January 23, 2009 / 1:19 AM / 9 years ago

If it snows, they will come, ski resorts find

MOUNT SNOW, Vt (Reuters) - Lost jobs, bankruptcies and home foreclosures have forced Americans to cut their spending, but one luxury sector is more interested in weather forecasts than economic forecasts -- the ski business.

<p>Skiers ride the chair lift at Park City Resort during the Sundance Film Festival in Park City, Utah January 17, 2009. REUTERS/Lucas Jackson</p>

“People who love to ski will find a way to ski,” said Dennis Butchko, a retired teacher who volunteers as a resort “ambassador” at Mount Snow in Vermont, offering advice and safety tips to skiers in return for a season pass.

While major resorts in Colorado such as Vail and Aspen have seen a drop in visitors, Mount Snow and other resorts in the U.S. East say they are benefiting from a rise in skiers who might normally fly west but chose to drive to nearby resorts instead.

Resort manager Kelly Pawlak said Mount Snow has seen a more than 10 percent jump in season pass sales this year, and while Christmas was a little slow, January 2, which fell on a Friday and enjoyed great snow, was the busiest day since 2004.

“Good snow really does trump a down economy,” said Parker Riehle, president of the Vermont Ski Areas Association, whose 20 resorts have mostly seen business grow this year.

Riehle was among dozens of central and eastern resort managers and officials attending a trade fair and conference of the National Ski Areas Association at Mount Snow this month, where a mood of cautious optimism reigned, despite a recession.

NSAA president Michael Berry said three seasons ago, “the economy was just humming, people had money, but it was a difficult weather year and we were off 10 to 12 percent.”

Berry said there had been a redistribution of the market, with drive-to weekend resorts faring better than spots in the West such as Vail and Aspen, both in Colorado, which rely more on visitors who fly long-distance and stay for a week or more.

Vail Resorts Inc., which operates five ski resorts including Vail, Breckenridge and Beaver Creek in Colorado, said on January 9 that skier visits so far this season were down 5.8 percent, with lift ticket revenue down 7.5 percent.

“The current economic environment has certainly impacted the beginning of the 2008/2009 ski season,” said Vail CEO Rob Katz, adding that visitors were also cutting back on pricey extras such as ski school and high-end dining and retail. Ski school revenues fell around 20 percent on the previous year.

“Given the economy, given the very unprecedented challenges that are out there, we were pleased with the results to date,” Katz said, adding that bookings had improved since December.

Aspen Skiing Co. reported a similar fall in visitors, down 8 percent in the two weeks over Christmas and New Year.

“January is stronger than December and we are down less than 5 percent for the month at this point,” Aspen spokesman Jeff Hanle said. “We will continue to put offers and promotions in the marketplace to encourage last-minute bookings and to position ourselves for when things improve.”

BOOK LATE, DRIVE

Jim Church, 63, who works as a ski instructor in Park City, Utah, a major destination in the West, said he had noticed the slopes were less full.

<p>A skier heads down the mountain inside of Park City Resort in Park City, Utah January 21, 2009. REUTERS/Lucas Jackson</p>

“I‘m instructing less than half what I did last year,” he said. “There’s definitely a downturn and friends of ours that have properties to rent here aren’t renting them, where in the past they have always been pretty much rented for the season.”

Berry of the NSAA said many resorts were offering attractive packages to entice skiers, such as a free night of lodging or meal or spa vouchers. Most resorts have seen a trend toward late bookings as skiers wait to see what the weather is like before committing themselves to spending money.

Jim Horsman, managing director of Stowe Mountain Lodge, a new luxury hotel that opened in June in northern Vermont, said opening during a recession was never ideal but the business was helped by its location, within driving distance of major cities such as Boston, Montreal and New York, and by lower gas prices.

“We may be in a perfect spot during a perfect storm,” he said, adding that many skiers who would normally travel to the U.S. West were staying closer to home.

The downturn has had an impact on staff in the industry nationwide, which contributes around $10 billion to $11 billion to the economy and employs 40,000-50,000 people at the height of the season, according to the NSAA.

Slideshow (2 Images)

Vail, the only publicly-listed ski operator, has cut its contributions to employee retirement funds and eliminated executive pay rises.

With unemployment rising all over the country, it’s an employer’s market at ski resorts in the East as well as the West.

Cindy Derolf, human resources manager at Jack Frost Mountain in Pennsylvania, said she had more than enough well-qualified staff, and Pawlak said Mount Snow has even slightly raised its staff numbers.

“Because unemployment is higher, we’re able to fill all the spots. Most years we can’t fill all the spots,” Pawlak said.

Jennifer Rowan, publisher of Ski Area Management (SAM) magazine, said the recession had hit real estate sales.

“Even if you have the money to buy a second home, people are just toeing the line, even if only for appearances,” she said. “If you’re laying off people, it doesn’t look good to be buying a condo in Killington,” she said. Killington is a ski area in Vermont.

Byron Carlock, president and CEO of CNL Lifestyle Properties, a $2.5 billion real estate investment trust that has 13 ski resorts, said CNL sees some opportunities now.

The credit crunch means capital has dried up, leaving those with cash in a good position to pick up bargains, he said.

In December, CNL bought three resorts -- Okemo in Vermont, Crested Butte in Colorado and Mount Sunapee in New Hampshire -- with 1.2 million combined visitors, in a deal in whereby it will lease back the resorts to the operators.

Carlock said CNL has a long-term investment strategy, unlike condo developers who tend to buy and flip, and CNL has seen its ski resorts, making up nearly one third of its portfolio, holding revenues firm despite the recession.

“It seems people are choosing to pursue their passions,” Carlock said.

Reporting by Claudia Parsons; Additional reporting by Michelle Nichols in Park City, Utah; Editing by Eddie Evans

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