Currently, the funds raised by the tax are paid out to two of Blaine County’s core air service and marketing organizations: the Sun Valley Air Service Board, to bolster flight service in and out of Friedman Memorial Airport through revenue-guarantee contracts with United Airlines and Alaska Airlines, and Visit Sun Valley, to advertise Sun Valley to prospective travelers.

The pay structure could change this spring. On May 16, all three cities will consider a ballot measure asking to split their respective “1% for Air” tax into “.5% Housing, .5% Air.” If voters opt to permanently split the tax, jurisdictions will send upwards of $1 million in taxpayer money to support workforce housing instead of tourism.

Slack-season sales strong in Sun Valley, Hailey

In October 2022, tax receipts on tourist-driven sales in Sun Valley and Hailey were up 19-20% compared to October 2021, increasing from $47,060 to $56,020 in Sun Valley and $8,750 to $10,520 in Hailey.

Tax revenue on Ketchum’s tourist-driven sales for the month of October decreased slightly year-over-year, from $195,940 in October 2021 down to $191,690 in October 2022. However, sales rebounded in November, increasing 10% year-over-year from $184,120 in November 2021 to $201,670 in November 2022. Sun Valley and Hailey also saw modest gains in revenue this past November, between 1-6%.

December and January appear to have been lucrative months for tourism in the valley. In December 2022, Sun Valley’s “1% for Air” tax brought in $137,790, about 17% more than it did in December 2021 ($117,380). Ketchum’s “1% for Air” tax brought in $435,060, up 21% from December 2021 ($360,810), and Hailey’s “1%” tax brought in $12,800, up 16% from December 2021 ($11,000).

In January 2023, Sun Valley’s “1% for Air” tax generated $100,890, up 18% from the $85,530 generated in January 2022. Ketchum’s “1%” tax generated $302,990, up 9% year-over-year ($277,440), while Hailey’s tax brought in $20,250, up 16% year-over-year ($18,470).

Looking at all four months, sales in December 2022 were the strongest, generating more than half a million in “1% for Air” tax revenue ($585,640). Out of all three cities, Sun Valley saw the most year-over-year growth in its “1% for Air” tax revenue (16%) between the Oct. 1 start of the fiscal year and the end of January.

Of the approximately $1.5 million that the three cities raised through January, $670,000 has been paid to Fly Sun Valley Alliance and $820,000 to Visit Sun Valley so far, according to the Sun Valley Air Service Board. Both of those four-month payouts are more than the previous year. (Between October 2021 and January 2022, for instance, Fly Sun Valley received $569,660 and Visit Sun Valley received $755,130.)

Tourism indicators correlate with LOT gains

In January 2022, north-valley hotels were around 46.49% full, and that rate increased to 53% in January 2023, according to a report prepared by Visit Sun Valley.

February occupancy also increased, from 61% in 2022 to 66% last month, the organization reported.

Average daily rates went up about 7% in January and February, too, from $306 per night in January 2022 to $326 per night in January 2023 and $357 per night in February 2022 to $381 per night in February 2023.

Local transportation officials have also noted record-high passenger counts throughout 2022 and into 2023. Last month, Friedman Memorial Airport Director Chris Pomeroy reported that 12,060 people boarded commercial flights at Friedman in January 2023, compared to 11,945 in January 2022. He added that the airport saw a record 102,500 enplanements last year, eclipsing its previous record of 95,801 enplanements.

“We faced a bit of a dry spell just after the Martin Luther King Jr. weekend, yet the lack of snow didn’t deter people from showing up,” Visit Sun Valley stated in its March report. “Restaurants and shops were bustling, hotels had strong occupancy numbers and rates, and commercial airline flights were we well utilized.”