Tourism the Focus of Wide-Ranging Discussion at Whitefish City Hall

The role of tourism in Whitefish’s economy, and how the public perceives it, was the focus of a well-attended workshop discussion Wednesday night at Whitefish City Hall, where community members listened as elected officials, business leaders, members of the sustainable tourism management plan committee and others spoke about an industry that to some degree public perception seems to have increasingly turned against.

The event was put on by the Whitefish Sustainable Tourism Management Plan Committee, with the intent of soliciting input from community members on strategies for the next five years. While there was no open public comment, the final segment of the workshop offered people an opportunity to write in suggestions, or place stickers on potential strategies and ideas printed out on posterboard that they might support.

Tourism in Whitefish has an estimated economic value of over $143 million, according to a recently released strategic plan from the Whitefish Sustainable Tourism Management Plan Committee (STMPC). But the idea that the community may view tourism more negatively than in the recent past is supported by the results of a survey issued last fall by the STMPC. The survey received 936 responses, and Kate McMahon, a Whitefish resident and consultant who presented on the survey’s results at the meeting, said that among the questions people were asked to agree or disagree with was “Do you think tourism makes Whitefish a good place to live?”

McMahon said that 22% of people agreed with that statement and 54% disagreed. “This is a complete flipflop of what we heard six years ago,” McMahon said. When the same question was asked in a 2018 survey, she noted that 60% of people indicated their belief that tourism made Whitefish a good place to live. Among those who responded to the survey, 86% are year-round residents, and 79% have lived in Whitefish for over five years, with 70% being homeowners and 50% having a household income of over $100,000.

Andy Feury, a city councilor who graduated from high school in Kalispell in the 1970s and has been living in Whitefish since 1980, said that in his experience, how people view tourism is influenced by how long they have lived in Whitefish. Feury shared his observation that people who have been in Whitefish for between 10 and 15 years tend to find tourism the most bothersome, but he noted that those same people likely arrived as tourists in the first place.

“I think there’s a lot of us, and Mayor Muhlfeld mentioned it earlier, in the ’80s there were 13 empty buildings on Central Avenue, so people that own businesses in this community now, and understand what it was like for this community to have a very small economy — and it wasn’t a very strong economy — they’re thankful that we actually have a year-round economy here. And we have our peak seasons, and we have our low seasons,” Feury said. “But by the same token, when I graduated from high school, you didn’t really have a lot of options for what you could do for a job. I mean, most of my friends left. And, interestingly, a lot of them are back now and they enjoy being back, and they enjoy having all the amenities that tourism has afforded us.”

Feury went on to list examples of those amenities, pointing to the Smith Soccer Fields, the Central School Auditorium, the O’Shaughnessy Center, the library, and an indoor ice rink.

“We would have none of those things, were it not for our tourism economy,” Feury said.

The city has been collecting a resort tax on lodging, retail, bars and restaurants since 1995, and voters recently approved reallocating a portion of that 3% tax to go towards community housing projects and funding. That reallocation is expected to generate $27 million over a 20-year period. On an annual basis, portions of the resort tax go towards property tax relief, street repair and utilities projects, and towards merchants to offset their costs for administering the fee.

As for why responses when it comes to seeing tourism as a good thing have flipped, McMahon suggested that the tourism peaks seen during part of the COVID-19 pandemic, and the noticeable change in neighborhoods due to the proliferation of short-term rentals, could be impacting public opinion.

Brian Schott, who chairs the STMPC and does public relations work for the Whitefish Convention and Visitors Bureau, asked fourth-term Mayor John Muhlfeld early on in the meeting about his perspective on the visitor economy as a longtime resident. In his remarks, which began by referencing his first arrival in town in 1995, Muhlfeld quickly focused in on the transformation he’s seen in his own neighborhood, and beyond, from owner-occupied properties towards investment properties being used as short-term rentals.

The mayor described the city as progressive in its approach to tourism and tourism management, and said that it has done its best to regulate short-term rentals, including through early adoption of zoning restrictions, registration requirements, and its more recent hiring of a code enforcement officer focused on short-term rentals that aren’t operating legally.

“But it’s a very difficult task, it’s a very high level of proof to basically indicate if someone’s illegally renting in town. I mean, it’s just a challenging task. But I think, as a city, we’re doing everything we can.”

Short-term rentals are, according to the results of the STMPC survey, the highest ranked tourism impacts on the city, ahead of the other top vote-getters of traffic congestion and difficulties in protecting natural resources. Only 10% of respondents agreed with the statement that “Short-term rentals are a positive addition to the town.”

Julie Mullins, the executive director of the Whitefish Convention and Visitors Bureau, which is also known as Explore Whitefish, described what she characterized as indicators that the short-term rental market could be in the process of correcting itself, saying there is data that shows the demand is decreasing even as the supply continues to go up.

Mullins also shared that visitation in 2023 nearly reached its 2020 peak, with 1.45 million non-resident visitors, but that the number of visitors who stayed at least one night, according to the Institute for Tourism and Recreation Research at the University of Montana, fell to 484,000 in 2023. The closest comparison, among the 2018-2023 data presented at the meeting, is 2019, when 500,000 people stayed the night in Whitefish. The 2020 pandemic peak, by comparison, saw 660,000 people staying at least one night. Whitefish’s occupancy rate for 2023 was about 60%, which Mullins said showed the city to be underperforming compared to the American Hotel Lodging Association’s 2023 national hotel occupancy average of 63%.

“Our shoulder seasons are significant,” Mullins said.

Even as the number of people staying in Whitefish has fallen in recent years, data from the Sustainable Tourism Management Plan Committee shows traditional lodging saw occupancy increases by single digit figures for the months of July through October 2023 compared to the previous year. November and December 2023 saw single digit drops in occupancy compared to the prior year, while January of 2024 saw lodging occupancy fall by 16% and February lodging fall by almost 12%.

While there continues to be some fluctuation in how the tourism economy behaves in Whitefish, Nick Polumbus, the president of Whitefish Mountain Resort, said WMR is selling more than double the number of season passes than when he started there in 2007, and that skier visits used to be about 50-50 between locals and visitors with some variation on any given year. Those numbers have shifted and seem to be hardening though, Polumbus said, with 60% of visits now coming from season pass holders. In terms of summertime visitation levels for the mountain, Polumbus referenced seeing indications of pre-pandemic visitations levels, despite the mountain’s expenses reflecting the higher cost of doing business post-pandemic.