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May 2010

Blue Pages :: May 2010


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health care reform will impact industry
With the advent of Obamacare, the resort industry, along with the business world, will play a role in expanding insurance coverage to most Americans. Most importantly, it’s certain to increase costs. The bill’s 120-day “seasonal worker” exemption from the employer mandate to provide coverage or face a $2,000 penalty will affect the majority of areas, as Congress has made it difficult for employers to classify employees as “part-time” or attempt to hire employees for less than 120-day periods. The goal, after all, is to provide insurance coverage for all Americans.

But the industry has more than three and a half years to prepare, as the mandate to provide health insurance to all employees doesn’t take effect until Jan. 1, 2014. And there are ways for resorts to mitigate the bill’s impact. Government agencies have yet to write the rules that will guide the implementation of the bill, and NSAA is already considering ways to lessen the law’s impact. One session at the upcoming convention in Orlando will address the issue as well.

And addressing the change is essential. It’s highly unlikely that the bill will be either repealed or declared unconstitutional, despite efforts on both fronts.

helmet laws a-comin’
Whether this year or next, it’s likely that California or New York will institute helmet requirements for some resort guests. State associations in both states are backing bills that would require helmets for kids (age 14 and under in New York, under 18 in California) and place the burden for compliance on parents and the kids themselves. These proposals largely mirror existing laws regarding helmet use by bicyclists, which makes the concept easier to sell. “We have to be proactive and work to get a bill we can live with,” said Scott Brandi of SANY, “and not one that includes unfunded mandates.”

Unfortunately, that’s also a possibility. Legislators in both states are proposing more sweeping rules that would require all guests, and, in some cases, employees as well, to wear helmets, and would place the burden of compliance on resorts. These would create much bigger headaches, perhaps requiring massive stores of rental units, at least in the short run, not to mention the hassle of enforcement.

Given the weak economic climate in both states, resorts are getting a receptive ear from legislators who are concerned about rural employment in winter. In New York, resorts provide 17,000 winter jobs, and representatives are loathe to cause the loss of any of those. With careful lobbying, this looks like a battle the good guys can win.

For skiing, that is. The First Family made two trips to Liberty Mountain, Pa., last winter, including a visit over President’s Day weekend. Michelle Obama and daughters Malia and Sasha brought friends, donned rental gear, and generally had a great time.

As much as possible, the Obamas tried to be just plain folks. “Put them on the mountain in goggles and helmets and they look like everyone else,” says Liberty president Eric Flynn—aside from their Secret Service detail, which always manages to look like what it is.

Was there any pressure in hosting the First Family? “There’s a certain anxiety with having that activity at the resort,” Flynn admits. “It was our first time hosting any President’s family. But it was easy and fun, especially the second time. We knew the drill, and that made it much easier.” We hope the Obamas felt likewise.

xanadu snowpark gets veteran operator
Indoor skiing in the U.S. took a step forward recently when Select Contracts was chosen to operate the ski facility at New Jersey’s star-crossed Xanadu project. While the overall development remains a work in progress as a potential new investment group negotiates for control of the project, the ski facility, Xanadu SnowPark, is nearly complete. Lifts and snowmaking are in, tested, and approved for operation.

Select Contracts has run similar concessions in other parts of the world and has begun tweaking the Xanadu site to improve its chances for success. That includes a restaurant and bar where snowsliders and friends can relax and watch the action. The site is being prepped to reflect the typical use pattern—indoor venues can sustain a slider’s interest for about two hours. Everything else must add to the entertainment value.

But all that is on hold until the larger project is finished, sometime in early 2011 at the earliest. With $2 billion invested to date, the project needs an estimated $500,000,000 more before it can open, along with a critical mass of commercial tenants.

At the very least, the Olympics exposed millions of Americans to snowsports this past season. Lindsey Vonn graced the cover of Sports Illustrated before the Games began, then was joined on the cover by medalists Bode Miller, Andy Weibrecht, and Julia Mancuso after the Games. Snowsports were at the top of NBC’s ratings during the first weekend, and the steady stream of successes of the skiers and snowboarders kept them on the tube for much of the Olympics’ two-week run. The athletes—Canadian and American—were among the most likeable and engaging of the Games.

Of course, it’s impossible to measure the extent to which this will inspire never-evers to head for the hills. But once again, the Olympics proved that there’s an enormous audience for winter sports. All that good exposure can’t hurt.

The figures are in, and it’s official: SIA’s relocation from Las Vegas to Denver was a success. In terms of overall attendance, anyway. The show attracted more than 18,000 exhibitors, buyers, VIPs, and media, and generally exceeded expectations. The on-snow demo following the show drew more than 2,000 attendees and filled Winter Park’s lodgings even more than the Christmas holiday.

The mountain connection was strong even while the show was in Denver. Several resorts hosted show guests at downtown watering holes, and Aspen presented the X Games live on a 30-foot screen in a downtown park. Many attendees commented on the friendly reception, especially compared to Vegas, where the ski industry has been considered low rollers. The only sour note in Denver was a series of signs inside the show that touted the value of buying rather than renting gear. One example: “Do you know where your rental skis have been? Chances are they’ve been kissing rocks, cruising parking lots and losing their cool.” With rentals accounting for nearly a quarter of all ski sales, the signs seemed a bit insensitive to rental buyers.

A recent article in Forbes warned of the danger faced by the ski industry as Baby Boomers begin to exit the sport. While the impending decline in visits by Boomers is not exactly news to winter resorts, the article did serve as one more reminder that the day of reckoning is nigh.

The loss of these prime Boomer customers, long anticipated within the industry, has already led to changes in resort business models. Development of terrain parks, less expensive season’s passes, the explosion of children’s programs and fifth-grade lesson programs, concerts and other youth-oriented events, changing F&B menus, all reflect the need to evolve and remain aligned with customer needs.

Perhaps the biggest challenge will come from changing tastes (and prices) in real estate. Many markets are saturated, and future buyers are unlikely to match the purchasing power of the Boomers—even if the stock market climbs to new highs. Gen X is smaller than the Boomer generation and less inclined to buy high-end vacation homes.

Related to that are the declines in room rates of about 20 percent over the past two years. These have been reported by a variety of sources, most notably the Mountain Travel Research Program, but are consistent throughout the hotel industry. The recession certainly accelerated this change, but it would have happened regardless. Room rates shot up at a rapid clip in the early part of the decade, and it’s not likely that the economy will recover enough strength to support a sharp rise in rates in the near term.

The U.S. Fish & Wildlife Service chose not to list the American pika as an endangered species, saying that, unlike the polar bear, global warming does not threaten the little critters. The decision derails environmentalists’ aim of linking species protection and climate policy ... Mont Orford, Quebec, is for lease for $1. The catch: the lessee must put up $4 million as a security deposit ... The U.S. Forest Service is reviewing regional forester Charlie Richmond’s decision to bar development of Snodgrass Mountain at Crested Butte.