Jul. 6, 2005 - VAIL -- Vacationers relaxed in the sun and splashed in the pool at the Landmark Tower in Lionshead Village on a recent summer afternoon, seemingly oblivious to the bulldozers rumbling noisily just yards away.

The cacophony of heavy construction doesn't appear to be deterring tourists, say those who run Lionshead hotels, restaurants and stores.

More than $1 billion is being spent over the next few years on the redevelopment of Vail Valley by the town of Vail, private developers and Vail Resorts Inc.

In Lionshead, much of the major construction started this spring and will continue through the summer.

The Gondola Building and Sunbird Lodge were recently demolished to make room for The Arrabelle at Vail Square, a $250 million luxury hotel and condo project being developed by Vail Resorts. Crews also are working on a new public plaza designed to feature updated skier services and an ice rink.

To combat a drop-off in tourists, Lionshead businesses -- who welcome the long-needed face-lift with open arms -- are offering huge discounts.

It appears to be working.

Destination Resorts Vail -- which manages six of the 12 hotel and condo properties in Lionshead, including the Landmark -- is heavily discounting its midweek rates and taking 15 percent off online bookings.

It has also introduced several new packages this summer, including one that gives kids a toy construction set complete with a hard hat and jackhammer, as well as a "Mystery Package," where frugal travelers can save up to 60 percent by letting the company choose the resort at which they stay.

June revenues were up 32 percent, said Chris Romer, director of sales and marketing for Destination Resorts Vail. Advance reservations are pacing up 26 percent for July compared with last year and up 92 percent for August.

"We're being very aggressive in our marketing and more creative with our packages," he said. "Honestly, we didn't expect to be doing as well as we're doing." Antlers at Vail, also in Lionshead, is offering guests a "satisfaction guarantee" this summer. Anyone unhappy with the construction can leave after their first night without being charged.

So far, no one has taken advantage of the promise, general manager Rob Levine said.

"People may arrive frightened, but most of them leave thrilled," he said. "There are still the great restaurants, the hiking, the golf. Everything that has always gone on in Vail is still happening -- and there is even more going on this summer."

Revenue and occupancy rates at the 94-room hotel, which completed a $22 million renovation in 2002, were up more than 15 percent for June, Levine said.

Advance bookings for July were up 10 percent compared with the same time last year.

Business is also going strong at nearby Lionshead Jewelers, which is offering discounts on its handmade jewelry.

"I tell everybody who comes in that we're having a construction sale -- and they all start looking a lot more seriously," owner Amad Akkad said. "It's helping, but my profits aren't going to be as big this summer." The Montauk Seafood Grill said it is serving roughly 175 people people per night on the weekends -- about the same as last summer.

"People are definitely still coming up here," said Dimitri Souvorin, chef and owner of Montauk. "It really hasn't been much of a problem for us."

Several businesses said they're being upfront with prospective guests about the construction zone. Destination Resorts Vail is posting weekly construction updates and pictures on its website.

"That's the key -- people do not like to be surprised," Levine said. "You have to let them know upfront that something is going on." Cathy and Dave Terbush of Castle Rock, who brought their two children to Lionshead for the first time last weekend, said they weren't aware that the construction was going on before they got there -- but that they weren't bothered by it.

"It's a little noisy, but there is construction everywhere in Colorado during the summer," Cathy Terbush said. "And it sure doesn't look like it's hurting business. It's packed up here."

INCENTIVES TO STAY

Some creative packages Destination Resorts Vail offers this summer:

--Mystery Property Package: Save up to 60 percent by letting Destination Resorts Vail decide at which property you stay.

--Pregnant and Loving It Package: Includes a 50-minute massage for both parents-to-be

--The Home Depot Construction Set Package: Children receive a toy construction kit upon check-in, above

Source: Destination Resorts Vail

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