During the height of the recession, Robin Doussard wrote in Oregon Business magazine that the destination resort was "a once-coveted business that's in trouble with regulators, residents, environmentalists, and the development industry. It's a business under fire and in flux, and one with an uncertain future." Almost four years later the future of these resorts looks more optimistic as existing destination resorts have stabilized and are once again expanding.
There are only two destination resorts in Oregon that are outside of the Central Oregon counties of Crook and Deschutes. Salishan Resort is on the Oregon Coast just south of Lincoln City, and Running Y Ranch is in South Central Oregon near Klamath Falls. Tetherow Resort is included in the list even though they do not currently provide overnight accommodations. The resort is building a new lodge for overnight guests expected to be completed in spring 2014.
According to Alan Unger, Deschutes County Commissioner and long-time resident, there are a variety of factors that contribute to the high concentration of destination resorts in Central Oregon. First, the region is only a short drive from the population centers in the Willamette Valley and the Portland metro area. Second, there is an airport in Redmond that provides daily nonstop service between many of the West Coast's major cities. Third, recreational opportunities abound with skiing, golfing, fishing, hiking, biking, and kayaking, just to name a few. Finally, the climate of the region is relatively mild with a significant number of sunny days. In addition to the amenities of Central Oregon, Unger emphasized the importance of the early resorts, such as Sunriver and Black Butte Ranch, that proved that these types of resorts can be successful in the region. From a planning perspective, Deschutes County was one of the first counties in Oregon to complete their zoning for destination resorts, which gave them a head start in approving and developing these resorts.
|Destination Resorts in Oregon|
|Year Opened||"Goal 8" Resort?||County|
|Black Butte Ranch||1971||No||Deschutes|
|Running Y Ranch Resort||1996||Yes||Klamath|
|Seventh Mountain Resort||1973||No||Deschutes|
Destination resort jobs are often considered unattractive due to the seasonal nature of the business and a perception that many of the jobs are part-time. Although these businesses are very seasonal, the median weekly hours worked during the peak season in 2012 (3rd quarter) came in considerably higher than the leisure and hospitality sector as a whole. Destination resort workers put in a median of about 32 hours per week, while the median for the leisure and hospitality sector was 20 hours per week (Graph 2).
Not all the businesses included in these two- or three-mile buffer zones exist because of the destination resort. For example, many could have existed in their location well before the destination resort was developed, or are in industries that do not directly benefit from a destination resort, like agriculture or manufacturing. In other instances, the resorts are fairly close to other populated areas and the firms within the buffer zones draw customers from these other areas as well. This is probably true of Eagle Crest, which is set just on the outskirts of Redmond, and Salishan, which also has a lot of nearby development in the Gleneden Beach area to its south.
Nonetheless, the majority of the employment in these buffer zones provides goods or services that support these destination resorts. Buffer zone employment is concentrated in accommodation and food services; retail trade; and real estate, rental, and leasing (Table 2). The combined payroll for these buffer zone businesses in 2012 was $30.5 million.
|Industries Located Near Oregon's Destination Resorts: 2012|
|Accommodation and Food Services||265||$4,445,706||$16,776|
|Real Estate and Rental and Leasing||167||$3,843,360||$23,014|
|Administrative and Support and Waste Management and Remediation Services||142||$3,193,429||$22,489|
|Health Care and Social Assistance||65||$1,664,661||$25,610|
|Arts, Entertainment, and Recreation||53||$971,708||$18,334|
|Professional, Scientific, and Technical Services||25||$1,268,474||$50,739|
|Agriculture, Forestry, Fishing and Hunting||21||$605,766||$28,846|
|Finance and Insurance||14||$448,325||$32,023|
|Transportation and Warehousing||8||$220,855||$27,607|
In addition to transient room taxes, these resorts are some of the largest contributors to their home county property tax base. Sticking with Deschutes County, the 2013 net assessed value of the Sunriver service district was over $1 billion, while the Black Butte Ranch service district net assessed value exceeded $500 million. The resorts, private homes, and businesses in these communities account for millions of dollars in property taxes each year.
Although these resorts contribute to the local tax base, they also cost taxpayers money for roads, schools, and other infrastructure. An often debated fact is whether or not the tax contributions by these resorts exceeds the tax burden these resorts place on county budgets.
Destination resort employment peaked in 2008 with an annual average employment of 2,082. Much like the rest of the tourism industry, employment in destination resorts plummeted for years after the recession. Employment in these nine resorts bottomed out in 2010. On an annual average basis, destination resorts lost about 15 percent of total employment during these down years (-313). Destination resorts lost a greater proportion of employment than Oregon's accommodation and food services industry, which only declined by about 6 percent between 2008 and 2010. This greater proportional loss of jobs is likely due to the collapse of destination resort real estate sales and values, as well as a decrease in demand for luxury overnight accommodations during difficult economic conditions. In addition to accommodation and food services, destination resorts include employment in real estate offices; recreation (predominately golf courses); entertainment; and public services, such as fire protection.
Much like the rest of the tourism industry, employment in the destination resort business is very seasonal. Although a handful of these resorts provide winter recreation opportunities, they are few compared with the summertime activities. August and July are the peak employment months in these resorts, when employment is typically about 65 percent higher than in the winter months of January and February. These seasonal employment swings can be seen on Graph 3.
While destination resorts began to add back jobs in 2011, these gains have yet to lead to a recovery in the industry. In June, employment was 2,233, which is the highest June employment since 2008; however it is still 10 percent off the peak. Employment in destination resorts will likely recover in the near future based on a number of recent trends. First, Oregon's accommodation and food services industry exceeded prerecession employment totals this year and more individuals will likely spend the extra amount to visit these luxury accommodations as consumer spending rises. Second, the real estate market is recovering rapidly, particularly in Central Oregon. Sales of single family homes in Sunriver increased dramatically in 2012. In fact, Sunriver posted more home sales in the 3rd quarter of 2013 than any period in the past five years. Median sale prices in Sunriver are not rising as quickly as other parts of the region, as homes in destination resorts are priced on the upper end of the market. For instance, the median sale price of Sunriver homes in September was $355,000 compared with $268,000 in nearby Bend.
Eight resorts were approved prior to the recession, but never developed due to the difficult economic conditions. Combined, these eight approved resorts account for over 17,000 acres of developable land; 6,815 residential lots; and 3,435 overnight units. The success of the existing resorts to sell their real estate and build homes on vacant lots will likely be a proxy for future growth of these approved but undeveloped resorts.
Regardless of what Oregon's resorts of tomorrow look like, there will likely always be a demand for the traditional destination resort as many tourists voice a preference for these vacation communities. For those that prefer these destination resorts over a traditional hotel experience it often comes down to the accommodations. One resort visitor commented that "it is more fun to stay in a house or condo with a big group of friends than have separate hotel rooms?it can also be more affordable, especially having a full kitchen." Another comment was that these tend to be "very kid and family friendly with more privacy." Finally, these resorts often provide a "unique experience, great ambiance, and fun activities." These attributes, as well as the recreational opportunities and natural beauty of destination resorts, will continue to draw visitors from around Oregon and beyond.