The conventional wisdom in the ski industry is that snow trumps all other sins. But what if all those other sins unite? That’s what it felt like we were facing in the early fall: economic turmoil, plunging stock markets, rising unemployment, record energy prices. Can a few flakes of snow really top all that?
Indicators through the first week in October were mixed. Some Western destinations were working hard to secure reservations. Many other resorts, particularly weekend destinations in the East, reported season pass sales and early reservations on par with or up over last year’s record season. But everyone acknowledged the storm clouds on the horizon.
In the Rockies, Vail reported that 2008-09 season pass sales were down 8 percent—despite introducing the $579 all resort Epic Pass last spring —and that hotel reservations were off 18 percent.
This softness was not entirely a recent phenomenon. Ralf Garrison, director of Denver-based Mountain Travel Research Program (MTRP), which tracks reservations at 290 mountain properties located mostly in the western U.S. and Canada, said hotel reservations were down three percent last winter. That slide continued over the summer, with occupancy down five percent over the previous summer.
Looking ahead, Garrison foresaw more trouble. MTRP asks hotels to report all reservations on the books for the next six months. At the end of July, reservations for the next six months were down 25 percent over the same period last year. At the end of August, reservations were down 10 percent. Data for September, when several major financial institutions failed and the stock market plummeted, were not available at press time.
“Normally, we expect to see six times the volume of reservations in September compared to August,” Garrison says. “I believe the September numbers will be off drastically.”
On a positive note, Garrison says room rates have continued to rise, offsetting some of the drop. But common sense says that can’t continue. “At some point, when demand drops, rates have to follow,” he said.
A Proactive Response
Many resorts saw trouble looming last spring. Kelly Ladyga, director of media relations at Vail, said the resort’s new $579 Epic Pass was just one of several new products Vail launched to try and get out in front of the economy. “We’ve put a whole bunch of things out there,” Ladyga says. “We’re very aggressively putting various value packages out there on a continual basis.”
The company has also stepped up its international marketing, particularly in Canada, Australia, Mexico and South America, and re-did its website (snow.com) to make it more user-friendly. “We’ve put the emphasis on usability and providing tools for people to put together their entire vacation package from this one site,” Ladyga says.
Snowbird, Utah, also began making adjustments last summer. “We looked at the economic situation and made a conscious decision to create value products,” says Dave Fields, communications manager. Snowbird cut prices on several new and existing pass options, and heavily promoted its most economical pass—any 10 days for $399. “We didn’t drop the price on that one but explained the value,” Fields says. “The media really grabbed the story.” The result has been an uptick in season pass sales.
Snowbird’s hotel reservations, however, were behind for November and December, and off considerably for January, February and March. “Our strategy right now is to put a lot of different offers out and see what takes, and then put those out more broadly,” Fields says. “The question is, how much do you discount in the midst of hysteria? We’re talking about that on a daily basis.”
Airlines are not helping any. Fewer routes, higher fares and baggage fees will make flying to any ski destination more difficult and expensive this winter.
To combat airline issues, Aspen, which has actually added routes this winter, is unveiling a shipping program with UPS and/or FedEx to allow guests to ship their equipment to the resort and avoid baggage fees. Other resorts are considering baggage “gift cards,” vouchers or other incentives. “We’re also redoubling our efforts to encourage guests to rent equipment,” says Jeff Hanle, public relations director at Aspen.
Still, Hanle describes hotel reservations as “not great.” He adds, “The higher end properties are filling in faster than the mid and lower range properties.”
Early season bookings were running about five percent behind at Mammoth, but the resort attributed that more to poor early snow the last two years than a poor economy. Holiday bookings were on pace or slightly ahead. “Our proximity to southern California, and the ability for people to drive here, even with higher gas prices, may be an advantage for us this season,” says Joani Lynch, communications manager.
Northstar-at-Tahoe, which also has a big drive market, was tracking ahead for both passes and reservations. “I think it’s part of that ‘stay-cation’ phenomenon of people staying closer to home,” says Jessica VanPernis, communications manager.
East: Looking Good
Stay-cations may also benefit Eastern resorts despite the turbulent economy. Bonnie MacPherson, PR director at Okemo, Vt., says the resort’s call center was eerily quiet the week of September 15, when Lehman Brothers failed, touching off the current crisis. But calls—and sales—have rebounded strongly. Season passes are up 25 percent and lodging five percent YTD.
Passes and reservations were also tracking ahead at Stowe. “Skiing is more of a lifestyle choice for people than some other types of leisure travel,” notes marketing director Mike Colbourn.
Early activity was also brisk in New Hampshire. Bretton Woods, now teamed with Waterville Valley and Cranmore in a Threedom pass, has unveiled several new attractions, including a spa and treetop canopy zipline tour. “There’s nothing to indicate the economy is having an impact,” says Irene Donnell, PR director.
Ditto at Snowshoe, W.V., where “it feels like previous years,” says Laura Parquette, communications manager. She notes that hard numbers are still soft, but no more so than other years. Because of the shorter booking window, she says the resort is confident those numbers will be there when the time comes.
“Several years ago, Christmas would be booked solid by mid-September,” Parquette says. “Now, it’s later. We’re not concerned. We think we will benefit from the drive market and higher costs of flying.” To drive home that point (no pun intended), Snowshoe is running a web campaign called, “Your trunk is free,” comparing airline baggage fees to the no-baggage-fee cost of driving to Snowshoe.
Julie Ard, corporate communications director at Boyne Resorts, says early sales for the entire company were good. At Big Sky, Mont., passes were up, and social and group bookings “steady.” Crystal Mountain, Wash., had great success with its spring season pass push, and momentum has continued into the fall, with pass sales up nearly 30 percent. At Michigan’s Boyne Mountain and Boyne Highlands, passes were on par and overnight reservations up over last year. At Loon, N.H., pass sales were up 12 percent, and even or a little ahead at Sunday River and Sugarloaf, Me. Reservations were “well ahead” at the Maine resorts, mainly due to groups.
Shanty Creek, Mich., continuing its aggressive renovation and repositioning campaign, cut prices and added value to its season passes. Although unintended, the strategy has also helped the area get out in front of the slowing economy. The result has been a nearly six-fold increase in passes and 30 percent increase in overnight reservations YTD.
“Shanty Creek has been in a bad economic downturn since 2000,” says Jon Stultz, VP of sales and marketing. “Part of our pricing strategy is to make sure we have a product available to the mass public. The strategy has dovetailed nicely with the overall economic slowdown.”
Talk about your silver linings . . .