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Sun Valley Resort Spearheads Effort For Tax To Market Air Flights

Sun Valley region aerial

Regional air flights into isolated Rocky Mountain valleys are the “lifeblood” of mountain resorts in the winter. So says Jack Sibbach, director of marketing at Sun Valley Resort, who is part of a campaign to approve a five-year, 1 percent tax to expand air service into the Wood River Valley.

“We’ve (Sun Valley Resort) been signing contracts and MRGs (minimum-revenue guarantees) with airlines since the 1970s,” Sibbach told SnoCountry.com. “We’ve always paid 100 percent of the MRGs for seats and marketing.”

But things have stagnated in the last 6-7 years, Sibbach said, and the region has lost enplanements from all our departure cities, including nearby Salt Lake City. Last season, the only direct service was SkyWest/Horizon Air’s daily flights to and from Seattle and Los Angeles.

The resort seeks to spread out the cost of guaranteeing a profit for airlines and marketing, an expense that Sibbach said has been shouldered almost exclusively by Sun Valley Resort for the past 40 years. While one-third of airline passengers come to the resort, one-third are locals, and another one-third are visitors and second-home owners, he says.

“We in no way want to lower or cease our obligations,” said Sibbach. “What we want is a partnership for economic vitality in the valley. If RJs (regional jets with greater range than prop jets) fly into here, we can easily expand our markets into new cities.”

Supporters, coalesced into the nonprofit Fly Sun Valley Alliance, want to put a 1 percent “local option tax” proposal on the Nov. 6 ballot with the money geared specifically toward attracting and marketing air service into Hailey’s Friedman Memorial Airport. If passed, the tax is expected to bring in about $2 million a year to pay the MRGs and marketing expenses. The guarantees are paid on empty seats to motivate airlines to operate in risky markets such as seasonal resort communities.

Local-option taxes, which assess various rates to receipts of hotel rooms, rental cars, liquor sales and some retail sales, is designed to tax tourists rather than locals. About 80 percent of the existing local option taxes are currently paid by outsiders, Sibbach said.

With more money to MRGs, Sibbach said that there’s a strong possibility that regional jets that carried 70-90 passengers might begin service to the airport. Those jets can range as far as Chicago, Minneapolis and Dallas, he said. If OK’d, Sun Valley’s first move would be to extend marketing to San Francisco, he said.

The city of Sun Valley already has the tax question on the ballot. Ketchum leaders say they are on board, and Hailey is expected to follow, leaving the final decision up to the voters.

Many other isolated mountain resorts pay MRGs, such as SteamboatVailJackson Hole, and Mammoth Mountain, Sibbach said.

Photo: Fly Sun Valley Alliance

 

 

 

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