Despite enjoying the best two days of the year over President’s weekend (in terms of skier numbers), MMSA CEO Rusty Gregory hinted this week that some layoffs of year-round employees may be in the works if this positive trend does not continue.
As it stands, MMSA cut wages for salaried employees 10% across the board this week. Gregory took a 15% cut.
Seasonals have already been cranked down to few/no hours. Year-round hourlies have been fortunate to get 20-22 hours/week.
Meanwhile, Mammoth Lakes Tourism (MLT) released its monthly report for January earlier this week. The report showed January room occupancy down 33% year-over-year.
Revenue per available room was down 38%, reflecting a decrease in the average daily room rate as purveyors cut rates to fill beds.
This news comes on the heels of a December which was 22.6% off from the previous year according to MLT.
While the Town’s Transient Occupancy Tax (TOT) collections were approximately $364,000 ahead of last year from July through November, December was down $418,000. MLT Executive Director John Urdi said the Town could experience a $1.5 million shortfall in TOT for FY 2011-2012.
Gregory said MMSA’s revenue for the fiscal year is 24% below what was budgeted. Skier visits are off 35%.
Budgeted numbers for FY ‘11-’12 were slightly above FY ‘10-’11 actuals.
“I am watching the trend closely this week, and I will be doing a lot of thinking over the weekend,” said Gregory.
Now onto the airport. Figured we would publish some enplanement statistics for this year, figuring the enplanement stats should correlate with other economic indicators from the cover story.
But remember, not all Town departments have abandoned the Brad Koehn School of Accounting.
Numbers are all about presentation.
According to enplanement figures provided by Assistant Airport Manager Brian Picken, December enplanements for 2011 were 3,275, up from 1,790 in 2010. January enplanements were 4,336 last month, up from 4,211 a year earlier.
However, the statistics are not broken down by flight, or route.
We can at least break down some of that for you here.
United is offering two daily San Francisco flights this year, up from one daily flight a year ago. And enplanements have more than doubled from San Francisco, indicating a growth trend.
In December and January a year ago, the first year of United’s service to SFO, the flight did 242 enplanements in December and 803 in January.
This year, the route did 1,201 enplanements in December and 1,982 in January.
Overall, December/January traffic came in at 7,611, up from 6,001 the previous year, a 27% increase.
However, there are 40 flights a week this year, up from 28 the year before, a 43% increase.
As Picken didn’t include the number of cancelled flights in his statistical breakdown, it’s hard to determine a per flight average, but intuitively, we know there were a helluva lot more cancellations due to weather in 2010-2011 versus 2011-2012, which means the numbers this year would look artificially better versus last.
As it stands, dividing December/January enplanements by (flights per week) x (6 weeks), this is what Berkeley graduate Kirkner – def. not a math major – came up with:
2010-2011: 6,001 divided by 168 = 35.7 passengers per flight
2011-2012: 7,611 divided by 240 = 31.7 passengers per flight
That amounts to 11% less passengers per flight, which is far more reflective of the year we’re having than a 27% increase in total passengers. It makes perfect sense that there would be some correlation between room occupancy and flight occupancy.
Now if my name was Walter Kieser, I could’ve just charged the Town $500 for the above.
The challenge for Mammoth Lakes Tourism Executive Director John Urdi going forward is a.) how to convince the Town and County to stick with the air service game plan in good times and bad, and b.) convincing not only governmental entities, but private businesses as well, to put “skin in the game.”
As Urdi told The Sheet last week, “Air service is the most important thing I’m doing. It’s a growth opportunity. But we need to increase participation. The less subsidy [MLT is responsible for], the more marketing [dollars to deploy elsewhere].”
Urdi says MLT can cover its share of the subsidy this year ($215,000 plus another $115,000 in overage for which he is tapping a reserve fund), but that this is not sustainable. Already, he is looking at reducing the number of summer flights – perhaps eliminating midweek flights. Flying out of Burbank versus LAX is another cost-saving option.
“We have to figure out how to reduce subsidies. I don’t have $400,000 to spend this summer,” he said.
Many wonder whether air service is worth the outlay. Urdi believes data provided through a partnership with American Express answers the question.
AMEX projected positive economic impact of more than $2 million inside the 93546 zip code and $576,000 in areas of Mono County outside of 93456.
Finally, Urdi said you have to put the air subsidies in perspective. The defintion of subsidy, he said, is the purchase of a service. And it appears the gains currently outweigh the price tag.
Addendum: The San Jose commercial service is “sucking wind” according to Urdi and will probably go away next year.