Is the ski resort model dead?

[Geoff]

Whoa there Geoff!

Where did I state or infer that I am

"resenting those damned rich people".

?!? The only thing I resent is the knee jerk reactions of someone that thinks that they know me based on the information I present –from ski industry sources, mind you– that there are some serious issues in regards to the future of the ski resort industry (by the way, our household income puts us in 46% bracket and I don't resent myself). Read the report and you'll find that many prospective buyers and current owners aren't that excited about the way things have been and the products that they've been offered or have bought. Using your logic, those respondents that feel this way must also resent "those damn rich people," even though many are those "damn rich people..."

As to your assertion that there will be lots of Gen X and Y skiers out there waiting to snatch up more luxury 2nd homes, I disagree. There will be some, certainly, but as the skiing population ages and shrinks –as it has been doing for quite some time– there will be more supply than demand, especially if luxury resort development picks up to its pre-recession levels. As to the loss of new skiers due to economic factors that is only a partial truth. The loss in the younger demographic has been occurring for a long time, even during the boom years of the 90's. It has multiple factors, the foremost being the changing expectations and desires of the younger generations. Skiing has to compete with theme parks, cheap package deals to Caribbean beach resorts and Hawaii and, of all places, Las Vegas. A common complaint among my teenage clients in Vail was that they would rather be someplace warm and hated that their parents dragged them out to ski in Colorado, and they aren't alone in this outlook. With the ease of traveling to warm places where there is no equipment, no cold, no discomfort, and, to those newly on their own, much cheaper
destinations, it's no surprise that skiing among the young is losing its appeal. The fact that the middle class is shrinking (a very worrisome trend on its own) means that there will be even less interest among potential skiers since less people will be able to afford to ski.

As for developers building for the market, I think that it's pretty clear these days that this is not the case currently. If it was, there would not have been a housing bubble and there wouldn't be thousands of new homes sitting empty across the country. Ski resort development is no exception. Developers were building with the hopes of selling to a pretty small niche and they oversupplied the market. This is one reason why Intrawest has been in so much trouble this past year. When they are selling condos in their villages for 30%-40% below their initial prices, even in the mid 2000's (The Village at Solitude being an example), clearly there isn't enough demand. If Tamarack were able to sell, and pre-sell, all of their real estates offerings, they would have probably met their debt obligations and would still be in business.

It's great that you had the opportunity to ski so much growing up and learned to love it (I assume). I did is well but from living in ski towns as a kid, and I would like to see those towns and the residents in them survive into succeeding generations. Want to see what happens when real estate speculative development doesn't work? Ask around McCall Idaho and the owners of Tamarack's properties, the towns of La Veta and Chuchara Colorado, the employees and investors of Ski Rio in New Mexico. If the ski industry goes back to the way things were in the heady days of the 90's and the first 8 years of this decade, we may well... make that certainly, see more of this. I want there to be more younger skiers, I want ski towns to thrive and be healthy communities, not hollow shells with 70% of the homes owned by absentee owners, I want to see all of the things that make skiing such an awesome activity continue. In short, I want the ski industry to succeed and I don't agree that it's success is tied to selling luxury real estate and $50,000 club memberships and that's the bottom line. What do you want?

You can't have it both ways.

The skiing population is shrinking so the housing stock is going to sell for dirt cheap. That allows locals to live in ski towns where they can't earn a living since no skiers show up.

Or the rich people who ski show up and buy up all the housing stock pricing out the locals.

...and you're putting words in my mouth. I wrote that the market determines what happens to housing and that developers will build to their market. Not everybody can buy into Yellowstone Club so not every resort is going to turn into a Yellowstone Club. If a developer builds property and there is no market for it, the price drops until it sells. There's no magic to it. Ski resorts are the same way. I'm in New England. There are dozens of defunct ski areas. They're only viable if enough people show up to make enough profit to operate the mountain. In your idylic locals-only ski area, you don't earn enough revenue to keep the doors open. You need those rich people to prop the business up. Certainly in New England where you can't survive without snowmaking unless you are in a very narrow band of 250"+ natural snowfall microclimate on the spine of Vermont, locals-only ski areas are dead, dead, dead. In the west, the small ski areas with no base villages teeter since most people don't want to go to them. I've written in this thread that I really like Monarch. I have no problem driving 20 minutes up the hill but few of the wealthy people who prop up the major ski resorts want 1000' of vertical, center pole double chairs, and a little retro base lodge. With a couple of consecutive lean snow years, a place like Monarch collapses and changes owners.

 

[Tony Crocker]

My "blanket statements" were based upon simple demographics. I'm assuming people in their 40's and 50's are the main buyers of the vacation real estate. The baby boomers hit the peak of that age range 5 years ago, so in the near term future there are going to be fewer people in that age/income range to buy high-end vacation homes than during the past decade.

With regard to "self described skiers" vs. "skier visits" I consider the latter far more reliable as it's a hard statistic as opposed to what someone tells a survey, also subject to sample error. And obviously skier visits are the what matters directly to ski towns and the ski industry.

The results showed that inmost of the resorts in the study, there was a much stronger correlation between snowfall totals and skier visits than any other factor.

This was my conclusion from Kottke. 1980-81 is the season that really jumps out in that data, and that was second only to 1977 (not included in Kottke) in terms of widespread western drought. You can sometimes see the impact of localized bad snow years in regional data, such as the PNW in 2005. And some of you will recall from an earlier thread that I predicted 2008-09 on the nose based upon a falloff from the outstanding snow year in 2007-08.

The factor I did not consider was international visits. I speculated that they might be growing in the Alps to offset the grim local demographics there. I don't recall whether international is a significantly rising proportion of U.S. skier visits.

I also concede that we don't know for sure where the increasing numbers are coming from. It could be there are lot of super fit 60+ year-olds putting in more days per season, instead of it coming from the younger end as I suggested. If so that would be a temporary trend, surely not sustainable once these people are in their 70's.

 

[Geoff]

I also concede that we don't know for sure where the increasing numbers are coming from. It could be there are lot of super fit 60+ year-olds putting in more days per season, instead of it coming from the younger end as I suggested. If so that would be a temporary trend, surely not sustainable once these people are in their 70's.

Or, more likely, the next wave of retiree 100+ day skiers will show up. I see new ones every season at Killington. With shaped skis and grooming, there are also lots of 70-somethings out there every day.

 

[rfarren]

Skier numbers are the total number of people that identify themselves as skiers (defined as skiers, snowboarders, telemarkers, etc) while skier visits are the number of times each skier goes skiing.

I don't think that is a very strong way of identifying who skis and who doesn't. For example: my wife skis, however, she would not identify herself as a "skier". I know how to swim, and go to the beach ocasionally but I'm not a swimmer. I think by way of definition that study seems flawed from the start.

I would argue that the only metric that should count is skier visits as that is the only number that counts to the bottom line of a ski area.

 

[Tony Crocker]

Rob and I have exactly same opinion about skier visits being the stat that matters.

There was another Kottke graph a few years back that showed skier visits by individual age. That graph was almost flat from the early 20's to the late 40's and declined at a near constant slope after that. That's why I'm highly suspicious that overall skier visit numbers are being pushed up by "the next wave of retiree 100+ day skiers."

This is another subject for the MarcC "look around the office" test. While we all have seen these 60+ and 70+ skiers who rip, the bulk of mainstream recreational skiers start slowing down by the late 40's for women and about a decade after that for men.

 

[Geoff]

This is another subject for the MarcC "look around the office" test. While we all have seen these 60+ and 70+ skiers who rip, the bulk of mainstream recreational skiers start slowing down by the late 40's for women and about a decade after that for men.

I think that for the mass market of occasional skiers, it happens earlier. I know lots of people who skied occasionally in their teens and 20's who hung it up completely by the time they hit 40 or 45.

There are a lot of every-weekend people who pretty much vanish when they get married and pop out a few kids. Their disposable income gets sucked into house, minivan, and kid stuff. Their time gets sucked into structured kid programs that didn't exist when I was growing up. We just went outside and played. If mom wanted to go skiing, she piled all the neighborhood kids into the station wagon and off we went.

 

[berkshireskier]

This is another subject for the MarcC "look around the office" test. While we all have seen these 60+ and 70+ skiers who rip, the bulk of mainstream recreational skiers start slowing down by the late 40's for women and about a decade after that for men.

I think that for the mass market of occasional skiers, it happens earlier. I know lots of people who skied occasionally in their teens and 20's who hung it up completely by the time they hit 40 or 45.

There are a lot of every-weekend people who pretty much vanish when they get married and pop out a few kids. Their disposable income gets sucked into house, minivan, and kid stuff. Their time gets sucked into structured kid programs that didn't exist when I was growing up. We just went outside and played. If mom wanted to go skiing, she piled all the neighborhood kids into the station wagon and off we went.

Very accurate analysis, from what I have seen. From my own personal standpoint, one of the big advantages to waiting to have children (I had my one and only child when I was 40) is that it has allowed me to ski with her almost every weekend for the last 10 or 11 years with an occasional longer ski trip thrown in. I've skied more in my 40's and early 50's than during any other period of my life. It also helps that I live 10 minutes from a decent ski area with extremely cheap season passes. For what's its worth, I have to believe that, as the baby boom generation ages, this changing demographic will not be good for the overall ski and snowsports industry (and would be much worse if not for snowboarders). My prediction is that we will see many smaller, more marginal ski areas eventually die off (unfortunately) and only the larger, better capitalized and run areas survive and profit. I hope I am wrong in this guess.

 

[Tony Crocker]

I think that for the mass market of occasional skiers, it happens earlier. I know lots of people who skied occasionally in their teens and 20's who hung it up completely by the time they hit 40 or 45.

This trend is offset by the continuing skiers in their 40's skiing more days than they did in their 20's. There's often more vacation time and $ available, and their kids are at ages where there may be a family incentive to ski more rather than less. Patrick and I both fit this pattern. Remember Kottke doesn't show a falloff in skier visits by age until nearly 50.

Nonetheless with the average boomer at 55 skier visits from that group rate to be headed down soon if they aren't already. So any increased visits are likely coming from either the younger end or international visits. As Patrick noted early on, U.S. population is still rising. A flat percentage of "skiers" in the population may still lead to increasing skier visits.

 

[BigSpencer]

Great thread.
IMHO there are now a whole lot of people who come from the manmade urban society, along with its money-driven values...who now own most of the gold in this society<--- and that's the key, and who haven't experienced the values of healthy outdoor activity/lifestyle. Just a leisure life of placid entertainment and stimulating(or not so...LOL)sex oriented society. The unspoiled outdoors is something to conquer for more development and profit.


$.01

 

[soulskier]

"As the number of ski areas purchasing renewable energy credits has continued to climb, so has the number of resorts offsetting 100 percent of their electricity needs. To date, 68 resorts are now purchasing green energy for their operations through RECs and 34 of these are offsetting 100 percent of their electricity use with the RECs. These 34 resorts are collectively purchasing 343,459,000 kilowatt hours of green energy, resulting in the avoidance of 497,270,000 pounds of carbon dioxide," Dorsey said at an NSAA regional meeting.

http://www.onthesnow.com/news/a/13666/r ... roomNotice

 

[EMSC]

"As the number of ski areas purchasing renewable energy credits has continued to climb, so has the number of resorts offsetting 100 percent of their electricity needs. To date, 68 resorts are now purchasing green energy for their operations through RECs and 34 of these are offsetting 100 percent of their electricity use with the RECs. These 34 resorts are collectively purchasing 343,459,000 kilowatt hours of green energy, resulting in the avoidance of 497,270,000 pounds of carbon dioxide," Dorsey said at an NSAA regional meeting.

http://www.onthesnow.com/news/a/13666/r ... roomNotice

Two notes that come to mid right away:
1) REC's are mostly good marketing material since the majority of projects that 'issue' the credits would have been done anyway. Not much real new net impact on energy production is actually gained by REC's based on numerous studies. A very ill defined and murky industry that sell REC's.

2) Take note that the biggest, best funded players in the ski industry think REC's are better than siting renewable's on-site in their remote mtn resorts. That should speak volumes about your desires for renewable energy as a part of your project IMO. Not as easy as you might wish.

 

[Geoff]

"As the number of ski areas purchasing renewable energy credits has continued to climb, so has the number of resorts offsetting 100 percent of their electricity needs. To date, 68 resorts are now purchasing green energy for their operations through RECs and 34 of these are offsetting 100 percent of their electricity use with the RECs. These 34 resorts are collectively purchasing 343,459,000 kilowatt hours of green energy, resulting in the avoidance of 497,270,000 pounds of carbon dioxide," Dorsey said at an NSAA regional meeting.

http://www.onthesnow.com/news/a/13666/r ... roomNotice

Two notes that come to mid right away:
1) REC's are mostly good marketing material since the majority of projects that 'issue' the credits would have been done anyway. Not much real new net impact on energy production is actually gained by REC's based on numerous studies. A very ill defined and murky industry that sell REC's.

2) Take note that the biggest, best funded players in the ski industry think REC's are better than siting renewable's on-site in their remote mtn resorts. That should speak volumes about your desires for renewable energy as a part of your project IMO. Not as easy as you might wish.

Talk about feel-good marketing babble. The electricity still comes from coal-belching electric plants. The resorts do it because it doesn't cost anything to do it. Skiing is one of the least environmentally friendly recreational activities in the known universe. Virtually anyone who participates in the activity drives many hours to get to the ski area or flies in an airplane 1000+ miles. Per participant per day, it has one of the worst carbon footprints known to man. I guess deep sea fishing is worse but it's tough to come up with many activities that have a worse carbon footprint.

 

[soulskier]

2) Take note that the biggest, best funded players in the ski industry think REC's are better than siting renewable's on-site in their remote mtn resorts. That should speak volumes about your desires for renewable energy as a part of your project IMO. Not as easy as you might wish.

So noted. And I agree that it doesn't make economic sense for a large scale resort, with big energy demands, to convert to clean energy. The model we are advocating is all about low energy demands, ie minimal lifts and no snowmaking, combined with clean energy creation.

 

[soulskier]

Talk about feel-good marketing babble. The electricity still comes from coal-belching electric plants. The resorts do it because it doesn't cost anything to do it. Skiing is one of the least environmentally friendly recreational activities in the known universe. Virtually anyone who participates in the activity drives many hours to get to the ski area or flies in an airplane 1000+ miles. Per participant per day, it has one of the worst carbon footprints known to man. I guess deep sea fishing is worse but it's tough to come up with many activities that have a worse carbon footprint.

All the more reason to incorporate green technologies into the model.

 

[rfarren]

So noted. And I agree that it doesn't make economic sense for a large scale resort, with big energy demands, to convert to clean energy. The model we are advocating is all about low energy demands, ie minimal lifts and no snowmaking, combined with clean energy creation.

A big mountain will have large energy use regardless of the amount of infrastructure you imagine you will need. I imagine you will need quite a bit of energy production to supply even minimal lifts for a mountain with vert around 3000 ft. I see this model working better with a smaller mountain. That being said, energy creation is quite an expensive proposition. Again, the capital cost and infrastructure installation will be quite expensive. This only makes sense with heavy subsidization.

 

[Geoff]

Talk about feel-good marketing babble. The electricity still comes from coal-belching electric plants. The resorts do it because it doesn't cost anything to do it. Skiing is one of the least environmentally friendly recreational activities in the known universe. Virtually anyone who participates in the activity drives many hours to get to the ski area or flies in an airplane 1000+ miles. Per participant per day, it has one of the worst carbon footprints known to man. I guess deep sea fishing is worse but it's tough to come up with many activities that have a worse carbon footprint.

All the more reason to incorporate green technologies into the model.

I gotta throw the crock o' shit flag on this one. The only way to make skiing green is if everybody shows up to the mountain using public transportation. Nobody is going to install public transportation to access ski areas since ski areas are in low population density areas where it doesn't work.

Let me cite an example since I happen to know the numbers. At Killington, the big energy hit is making snow using diesel air compressors. It dwarfs heating base lodges or running lifts. Killington is permitted to burn a million gallons of diesel fuel and they don't come close to that number. Their customer base is mostly metro-NYC weekenders. If you assume 400 miles round trip, 2-day weekends, a 20 mpg car, and 4 people per car. That's 2 1/2 gallons of gasoline per person per skier visit. Killington does 650,000 skier visits. That gives you 1.6 million gallons of gasoline burned to go skiing at Killington. A destination ski area in the Rockies is far worse since most of the visitors arrive by commercial aircraft. I don't care how many windmills you install. You're not going to do anything to offset the horrific carbon footprint of skiers driving and flying to ski areas.

 

[rsmith]

Skiing is simply one of many, many activities that have a large carbon footprint - it's arguably nowhere even close to the worst in terms of total impact. Take Hawaii - there are somewhere around 60 million annual visitor days based on 7 million+ arrivals. So just one beach destination is equivalent to nearly the entire U.S. ski market, in terms of days spent. Trust me, no one is using public transport to get there. Same with the Disney resorts - their Florida visitation numbers alone are nearly 45 million, again nearly the same as all U.S. ski days total. In relation to the overall destination entertainment market, skiing is a niche. It does seem likely that the transportation-related carbon hit for a ski resort (or a Disney resort) far outweigh the carbon hit the resort operation entails, so I would argue that skiing is in the same category as any other plain-old family vacation.

The fact is that nearly everything we do is pretty harmful to the environment. Everything a resort does to minimize (or offset) their impact is a positive, but until we figure out ways to travel with minimal emissions we're really not affecting much in terms of carbon.

 

[Geoff]

I didn't realize that Hawaii and Disney were sports. You forgot "commuting to work" if you're going to distract us from the point here which is that skiing is laughably not green. Renewable energy credits and a few windmills may be feel-good and something for the marketing folks to brag about but it's nonsense to take a toke on the spliff and write a manifesto for low carbon footprint skiing.

 

[berkshireskier]

I didn't realize that Hawaii and Disney were sports. You forgot "commuting to work" if you're going to distract us from the point here which is that skiing is laughably not green. Renewable energy credits and a few windmills may be feel-good and something for the marketing folks to brag about but it's nonsense to take a toke on the spliff and write a manifesto for low carbon footprint skiing.

Good point. The unfortunate reality is that if we want to live in a "modern" society where we drive cars to work and to get places fast, fly on jet aircraft for business trips, vacations, or to visit family or friends, live in houses where we simply turn up or turn down the themostat to heat or cool our living spaces fast, we're going to be emitting pollutants into the air. Unfortunately, economic growth and our standard of living are directly tied to the use of the cheapest energy sources which can also be the most polluting. I don't want to re-ignite the debate over whether these manmade pollutants are causing "global warming" or climate change, but putting up a few wind turbines or putting some solar panels on rooftops are going to have an extremely marginal impact on the amount of polluntants going into the atmosphere on a world-wide basis. I've always believed that, as a society, we should be focused improving the efficiency of how we generate and save electricity and energy and improving pollution control systems for automobiles, planes and electrical generating plants (which we are already doing - I now drive a Honda Civic Hybrid that gets 45 to 50 MGP and qualifies as a partial zero emission vehicle). Let's build more nuclear power plants, convert existing coal fired plants to burning natural gas, improve the efficiency of automobile and truck engines, make more fuel efficient jet engines, improve the catalytic converters on internal combustion engines, etc. All of this will cost money, but, IMHO, will be more cost effective than thinking we're going to power up our society with a few wind turbines at ski areas. If we want to live in a modern society (and the rest of the developed and undeveloped world is trying to catch up to us), we're going to be using energy and putting pollutants into the air.

 

[rfarren]

Good point. The unfortunate reality is that if we want to live in a "modern" society where we drive cars to work and to get places fast, fly on jet aircraft for business trips, vacations, or to visit family or friends, live in houses where we simply turn up or turn down the themostat to heat or cool our living spaces fast, we're going to be emitting pollutants into the air. Unfortunately, economic growth and our standard of living are directly tied to the use of the cheapest energy sources which can also be the most polluting. I don't want to re-ignite the debate over whether these manmade pollutants are causing "global warming" or climate change, but putting up a few wind turbines or putting some solar panels on rooftops are going to have an extremely marginal impact on the amount of polluntants going into the atmosphere on a world-wide basis. I've always believed that, as a society, we should be focused improving the efficiency of how we generate and save electricity and energy and improving pollution control systems for automobiles, planes and electrical generating plants (which we are already doing - I now drive a Honda Civic Hybrid that gets 45 to 50 MGP and qualifies as a partial zero emission vehicle). Let's build more nuclear power plants, convert existing coal fired plants to burning natural gas, improve the efficiency of automobile and truck engines, make more fuel efficient jet engines, improve the catalytic converters on internal combustion engines, etc. All of this will cost money, but, IMHO, will be more cost effective than thinking we're going to power up our society with a few wind turbines at ski areas. If we want to live in a modern society (and the rest of the developed and undeveloped world is trying to catch up to us), we're going to be using energy and putting pollutants into the air.

I agree with this sentiment. Efficiency is imho opinion is a no brainer.
On a side note, if any of you have read superfreakonomics, it has a chapter dedicated to Global warming. It argues that, if indeed, global warming is as bad as prophesied, that the simplest/cheapest way to deal with it would be to tweak the environment by releasing sulphur dioxide high into the atmosphere, in effect imitating a large volcanic eruption. It also gave other means that were inexpensive to work alter the environment, but that were cheap and easy to control. It sounds crazy, but hey, if the sky is falling down....