Is the ski resort model dead?

[EMSC]

Interesting financing and thought process by Mt Abram. He's financing for 40 years on a product that typically has a 25 year life -or at least by then the production of solar panels has dropped off significantly. Either way the economics is ruined. I also liked the brief mention of the 141 condo's approved for construction. So perhaps not quite as green of a ski area as touted.

My $48,000 solar panels produce 10,000 kWh per year, so the $4.2 million producing 733,000 kWh a year in a worse climate is in the ballpark. However, 733,000 kWh a year at 11 cents is $80,630, not a great return ~2% on a $4.2 million investment. So I hope Mt. Abrams has a sweetheart deal on that 40 year loan.

Those taxpayer subsidies are nice aren't they. Without them solar is very, very niche. Even the very best designed industrial scale solar is at a minimum 17-18cents per KWH right now and usually much higher (which is down significantly from the past, but still nowhere near coal, gas, etc...).

 

[Tony Crocker]

a product that typically has a 25 year life

Mine are warrantied to produce at least 95% of initial capacity for 25 years.

Those taxpayer subsidies are nice aren't they.

Yes, after the utility rebate and federal tax credit I paid $17,000 out of pocket. It's hard to get a precise fix on the energy savings. Glendale's city-owned utility has 2 tiers at 10 cents and 20 cents. There are also taxes and the breakpoint between the tiers varies seasonally. My best guess is that I'm saving about 18 cents per kWh of solar production. The highest tier for private utility customers in California can be 33 cents or more, though the construction rebates are also smaller for those customers. I suspect admin and EMSC find these numbers mind-boggling. I'm fairly sure consumer utility prices in mountain and midwestern states are well under 10 cents per kWh.

Even the very best designed industrial scale solar is at a minimum 17-18cents per KWH right now

Wind can be quite a bit cheaper than that, which is why I make that suggestion for Mammoth.

I think EMSC, rfarren and I are all on the same page here. It's going to be enough of a challenge to buy a ski area and operate it on many MRA guidelines. The energy production angle is not likely to pencil out without a lucky location and/or lavish subsidies. I believe the Mt. Abrams cost vs. solar production illustrates this point well.

Definitely add Mt. Bohemia to the list of areas soulskier should study.

 

[Harvey]

...Mt Bohemia (and pics)

Sweet looking hill!

 

[Mike Bernstein]

I think it easy to say that we are going to be waiting a while and what analyst predict. History often tells a different story. In 80,92, and 99 many analysts predicted that those recessions would take 10 years from which to recover. I don't know how realistic an appraisal can be when speaking about a recession while in it. Emotion plays a large part in how the public reacts to a recession and spending habits, if they begin to feel better, based on even modest gains in employment a recovery could rapidly pick up speed. As of now, the news has been less than great economically. Yet, if history can teach us anything, it would foolhardy to imply that we will be economically stagnant two years from now. Therefore, I think a more realistic approach would be to say, that the resort model has taken a hit for the time being, but as the economy recovers so too will the resort model.

I haven't read through to the end of this thread yet, but this post bears responding to. You pointed out the recessions in 1980, 1990-ish, and 1999. The problem with those examples is that only one of them was the result of a real-estate bubble - the 1990-ish one. 1980 was a functioning of rapid inflation in energy prices and lousy monetary policy while 1999 resulted from the bursting of the tech bubble. In the recession that started in 1989, you did in fact see price decreases in ski resort real estate that lasted for a decade or more. I know prices at Sugarbush didn't recover until the 2000s and many places in California saw big hits, though not lasting as long. Even still, that bubble was a small fry as compared the the one that popped more recently. It will take a lot long to unwind the imbalances that drove the run up in prices in the late 2000s, especially since the demographic trends that previously helped to drive the market will now act as a headwind (no new boomers to buy second homes anymore).

 

[Mike Bernstein]

I would think that Fortress has to be on the list to consider. High-elevation. Good snow. Close access to burgeoning Calgary off the Trans-Canada Hwy.

Given the stated criteria, you're really looking at a small geographic area. Basically the Sierras (June? Terrain probably not good enough but sickter slackcountry), the Cascades (but what small areas have the elevation and terrain there?), Idaho/Montana (several possibilities in the latter state) and interior BC/Alberta. Snow in South America seems to unreliable and NZ/Aus are too far away from the majority of the skiing population to really work.

I don't know of any small areas in CO or UT that would fit the bill. Too bad the lifts got taken down at Berthoud Pass - that would have been a natural.

 

[soulskier]

I don't know of any small areas in CO or UT that would fit the bill. Too bad the lifts got taken down at Berthoud Pass - that would have been a natural.

A Co-op was being formed to purchase Berthoud about 10 years ago when the Forest Service dismantled the lifts.

 

[longshanks]

I would think that Fortress has to be on the list to consider. High-elevation. Good snow. Close access to burgeoning Calgary off the Trans-Canada Hwy.

The Word last month was that Fortress already has a new owner....http://www.firsttracksonline.com/Ne...-Mountain-Hopes-to-Revive-Dormant-Ski-Resort/

 

[Admin]

I would think that Fortress has to be on the list to consider. High-elevation. Good snow. Close access to burgeoning Calgary off the Trans-Canada Hwy.

The Word last month was that Fortress already has a new owner....http://www.firsttracksonline.com/Ne...-Mountain-Hopes-to-Revive-Dormant-Ski-Resort/

That's a fact. After publishing that article last month based on info from other sources I was contacted by Joey O'Brien, the new owner.

 

[soulskier]

A little more on the Mammoth fantasy area.

Seems like solar, wind, hydro and likely thermal could all be utilized at Mammoth Mountain. It would be interesting to put the 4 options side by side and evaluate the pros and cons of each and which one has the best return on investment.

 

[Geoff]

Sorry, but this thread is total nonsense. 50 years of evidence shows that the non-resort ski model is dead. You don't have to go farther than here: http://www.nelsap.org/

For eastern skiing, the market demands snowmaking, fast lifts with no lift lines, and safe, groomed trails. You can no longer string up a lift on the back 40 and expect to make a go of it. Insurance chews you alive. Property taxes chew you alive. Employment costs chew you alive. You need to do the volume and charge appropriately to fund the snowmaking budget and all the fixed costs. Ignoring Mad River which only exists because Betsy Pratt gave it to the co-op for far less than market value, non-resort ski areas have either vanished or do the Magic Mountain teeter in and out of bankruptcy.

In the west, there are still places that are non-resort and they teeter on the brink. I really like Monarch. Center pole double chairs with one quad chair for the Texans. Nice friendly little retro base lodge. No lodging at the base of the hill. Great skiing surface since there is so little traffic. The vast majority of Colorado skier visits don't go to places like that. They drive up I-70 and ski the Vail empire.

 

[rfarren]

Sorry, but this thread is total nonsense. 50 years of evidence shows that the non-resort ski model is dead. You don't have to go farther than here: http://www.nelsap.org/

For eastern skiing, the market demands snowmaking, fast lifts with no lift lines, and safe, groomed trails. You can no longer string up a lift on the back 40 and expect to make a go of it. Insurance chews you alive. Property taxes chew you alive. Employment costs chew you alive. You need to do the volume and charge appropriately to fund the snowmaking budget and all the fixed costs. Ignoring Mad River which only exists because Betsy Pratt gave it to the co-op for far less than market value, non-resort ski areas have either vanished or do the Magic Mountain teeter in and out of bankruptcy.

In the west, there are still places that are non-resort and they teeter on the brink. I really like Monarch. Center pole double chairs with one quad chair for the Texans. Nice friendly little retro base lodge. No lodging at the base of the hill. Great skiing surface since there is so little traffic. The vast majority of Colorado skier visits don't go to places like that. They drive up I-70 and ski the Vail empire.

Geoff, IMHO is correct.

 

[EMSC]

Sorry, but this thread is total nonsense. 50 years of evidence shows that the non-resort ski model is dead.

In the west, there are still places that are non-resort and they teeter on the brink.

A surprising amount of them actually considering your first statement. Given the first statement how would you explain Silverton which didn't exist until the past decade or so? Not a hugely profitable place, but they follow much of the proposed MRA model. Recall that Soulskier is not looking to ever have

The vast majority of Colorado skier visits

.

I do agree with you that it'd be very, very hard to do the proposed MRA model anywhere in the east (except maybe the chic chocs or something where snowmaking would be needed less?).

 

[Patrick]

Sorry, but this thread is total nonsense. 50 years of evidence shows that the non-resort ski model is dead. You don't have to go farther than here: http://www.nelsap.org/.

Maybe from your vantage point in McSkiing central. Every towns had their ropetows in the 50s (at least in the Laurentians), so there was a considation of the skiing business with the newer model stuff in the 70s. The ski resort model became the thing, but after 20-30 years of it, what have they learned? Sure they were able to take skiers away from the smaller places or the less 'improved' areas? But they did at a cost and some of them lost their shirts going it. The resort model goes carry a enormous costs which is eventually transfered to the customer. Bringing skiing back to the essentials is coming back. Not saying everyone is going to go that way, but I see the ski areas industry going the way the ski sport has done. From the mecanised liftserved skiing on artificial snow groomed trails to a more back to nature skiing where snowmaking, facilities and lifts aren't necessarily as essential. Telemark was dead for how many years before coming back? Prior to that, Cross-country skiing got a rebirth after being virtually being dead once the lifts started showing up.

Ignoring Mad River which only exists because Betsy Pratt gave it to the co-op for far less than market value, non-resort ski areas have either vanished or do the Magic Mountain teeter in and out of bankruptcy.

What was the market value for the place? Not saying that the industry is going the MRG way, no one implied it, but the Ski Resort Model à la Intrawest, ASC, etc which everyone said was the only way to run a ski area was discovered not to be so perfect after all. There is more room for places that are looking at getting back to basics like what soulskier is talking about and what MRG is trying to do.

The vast majority of Colorado skier visits don't go to places like that. They drive up I-70 and ski the Vail empire.

The vast majority doesn't like to ski powder and only ski the equivalent one week a year. Again, no one implied that the MRA way was the way to go, but I believe there is a demand for it for a certain minority in which aren't served by the ski resort model.

 

[Tony Crocker]

Geoff's opinion makes sense in the East as snowmaking has become a near requirement for viability. Snowmaking requires more capital cost for installation plus up front expenditures each season before more of the revenue comes in. So you need volume or high margin business to bring in enough revenue. There's a reason all these little eastern areas Patrick and Geoff mention have folded. Most of the skiing public demands December skiing, and they aren't going to get that much of it in the East without snowmaking.

So I'll give soulskier credit for one aspect of his search. He has to find an area that can get by for a viable 3+ month season with no snowmaking.

 

[Geoff]

Sorry, but this thread is total nonsense. 50 years of evidence shows that the non-resort ski model is dead.

In the west, there are still places that are non-resort and they teeter on the brink.

A surprising amount of them actually considering your first statement. Given the first statement how would you explain Silverton which didn't exist until the past decade or so? Not a hugely profitable place, but they follow much of the proposed MRA model. Recall that Soulskier is not looking to ever have

The vast majority of Colorado skier visits

.

I do agree with you that it'd be very, very hard to do the proposed MRA model anywhere in the east (except maybe the chic chocs or something where snowmaking would be needed less?).

I explain Silverton the same way I explain cat skiing and heli-skiing operations. It's a boutique business catering mostly to the very affluent. Most people aren't going to shell out $139.00/day for a guided day at Silverton where it's limited to 80 people per day. That doesn't exactly fit into the granola and soup-stained beard "affordable skiing" profile of the Mountain Rider's Alliance. Silverton during the peak ski season is an elitist business.

I'm a big fan of non-resort skiing. The skiing surface is better. When I'm picking places for my ski vacations, they're typically pretty off the beaten track. Recent examples: Monarch. Wolf Creek. Ski Santa Fe. No glitzy base village. Good skiing. Mellow vibe.

 

[rfarren]

The vast majority of Colorado skier visits don't go to places like that. They drive up I-70 and ski the Vail empire.

The vast majority doesn't like to ski powder and only ski the equivalent one week a year. Again, no one implied that the MRA way was the way to go, but I believe there is a demand for it for a certain minority in which aren't served by the ski resort model.

In colorado more people ski vail because it gets considerably more snow, and has considerably more terrain. All my friends that live in denver go up every week, and get somewhere in the 40 to 50 days a year. I think your statement isn't grounded in reality as to why the vast majority of Colorado skier visits go to Vail. It also helps that a season pass there is around $699 for all those resorts. There's a ton of value in that.

[ Every towns had their ropetows in the 50s (at least in the Laurentians), so there was a considation of the skiing business with the newer model stuff in the 70s. The ski resort model became the thing, but after 20-30 years of it, what have they learned?

If it didn't make economic sense it wouldn't have become "the thing." Again, I don't think you're grounded in reality. It's one thing to have mom and pops ropetows, but when people want to ski a mountain and not a hill, that just won't suffice. If I had a cheap molehill and a big mountain to choose from and a season pass were at stake, which one would I choose?... And that's from the local perspective. Now, put yourself in a vacationers shoes... nuf said.

Bringing skiing back to the essentials is coming back. Not saying everyone is going to go that way, but I see the ski areas industry going the way the ski sport has done. From the mecanised liftserved skiing on artificial snow groomed trails to a more back to nature skiing where snowmaking, facilities and lifts aren't necessarily as essential. Telemark was dead for how many years before coming back? Prior to that, Cross-country skiing got a rebirth after being virtually being dead once the lifts started showing up.

Snowmaking in the east coast is essential for 99.9% of the paying public. If you like ski seasons where the good terrain can open in january and can be closed by the first week of april... well, let's put it this way, you'll be traveling far and long to keep your streak going.

 

[longshanks]

...Tonight I stumbled across an excellent article in Canadian Business about the rise and fall of the ski resort model based on real estate development, and in particular its execution at Whistler Blackcomb:

http://www.canadianbusiness.com/managin ... 020&page=1

I really think that the author, Michael McCullough, nailed it.

And speaking of Whistler...widely reported accross the Dominion of Canada today: Whistler Blackcomb to raise $300 million in IPO
Read more: http://www.montrealgazette.com/business ... story.html

 

[Admin]

And speaking of Whistler...widely reported accross the Dominion of Canada today: Whistler Blackcomb to raise $300 million in IPO
Read more: http://www.montrealgazette.com/business ... story.html

Which we accurately predicted here over a week ago:
http://www.firsttracksonline.com/News/2 ... rt-Public/

 

[EMSC]

And speaking of Whistler...widely reported accross the Dominion of Canada today: Whistler Blackcomb to raise $300 million in IPO
Read more: http://www.montrealgazette.com/business ... story.html

Which we accurately predicted here over a week ago:
http://www.firsttracksonline.com/News/2 ... rt-Public/

Which interestingly will require them to open their books for the last several years. That should be interesting! (well OK, for me anyway :lol: ). I'm sure Vail Inc will be looking intently at them as well.

The vast majority of Colorado skier visits don't go to places like that. They drive up I-70 and ski the Vail empire.

The vast majority doesn't like to ski powder and only ski the equivalent one week a year. Again, no one implied that the MRA way was the way to go, but I believe there is a demand for it for a certain minority in which aren't served by the ski resort model.

In colorado more people ski vail because it gets considerably more snow, and has considerably more terrain. All my friends that live in denver go up every week, and get somewhere in the 40 to 50 days a year. I think your statement isn't grounded in reality as to why the vast majority of Colorado skier visits go to Vail. It also helps that a season pass there is around $699 for all those resorts. There's a ton of value in that.

Be careful. Breck has had more skier visits than Vail for many of the most recent years (including 09-10 - barely). Either way both are behemoth resort business model places.

I explain Silverton the same way I explain cat skiing and heli-skiing operations. It's a boutique business catering mostly to the very affluent. Most people aren't going to shell out $139.00/day for a guided day at Silverton where it's limited to 80 people per day. That doesn't exactly fit into the granola and soup-stained beard "affordable skiing" profile of the Mountain Rider's Alliance. Silverton during the peak ski season is an elitist business.

I generally agree (and still might go this year). Which is one reason why everyone is so interested in how MRA can claim to do roughly the same thing, but for cheap... and also add in expensive renewable energy.

 

[Geoff]

In colorado more people ski vail because it gets considerably more snow, and has considerably more terrain. All my friends that live in denver go up every week, and get somewhere in the 40 to 50 days a year. I think your statement isn't grounded in reality as to why the vast majority of Colorado skier visits go to Vail. It also helps that a season pass there is around $699 for all those resorts. There's a ton of value in that.

Be careful. Breck has had more skier visits than Vail for many of the most recent years (including 09-10 - barely). Either way both are behemoth resort business model places.

Vail owns Breck and you can ski there on the same season pass. (and of course ESMC knows that) I used "I-70 Vail Empire". rfarren may have just shortened it to Vail. Either way, it doesn't matter. It's I-70 resort skiing.

I explain Silverton the same way I explain cat skiing and heli-skiing operations. It's a boutique business catering mostly to the very affluent. Most people aren't going to shell out $139.00/day for a guided day at Silverton where it's limited to 80 people per day. That doesn't exactly fit into the granola and soup-stained beard "affordable skiing" profile of the Mountain Rider's Alliance. Silverton during the peak ski season is an elitist business.

I generally agree (and still might go this year). Which is one reason why everyone is so interested in how MRA can claim to do roughly the same thing, but for cheap... and also add in expensive renewable energy.

I explain it by the relaxation of marajuana laws in the US. There's feel-good "Renewable Energy Credits" that ski resorts purchase to pretend they are green while burning upwards of a million gallons of diesel fuel running snowmaking compressors and the grooming fleet (at least, that is what Killington's permit for diesel reads). All those granola eaters drive their ratty pickup trucks to the ski hill. Skiing is just about the least environmentally friendly sport in the world. A windmill isn't economically viable if it's out in the middle of nowhere at a remote ski hill and can't sell power back into the grid.

Relative to cat skiing and heli-skiing, Silverton is a bargain. I don't think I have the skill level to use the place but I'd love to have something like that with a little less pitch where I could be one of the elite 80 shelling out $139.00 per day for a couple of weeks of skiing endless untracked. I guess I'll have to become rich and buy into Yellowstone Club instead. For now, Chile is my cheap alternative to get lots of untracked with little competition.