Shorter Lift Lines This Year??

While Congress is trying to drain what's left in our Treasury, the economy is coming to a screeching halt and I'm sure we will see an impact on the NE ski industry. As an indicator: I went to an annual tent sale in one of the most affluent parts of the US (New Jersey) this past weekend and was suprised by the lack of customers. Last year I had to park across the street due to the crowd. If this is any indication of the lack of spendable cash in the "wealthy families" pockets, this year's ski season will be full of untracked snow, and record bankruptcies in the ski industry.

Of note, Vail Resorts last week reported a 17% decline in pre-season bookings thus far this year and a concurrent sharp decline in season pass sales. On Friday night, though, I was dining with execs from The Canyons, Deer Valley and Alta and brought that subject up. Both stated emphatically that at their resorts they were experiencing pre-season bookings on par with last year.

Of note, Vail Resorts last week reported a 17% decline in pre-season bookings thus far this year and a concurrent sharp decline in season pass sales. On Friday night, though, I was dining with execs from The Canyons, Deer Valley and Alta and brought that subject up. Both stated emphatically that at their resorts they were experiencing pre-season bookings on par with last year.

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Marc, do you think that Utah has more loyal clientele than some of the other destination resorts?

or, do you think that people may be going to Utah instead of the others because of the quality of the skiing and because it happens to be less expensive than Vail Resorts and the like...whose lift tickets are in the $80 range, vs the $60 lift tix of Utah? This adds up with a family vacation.

(consider moving this to the Western Forum...or General Discussion)

Sharon":twmmilzw said:

Marc, do you think that Utah has more loyal clientele than some of the other destination resorts?

or, do you think that people may be going to Utah instead of the others because of the quality of the skiing and because it happens to be less expensive than Vail Resorts and the like...whose lift tickets are in the $80 range, vs the $60 lift tix of Utah? This adds up with a family vacation.

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I'm not sure what the reason is, but I doubt it's the latter. Your average one-ski-week-per-year vacationer just doesn't "get it" from what I've seen. Aside from the Park City areas, we also don't have what your typical Vail Resorts vacationer is looking for, i.e. no ski towns with their boutiques, spas, restaurants, etc.

Sharon":twmmilzw said:

(consider moving this to the Western Forum...or General Discussion)

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Good point. Done.

I think that the Vail and Utah vacationers tend to be more hardcore skiers who will ski even during the toughest of economic conditions. East Coast day trippers tend to be the once or twice a year skiers who will think twice this year before laying out $60 for a lift ticket and $100 for a tank of car. I also have to believe that a good portion of the bookings in Park City are international travelers taking advantage of the FX on the $USD.

Lifty@50":mm6jb31h said:

I think that the Vail and Utah vacationers tend to be more hardcore skiers who will ski even during the toughest of economic conditions.

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That doesn't explain, however, the reported discrepancy in pre-season bookings and pass sales. Both have acknowledged that the weak dollar has spurred international visitation, which gives creedence to your concerns about East Coast business.

I would also guess that I-70 traffic mess may finally be taking some toll on the locals in Colo. The economy is not nearly as bad here as much of the country, so locals should be snapping up Vail passes like usual. So either hesitation to commit the early $$ in uncertain times, or changing tastes for how much hassle people want (Rumor is that Eldora is selling more this year for example).

The fact that the economy in this part of NJ is so resilient, even given that fact that it is one of the most expensive areas in the country, we are now just starting to show the strains of the Wall Street layoffs and loss of paper wealth. I have to believe that if this area is showing the pain, so is every other please in the country. (Save South Dakota where folks are drilling in their back yards.) I can’t imagine this being a good ski season for any area of the country. As I write this the S&P is down 5%.

my wife has been a f/x trader for 20 years .. this is the biggest shit storm she has ever seen... there won't be shorter lift lines.... there will be no lift lines...i was going to book a sugarbush trip for Christmas.. not any more...

Kottke report has a detailed analysis of skier visits by region: http://business.transworld.net/files/20 ... t-0708.pdf

I've compared the total visits (30 years) to my overall snowfall and the correlation is positive but weak at +28%. It's more than that regionally (only 10 years of Kottke data), but Kottke and I define regions differently. Northeast correlation is 54% and Rockies correlation (average of 4 regions for me) is 64%. Pacific is only 25%, but that combines Sierra with PNW, and those 2 regions are almost independent, while the 4 Rockies regions correlate 50+% among each other.

There's barely a mention of the economy in 2007-08 Kottke. This makes sense, because despite lots of alarming headlines over the past year, the actual economic numbers were just sluggish, not actually negative. And since 2007-08 was such a huge season, there was a sharp increase over the previous mediocre one (obvious to you easterners), and a new record high of 60.1 million was set.

So 2008-09 skier visits rate to come down some anyway. As far as the economy is concerned, most recessions over the past 25 years or so have been localized to regions or specific industries. The current alarm is largely due to the fear that this crisis could be much more contagious to the entire economy. Such fears have been historically overblown, but there are some fairly credible voices saying this time is different.

I've been reading up, and I don't think the course of action is that obvious. Not that I trust Congress that much to improve it.

Tony,

Thanks for the link. I've never bothered to try to find/read the detailed/full report before, even though I know the "C" in "RRC Associates" that puts the annual report together for NSAA.

fair warning i've spoken to a friend who lives in manhatten where alot of the people who work on wall st. live. i asked her to be careful when walking the streets of her neighborhood for fear of people jumping out of buildings and landing on you. keep a constant eye to the sky and be ready to move. they got jumpers!!!!!!!!.

I just watched an interesting interview by Jim Creamer with the CEO of Vail Resorts on http://www.thestreet.com. This is a stock (symbol "MTN") that has been a favorite of "short sellers" on Wall Street in the past year (investors and traders who bet that a stock will fall in price). In the last 12 months, the stock has fallen from 65 down to 37 yesterday. The belief on Wall Street is that companies like Vail Resorts that rely heavily on consumer discretionary spending will be hurt if the economy slides into a moderate to severe recession. The CEO of Vail Resorts did confirm that pre-season bookings are about 15% below where they were last year, but he noted that in uncertain economic times, people often wait to book vacations until closer to the time that they would actually leave. He also noted that they have seen a significant upswing in foreign visitors because of the devalued dollar. He noted that the foreign visitors tend to stay longer and spend more money that Americans. Overall, a short but interesting interview. My guess would be that, if we go into a moderate to severe recession, the larger resorts will do OK, but the smaller ones will be hurt more badly, as the more casual skiers will cut back on spending money to ski.

Booking ski vacations late will be the strategy this year. I'm sure that availability will be unlimited and last minute bookings will bring big disclounts. Property owners will feel the pain if they don't have the rental income to cover carrying costs. We may even see discounted lift tickets this year......

It's possible Vail is just being a bit more honest about the situation than other resorts. I've chatted with a friend who works for Steamboat. The official word is that bookings are on par with last year at this point. I find it a little hard to believe. Another good snow season will help keep the numbers up. While a lack luster season could leave many areas hurting as there might not be as many people willing to spend their money if they feel conditions are not excellent.

Another point is that advance bookings and particularly season pass sales are influenced to a mild degree by the quality of the previous season. When people are coming off a great experience (or hearing a lot of positive buzz from others) they are more likely to be interested.

Mammoth MVP sales for 2007-08 slowed considerably in April 2007 due to the weak season then winding down.

This level of financial uncertainly is certainly going to pause bookings in September. The only way I got into Island Lake for 2003 was that the sign-up date was Sept. 17, 2001. Island Lake did get booked up for prime season within a couple of months, but some of the 80+% that normally renew the first day held off with the 9/11 travel uncertainty. If the dust settles and the crisis becomes viewed as transitory, most of the advance ski bookings will resume.

shorter lift lines this year? would be nice. \/
rog

Out here in CO, one reason for the crowds last year was the lousy (for us in the US) dollar exchange rate, which brought the Europeans across the pond by the maze-full.
Usually we can get super-cheap last-minute lodging deals in Jan. and Feb in Vail or Avon, those were very hard to find last year. The bountiful snow contributed to our overall crowding, too.
Our recent mid Sept. storm pasted the peaks with a nice dusting of snow, prompting the Vail maketing guys to send out spams of "we've got SNOW!" which is already long since melted, but may have gotten the bookings going.
The shaky economy, and slightly better exchange rate maybe will put a damper on the crowds, but I sure wouldn't mind skiing another epic season just like the last one.
I got to ski Vail twice last year when the Front-Rangers were trapped on the wrong side of the hill due to Vail Pass closures, and it was still quite busy with the Euro ski-weekers stomping down the back-bowl powder at an astonishing rate.
(Also got diverted one morning from Vail to Snowmass due to a Glenwood Canyon closure, which sucked only because at the end of the season I left one Vail ticket on the table, and had to buy and extra 'Mass ticket- wah.... :-({|= )
Anyhow, I'm not too excited at payin' $4 per gallon to get my SUV the 300 miles RT to Vail this winter- but I'm not planning on leaving any of my 10 Vail/BC ski days unused this year, either.

Advanced booking are a good indicator of the coming season, however, they can also be cancelled with a phone call. Also, let's not forget that the European markets are getting slammed too. Also, if the lift lines are too short, some resorts will just close down for the season instead of bearing the costs of operation. Believe it or not, ski areas are for-profit entities that only care about the bottom line. Even MRG.....

If you look at that Kottke data, you'll see that national skier visits rarely deviate by as much as 10% from the trend of recent years. The exceptions are in unusually bad snow years (PNW in 2004-05 being the most recent example). As in my data, in most years good regions offset bad ones and the national total is smoother. You have to go back to 1980-81 to see a year where bad conditions were so widespread as to put a big dent in the total numbers. I can't see any economic effect in that past data. Not saying it won't be different this time. I will say that the recession will have to be very severe in order to move the skier visit numbers noticeably. I'd say the "normal" number is around 57M. That number might be spun as economic because last year was 60M, but the record high 60M was due to snow. I'd say less than 55M would be a clear sign of economy if snow is average or better.