Presidential Byline
For the past year and a half you have been hearing me expound on some of the problems that face our industry and in too few instances I have been able to outline possible solutions. Whenever I visit with area operators, I am always impressed with their perspicacity regarding the scope and variety of issues affecting our business. Like me, most of you are more keenly aware of problems than solutions. However, I think the NSAA needs a forum through which we can focus the brain-power of the membership in a mutual self-help endeavor. I am therefore soliciting some very active input for your NSAA Newsletter. We want to hear from you regarding priorities, concerns, recommendations, etc.
At a recent meeting with a California State agency, Mr. Nick Badami, Alpine Meadows (Calif.) board chairman, articulated some of the type of concern that I have referred to. Nick has been kind enough to provide a synopsis to serve as a kick-off for this proposed undertaking. His comments are as follows:
“I know that it is unpopular at the moment for a ski area operator to complain of economic hardship, as the popular impression is that we are all coming off of a “Banner Year”. However, I think at this time it is proper that we as an industry take a hard look at where we are going and evaluate our economic status in relation to other industries’ activities.
“We only have to take a look at other capital-intensive industries to find severe problems on our horizon. The steel business for one is suffering from antiquated, inefficient production equipment. In their case, this ONLY puts them out of competition. In our case, when equipment gets old or becomes decrepit, it must be brought up to standard for safety reasons by either replacement or costly overhaul. Also in our case, being primarily on public lands, we must continue to expand our capacity to give the public a proper ski experience or risk the wrath of public complaint because of inadequate service.
“Therein is our problem. We have just come off a very profitable year. But was it profitable? Compared to prices of replacement of our equipment, was it profitable? Compared to prices of our replacement parts, was it profitable? Compared to the way we must use depreciation schedules, was it profitable? I say a resounding no.
“On the one hand the public and government agencies constantly maintain that our prices are too high. On the other hand, even with a super snow year, the industry still can not generate enough after-tax cash flow to keep up with the steep rise in cost of all capital and replacement items.
“We badly need shorter schedules of depreciation or an ability to at least depreciate on the basis of replacement costs. The investment credit helps but not enough over the lifetime of the equipment. This is not only the problem of the ski industry but of other U.S. industries as well. However, in the ski industry we must keep our equipment safe for public use and we must also be able to service the public’s ever increasing need. This is probably the basis on which we should approach the appropriate government legislative bodies, safety and public service.
“Charging higher prices for our services with tax rates as they are is only a small part of the answer. Higher prices may cover the additional cost of maintenance, insurance, local taxes and labor, but will not alone generate the capital to purchase equipment that has risen over 100 percent in four years. Certainly it does not justify expansion based on present borrowed money costs.
“This is not a problem that will disappear with neglect. Instead it is very real and will continue to remain a problem for ski industry management. If you should have any ideas on how to solve this insidious situation, they would be greatly appreciated.”
Very truly yours,
Nick Badami
Chairman of the Board, Alpine Meadows.
My thanks to Nick and I hope many more of you will take part. Send your comments to Kathe Dillmann at the NSAA office.
NSAA Activities
- The Ski Industry Risk Management Manual is in the final stage of production and will be circulated to members shortly.
- NSAA’s Insurance Plan managers will distribute a new training film this season entitled “The Verdict Is In”. It is designed to help areas deal properly with potential liability exposure accidents.
- The B.77.1 Committee has initiated work on a major revision of the ANSI lift standards code. Industry input is being actively sought at this time.
- Seasonal hiring will be less chancey, thanks to NSAA’s new manual “Reducing Costs By Improving The Selection Process for Seasonal Employees”, now being circulated. It includes a new standardized weighted application blank.
- The first Winter Regional Trade Show of this season is set for Waterville Valley, N.H., Dec. 10-12.
- The NSAA Rental Shop Operations guidelines are being revised and will be distributed to members this fall.
