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January 2009

The Obama Factor

What should we expect from our new president? Here are a few likely scenarios.

Written by Jason Blevins | 0 comment

For some in the business of skiing, the ushering in of a left-leaning president and an allied Congress in Washington heralds a new dawn. For others, it portends doom. So the industry’s players are just like the rest of the country: awash in a wave of wondering, worrying and wishing.

With weighty issues like war and economic collapse large on the country’s horizon, it is understandable that public lands policy didn’t play much of a role in the presidential campaign. That leaves plenty of room to wonder—or worry—how a President Barack Obama and a Democratically controlled Congress will impact the country’s $12 billion-a-year ski industry.

But an industry can wish, can’t it? Especially the eternally optimistic ski resort operator, who is certain the next bountiful storm always is right around the corner. If the ski industry could script a wish list to President Obama, it would read something like this:

• We love visitors. Please fix the economy, assuage fears and get people vacationing.

• We love snow. Please get busy on climate change. Provide incentives for companies to further foster renewable energy programs.

• We love workers. Please fix immigration and let our H-2B visa workers return.

• We love our landlord. Please end 16 years of trimming the Forest Service budget. Or at least separate fire-fighting funds from operation funds.

• We love our home towns. Involve us and our communities in public land policy.


THE SNOW ECONOMY

Depending on who you talk to, cajoling visitors and protecting snow share equal ranking as the most critical issues facing the ski industry today. And while it’s a short, even modest list, there is little hope public lands and the ski industry will get swift action out of Washington.

“This country has some very real issues to address on January 20 and I see the emphasis on our economy and foreign policy and energy and health care taking precedent,” says Scott Kaden, head of the Pacific Northwest Ski Areas Association. “I’m not sure where the Department of Agriculture fits in there among those principal, urgent matters.”

Still, across the country, ski resorts are joining and forming diverse coalitions, preparing lobbying strategies and honing talking points in a unified effort to elevate the business of recreation in Washington. When times get tough, play becomes even more important. That would be the gist of any unified message the ski industry wants to send to Washington.

“We don’t want recreation to be left behind,” says Melanie Mills, president of Colorado Ski Country. “I think in the next year to 18 months we will see a lot more happening in Washington—things that we are very interested in—than we have in the last several years.”

Obama has been clear that he will aggressively and quickly address the country’s faltering economy as he settles into the White House. Easing the credit crunch is crucial for businesses that endure seasonal swings in revenue. But more important is encouraging people to spend. With retail consumer spending and destination vacation bookings in a downward spiral, any confidence Obama and Congress can inject into the economy will help. Bold steps toward alternative fuel sources and away from a dependence on foreign oil—a cornerstone of Obama’s campaign for president—will help stabilize an economy beholden to wildly fluctuating oil prices. Even the perception of stability means budget-guarding vacationers might find the confidence to pull the trigger on a ski trip.

“I see the number one benefit of this election as one-party control. For at least one period of time we will be able to speak with one voice,” says Vail Resorts CEO Rob Katz. “We can take actions that get people feeling more confident and stable in the economy. I think Obama’s economic plan is appropriate. Whatever plan is going get the economy moving and quickly, I think, starts with stability.”

But then, for skiers, tough times can be eclipsed by snow. “I’d rather have a bad economy and good weather than a good economy and bad weather,” says Tim Boyd, president of Peak Resorts.


CLIMATE CHANGE

Protecting that snow and pushing for hawkish action on climate change shares top billing on the ski industry’s wish list for Washington. And that’s a big step for an industry that has long simply wished that government ease up on heavy-handed intervention, costly bureaucratic obstacle courses and general meddling in the business of uphill transportation.

“Definitely climate change is the most important issue right now,” says Chris Diamond, chief of Steamboat ski area. “That and decreasing our reliance on foreign oil and a more rational energy policy is going to trump traditional issues like tightening NEPA, roadless expansions and endangered species. I’m hoping the new president takes the 30,000-foot view. I mean climate change, we have got to fix this or we are all done.”

If there’s a singular message Washington will hear from the ski industry, it’s “get to work on climate change,” says Geraldine Link, public policy director for the National Ski Areas Association (NSAA). Already, 70 resorts are actively lobbying Congress for mandatory caps on carbon dioxide emissions, which could decrease the amount of greenhouse houses believed to contribute to global warming. Any sort of federal incentives for capping and trading the emission of pollutants would be universally embraced by ski resorts.

“That is definitely going to happen,” Link says. “A lot of people in the industry are very concerned about climate change and something will be done about it in this Congress. It’s the big one.”


ANTI-BUSINESS CLIMATE CHANGE?

While many wish, others worry. The ski resort world is amply stocked with right-leaners whose representatives endured a drubbing in this election. There is a palpable fear that a liberal president and even more liberal Congress will conspire to derail business. Encouraging unionization, increasing minimum wage, requiring small businesses to provide health care, installing tough environmental regulations that hinder expansion are typical Democratic strategies that have many resort bosses fretting.

“I think we have put in charge one of the biggest anti-business guys you can put in power,” says Boyd, whose 11 resorts harvest 1.7 million annual skier visits and employ 250 full-time workers and up to 8,000 seasonal workers. “I’m not enthusiastic anything positive will be coming out of this administration. Based on Obama’s track record, he has never been a friend of business. Somehow anyone who is an employer has been looped into the same vein as the Wall Street guys, and every businessman is a bad guy. If he raises our taxes, or raises minimum wage, the only choice business has is to pass the cost on to the consumer, and I’m not sure this business can afford to sell $100 lift tickets in this economy.”

A return to nationwide, blanket environmental rulings for all public lands – à la Bill Clinton’s on-the-way-out controversial roadless rule, which many states are still struggling to implement—is another fear among resort operators.

“My argument is a global economic argument. Let us do business. Taxes to me have never been the number one issue. Tax me fairly, but don’t regulate the hell out of me and stymie me in other ways so that I can’t do business,” says Tim Mueller, of Crested Butte, Colo., Okemo ski area in Vermont and operator of New Hampshire’s Mount Sunapee. “The ski business is generally considered a clean business and environmentally friendly, and our country needs recreation. Don’t hamstring us with extraordinarily restrictive Forest Service requirements and other environmental policies that are anti-business and anti-ski area growth.”

But nixing some business-friendly public land policies proposed by President George Bush is on the Obama administration’s agenda. Bush’s recent moves to relax environmental regulations—specifically a rollback of protections for endangered species that enables the federal agencies to choose for themselves whether a proposed project harms endangered animals and plants without consulting with the Fish and Wildlife Service—have been targeted for reversal by Obama’s team.

“As president, Senator Obama will fight to maintain the strong protections of the Endangered Species Act and undo this proposal from President Bush,” Obama campaign spokesman Nick Shapiro told the Associated Press in late August. “After over 30 years of successfully protecting our nation’s most endangered wildlife like the bald eagle, we should be looking for ways to improve it, not weaken it.”


ENERGY POLICY

One place both sides of this election agree is that some federal incentives for pursuing renewable energy would help not just the ski industry but the environment in general. Ski resorts are already leading the way in developing and fostering earth-friendly energy plans. Jiminy Peak in Massachusetts has installed a wind turbine. Aspen Skiing has built a massive solar array. California’s Kirkwood is installing 20 wind turbines, and Whistler Blackcomb is building a micro hydro project that will offset all its annual energy use. If Washington could deliver more financial incentives for boosting renewable energy or even generating energy on-site, there will be dozens more resorts building wind turbines, exploring geo-thermal and hydroelectric energy and installing solar panels.

“We just added solar and we are always looking to add renewable to our portfolio,” says Mike Kaplan, CEO of Aspen Skiing Co., which last year spent $1.1 million to build a 147-kilowatt solar array capable of producing annual power for one school and 20 homes. “If Washington can help make the math work, there is no reason not to. It provides a return on investment and it gives an opportunity to stabilize your energy costs on a long-term basis. With the government’s support, renewable energy can offer pragmatic solutions for those who are skeptical. It can show them the money.”


VISA REFORM

One of the most immediate needs in the ski industry is visa reform. Resorts this year scrambled to find workers after Congress—a Democratically controlled Congress, it should be noted—neglected to renew the country’s H-2B visa program. That program enabled ski resorts to employ the seasonal workers from Australia, New Zealand and South America who flock to the U.S. every winter. Significant progress on tweaking the nation’s immigration policy has been held up by the Congressional Hispanic Caucus, and sweeping reform is high on the agenda of the 111th Congress. It’s not just guest and seasonal workers, but the deep-pocketed international tourists who have been deterred by the nation’s troubled immigration rules, blocking out some of the resort world’s most beloved customers.

Immigration reform has been simmering on the back burner for the past couple years, and the new Congress will quickly hear a clamoring from the business world—including the hospitality, agriculture, fishing, resort and all types of extractive industries—to get on the issue of temporary worker visas. “Small businesses and ski resorts across American have been let down by Congress in the last year and we need swift and lasting action on this,” says NSAA’s Link. “Our main effort will be advancing an increase in the number of H-2B visas available or any other program that creates more opportunity for employers to hire seasonal workers."

Obama said during his campaign that comprehensive immigration reform would be a “top priority” in his first year as president. In a September campaign stop in Pennsylvania he expressed support for streamlining the H-2B visa process. His immigration reform policies listed in his transition plan outline an approach that leads with tightening borders, overhauling the U.S. immigration bureaucracy and cracking down on employers who hire illegal workers.

The ski industry will join construction, landscaping, food service, manufacturing, processing and other industries in pushing for major upgrades to the country’s guest worker program, which includes the H-2B visa program. Hispanics, who voted overwhelming for Obama, support increases to the temporary worker program, while union and labor forces, which also lent tremendous support to Obama during his campaign, have historically opposed increasing the number of guest workers allowed in the U.S. Meaning the new president may find some obstacles in his pursuit of significant tweaks to the country’s immigration policy. Where the resort industry’s interests rank in the ever-growing line of Obama-penned IOUs is too early to tell.


FOREST SERVICE SUPPORT

Another resort industry positive that could come from a unified legislative and executive branch in Washington is much needed assistance to the Forest Service. For two presidents over 16 years, the Forest Service has endured consistent and painful budget cuts. For the 134 American ski hills that operate on public lands with a permit from the Forest Service, a limping landlord can be hard on business.

The relationship between the Forest Service and the ski industry was recently reviewed by California resorts. While finding the partnership healthy, the West Coast resorts did identify about 20 action items that could benefit the state and its skiers. But addressing almost every item was stymied by inadequate federal funding for California’s perennially fire-plagued Forest Service, says Bob Roberts, president of the California Ski Areas Association.

So the top priority on the resort wish list in California is restoring the Federal Land Assistance, Management and Enhancement Act—or FLAME Act—which would establish a dedicated fund for fighting catastrophic wildfire without decimating Forest Service operating funds.

“The fires are just consuming the lion’s share of the Forest Service budget right now,” Roberts says. “We need to see the FLAME Act restored so every time there is an overage in the fire budget, they won’t be stealing $400 million out of the state’s Forest Service program. Our relationship with the Forest Service is very strong and solid, but when you are in a relationship where your landlord is struggling to pay property taxes, you have a problem.”

The California industry has several high-powered allies in Congress, including Sen. Barbara Boxer, Sen. Dianne Feinstein, who has served on the Senate Appropriations Committee, House Speaker Rep. Nancy Pelosi, who owns a home in Sugar Bowl, and Sen. Harry Reid of Nevada. Even with pals in D.C., the California ski industry is building a broad coalition to fight for federal funds. They’re joining farming and hospitality groups to help push immigration reform. And gathering their resort wagons to push for a bump in Forest Service funding. But funding the Department of Agriculture’s Forest Service will not reach top priority status in an administration addressing two wars and a global financial crisis. There’s a lot to pay for.

“It is such a large turf war and everyone feels they were the group that got Mr. Obama over the top and they’re all going to be asking: ‘Where is our just rewards?’” Roberts says. “We don’t necessarily feel that way, but we have to start somewhere and we have to build a wide coalition.”

Another industry ally in Washington is Mark Udall, a Colorado Democrat who won a senate seat in November and has long advocated for ski resorts. Even industry players whose folks lost in this election find solace that Udall—an outdoorsy type and skier—will take their cause to Congress. This summer as a Congressman, Udall scripted a bill that would tweak the country’s 1986 ski area-permitting law so that ski areas on public lands have more latitude in offering year-round play beyond just wintertime skiing. The 1986 law allows Alpine and cross-country skiing but doesn’t mention snowboarding or mountain biking or any other activity. Udall’s bill, which never passed through committee, would have given the Forest Service more room when it comes to approving activities like tubing, snowbiking, mountain biking and hiking.

Udall’s spokeswoman Tara Trujillo says that while her boss had yet to finalize plans for his new role as senator, Udall likely will re-introduce his bill in the next Congress. “I think you will see him continuing to support the economies of small towns in the mountains,” Trujillo says. “If you can draw more tourists and visitors up to the smaller mountain communities, it strengthens not just their economies but the entire state’s economy.”


HEALTH CARE REFORM

Health care is another cornerstone of Obama’s agenda that could directly impact ski resort business. Promising health care to every American sounds good. But when it comes time for employers to actually provide it, smaller businesses could feel a debilitating pinch.

In Colorado this past election, a proposed ballot initiative—yanked in the final hours after a rare pique of business-labor collusion—would have required small business employers to pay 80 percent of employee health-care premiums. Anything like that would put Aaron Brill out of business. “If Washington forces me to pay health care, I’m screwed,” says Brill, owner of the 26-employee Silverton Mountain. “You don’t go to work in the ski industry expecting benefits.”

But the big guys pay it anyway. The second highest expense for the four-hill Aspen Skiing Company is health care benefits, which falls just behind payroll. “Addressing health care is very important for us as a business,” says Aspen’s Kaplan.

And including seasonal workers in some type of health care reform would aid the ski world, says Mills with Colorado Ski Country. “We’ll be watching and participating in that debate from a perspective of seasonal employers,” Mills says. “Sometimes the health care discussion doesn’t address the seasonally-employed workforce. We will be hoping that the broad themes of health care reform include employees who work four to five months a year.”


STRANGE BEDFELLOWS

Maybe one of the most interesting developments in the ski industry under the new Washington regime will be the diversity of coalitions involving resorts. For immigration reform, resort operators will be joining hoteliers, farmers, and rock quarry employers in lobbying efforts. For renewable energy tax credits and incentives, the industry will be jostling for congressional attention with utility companies, municipalities and school districts. Who knows what kind of mix the ski world could find itself a part of as it vies for a piece of the Obama pie.

“We are going to find come common interests and themes in some unusual places, I imagine,” Mills says. “We will absolutely work to elevate our voice through unique coalitions.”


Jason Blevins has been a business and sports reporter for the Denver Post. He is now a general-assignment reporter for the paper.