Blaine County received $169 million in economic benefit from air service in and out of Friedman Memorial Airport last year, according to the Fly Sun Valley Alliance. That figure includes spending on lodging, food, entertainment, recreation, shopping and car rentals by visitors ($124 million) and second homeowners ($45 million).
Sales transactions in Hailey, Sun Valley and Ketchum between October 2022 and January 2023 generated a collective $1.52 million for two of Blaine County’s core air service and marketing organizations, according to tax receipts shared in a recent Sun Valley Air Service Board report.
That figure marks a 12% year-over-year increase in revenue generated by the three cities’ “1% for Air” local-option sales taxes, which brought in $1.35 million between Oct. 2021 and Jan. 2022.
The “1% for Air” taxes—which have been place for the past decade—add 1% to transactions commonly made by tourists. For example, in Hailey the tax is applied to rental cars and hotel rooms; in Sun Valley, it's on lift and event tickets, food and beverage transactions and golf memberships; and Ketchum applies it to alcoholic beverage sales, lift tickets, season passes, event rentals, hotel rooms and short-term rentals.
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.”
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One correction. LOT does not apply to IKON passes. So we have situation where a local buys a season pass and pays the LOT while a tourist buys an IKON and doesn’t’ t pay the LOT. That makes…no sense.
Welcome to the discussion.