you add another restaurant, it’s another piece of the pie, and everyone who’s been here, their piece gets smaller because there’s only so much to go around,” he said.
Both Beham and Little said business began to look good this spring – right up to the day of the fire.
The fire forced Little to shut down for three and a half days. Since then, business has been half of what it was last year, “which wasn’t a good year to begin with,” he said.
And his business would have been even worse, if not for the patronage of disaster-related officials from the government and insurance companies.
Analyzing the numbers
Beham said it’s important to look deeper when analyzing city sales tax and accommodations numbers. Overall figures fail to illustrate the situation in any one sector of the local economy.
Beham said the dining sector, or at least portions of it, is hit harder than others.
A breakdown of city sales tax revenues shows that to be the case, although some sectors are doing even worse.
Year-to-date figures show eating and drinking establishments to be down 2.35 percent from the same period a year ago.
Apparel/accessory stores are worst off, with a 19.27 percent drop. At the opposite extreme, building materials and supplies outlets managed 5.78 percent growth.
Falling in between are furniture/home furnishings, up 3.84 percent; food stores, up 0.91 percent; general merchandise stores, down 0.39 percent; motel/hotel, down 2.95 percent; automotive/ service stations, down 4.76 percent; miscellaneous retail, down 5.09 percent; transportation/utilities, down 9.3 percent; and all other business, down 1.77 percent.
Beham also urged caution in evaluating the June and July accommodation tax revenue figures. The number of visitors was down more than revenues, because many lodges raised rates over last year, he said.
Virgili said lodging revenues fell in June because hotel and motel owners offered discounted rates for residents displaced by the fire.
Beham said he thinks the higher-cost dinner business is being hurt worse than lunch establishments. He said locals aren’t dining out as much since the stock market drop and economic downturn.
“That probably hurt us more than anything until the Coal Seam Fire,” he said.
Little said one measurement of the hurting economy might be reflected in credit card sales, which used to be 10 to 15 percent of his business, but have grown over the last three years to 40 to 50 percent.
“It leads me to believe people are living off their cards,” he said. “A lot of people are in trouble because they get overextended.”
Beham said another significant measure of the economic downturn is the slowdown in the local rafting business. The lost business reverberates in the local tourism economy because many rafting clients stay for a couple of days in Glenwood, eating, obtaining lodging and enjoying other attractions.
Virgili said people on vacation spend twice as much on food, drink and entertainment as they do on lodging.
Beham said a tourism slowdown has a trickle-down effect of a negative variety on nontourism sectors of the economy.
“The poverty’s going to start trickling down,” he said.
Waitresses, for example, won’t have enough money to pay mortgages, buy tires and otherwise circulate dollars locally.
Little said the competition in the restaurant industry has grown tremendously in the 23 years he has been in Glenwood Springs. When he arrived, there were about 40 places to eat between West Glenwood and the Sopris Restaurant, which is off Highway 82 between Glenwood and Carbondale.
Today, there are more than 120.
In addition, there is new competition from businesses such as 7-Eleven and grocery stores with delis.
“Everywhere you go now, they offer some kind of food,” said Little.
Whatever the problems Glenwood’s tourism economy is undergoing, Little doesn’t hold the chamber responsible.
“I think the chamber is doing the best it can do in a hard situation,” he said.
He’s less happy about the behavior of Colorado Gov. Bill Owens, who commented during the height of the June fires that “all of Colorado is burning,” drawing criticism from the tourism industry.
Little said it hasn’t helped Colorado that voters failed to renew a state tourism promotion tax several years ago. Neighboring states that compete for tourists were able to gain market share from Colorado as a result.
Beham said he also favored broadening the Glenwood Springs bed tax to cover the broader tourism industry. That effort was defeated several years ago by voters, although they later voted to expand the bed tax from 1.5 to 2.5 percent.
The broader tourism tax drew criticism because it would have cost locals, too. But Beham said it would have been a small investment to draw in tourists whose spending boosts the city’s sales tax revenue and keeps property taxes low.
Meanwhile, Virgili is taking to heart Beham’s concerns about getting locals to think more about supporting local businesses.
“We are going to take seriously his suggestions,” she said.
She said the chamber already is planning a chamber check campaign that will promote shopping locally over the holidays.
Beham also has had discussions with the chamber about a promotion to get locals to take a vacation in Glenwood.
“That is something that we’re willing to do as well,” said Virgili.
She also supports Beham and Little’s notion that more funding for tourism promotion would be a good investment.
“I do agree wholehearteldy with what they’re saying,” she said.
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