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July 2011

Mountain of Opportunity

Mont Saint-Sauveur in Québec has long seen the potential of summer operations as a legitimate profit center.

Written by Peter Oliver | 0 comment

Location, the real-estate business instructs us, is everything. Location, however, can span a broad spectrum of assets and liabilities for any ski resort trying to make the most of summer opportunities. Mont Saint-Sauveur in Quebec provides a good case study on how to manage that balance sheet.

Put another way, Mont Saint-Sauveur (MSSI) has turned its summer business into a success by making the most of its locational assets and minimizing its locational liabilities.

The modest-sized resort is located about 45 minutes from Montreal, to the south, and about 45 minutes from the big kahuna of Québec ski resorts, Tremblant, to the north. The easy assumption to make at first glance is that proximity to a major metropolitan area would be an asset, and proximity to a major competitor a liability.

It’s not so simple, though, says MSSI president and CEO Louis Dufour. While Montreal does indeed put a sizeable population base at the ski area’s threshold, it also puts the area’s summer activities in a direct face-off with summer activities that the city itself can offer. Families who might consider a visit to Mont Saint-Sauveur for a day at its water park, for example, might opt instead for a day at the city zoo.

So how do you convince a family to give up the city activities and make the 45-minute drive? “We have to make sure we are offering a unique opportunity,” says Dufour. That means, he says, creating activities that not only are unavailable or hard to find in the city, but which also make the most of the ski area’s mountain setting.

Mont Saint-Sauveur’s main summer attraction is its water park, originally opened in 1985 with a wave pool and a couple of slides. Dufour says that the uniqueness of the park—that is, what differentiates it from pools or water parks in metro Montreal—is that “the runs are integrated into the mountain and scenery.” Such a presentation, he says, offers guests a much more organically natural experience than, say, something “built on scaffolding in a parking lot.”

To further enhance the park’s appeal, especially for repeat visitors, the resort has typically added new attractions every other year. The water park now features 20 slides, pools and other water features, rated “easy-going,” “adventurous,” and “thrilling.” That has expanded its appeal to a complete range of park visitors. The keys to the success of the water park are that it is not a one-size-fits-all activity and that it is constantly growing and improving. And successful it is – with the water park as its centerpiece attraction, Mont Saint-Sauveur can attract 6,000 visitors on a busy weekend day in mid-summer.

Nevertheless, relying entirely on water-based activity courts uncertainty. A water park can produce healthy business on sunny, warm days, but business can drop precipitously if weather is uncooperative. In addition, summer in boreal Quebec is mercilessly short. Hence, says Dufour, Saint-Sauveur has brought more “dry” activities into the non-skiing mix, not only to help its summer business but to bolster shoulder-season visitation as well.

The objective, Dufour says, is to achieve a relatively uninterrupted, 12-month flow of resort business and to get away from a reliance on a seasonal structure. Toward that end, Saint-Sauveur installed a 1.5-kilometer alpine coaster two years ago. Elevated above the ground to provide clearance over the snowpack, the coaster can run year-round. Offering a mountain-oriented activity like the coaster in typically slow months like April and May allows a degree of operational continuity, especially in attracting groups during the shoulder seasons.

Dufour also believes that the overlap of something like the coaster from winter into summer promotes seasonal cross-pollenization. Skiers see the coaster and think of summer-visit possibilities; non-skiing coaster riders see skiers in the shoulder seasons and consider trying the sport in another visit. (Mont Saint-Sauveur’s ski season is one of the longest in the East; the area typically stays open from early November to mid-May.)

Further integrated within the summer program is camping at nearby Morin Heights, where a combination of cabins and tent sites is typically open from late May to mid-October. (Mont Saint-Sauveur owns no lodging at the ski area.) The resort has also added a tree-canopy adventure that it has dubbed Acro-Nature, combining ladders, walkways, and zip lines, including one nearly 1,000 feet long. Acro-Nature operates from late May through October.

Throw in food and beverage (including barbecues), retail, and non-resort activities like hiking and cycling, and Saint-Sauveur has assembled a well-rounded summer playground.

Three key principles guide Saint-Sauveur’s approach to its summer program, principles that are carryovers, really, from its approach to its winter business: variety, profitability, and renewal.

Recognizing families as its main customer base, with visitors ranging from very young to grandparental, the resort has designed each activity with a full range of ages, abilities, and thrill-seeking levels in mind. Just as the water park has runs with a range of ratings, the Acro-Nature area also features routes of different difficulties and challenges. Speeds on the alpine coaster can reach in excess of 25 miles an hour, but coaster vehicles are equipped with self-controlled brakes to allow passengers to maintain speeds they are comfortable with, especially when kids are aboard.

The resort looks at summer profitability not just from an overall perspective, but also compartmentally. Each part of the integrated summer program, from food and beverage to the various activities, must justify itself as “a profit center,” says Dufour. Anything in summer that can’t operate in the black on its own merits doesn’t belong.

Finally, Dufour believes it is important to keep refreshing and upgrading the experience. “If our company is showing a profitable situation, we re-invest,” says Dufour. That’s basic business 101: Put profits back into operations that can generate more profits.

One of the rationales often cited for a ski area in operating a summer business is personnel management—the retention of employees on a 12-month basis. There is both truth and fallacy in that premise, says Dufour. Saint-Sauveur’s full- and part-time winter staff is about 1,500; its summer staff is about 450. In other words, more than two thirds of the winter staff is laid off for the summer. Seasonal turnover and re-training issues don’t simply disappear because of the presence of summer operations.

But they do shrink. Dufour says the core staff that stays on for the summer comprises many of the company’s critical employees, such as lift mechanics and electricians. While lift operations are considerably reduced in summer—the area operates just two of eight lifts on a regular basis—mechanics and electricians are still needed for continuing lift maintenance as well as seeing to the technical needs of the water park, the alpine coaster, and base-area operations.

Equally important, says Dufour, is the retention on a year-round basis of customer-service personnel. New staff can be trained in necessary skills and duties, but Dufour says it takes time to build a belief in, and commitment to, the resort’s mission, and for customer-service employees to be able to transmit that belief to customers. Put another way, keeping customer-service employees on board year-round keeps the resort’s relationship with its visitors on message.

Back, then, to the matter of location and how Mont Saint-Sauveur’s location dictates its business plan. Clearly, the proximity to Montreal defines how the resort goes about its business; according to Dufour, 90 percent of MSSI’s business comes from metro Montreal. Not surprisingly, the bulk of Mont Saint-Sauveur’s sales and marketing outreach is directed toward Montreal.

But looking in the other direction, what should one make of the proximity of Tremblant? When Intrawest first arrived there about 20 years ago to start building a mega-resort, the assumption was that smaller Laurentian resorts like Mont Saint-Sauveur would be severely tested. And certainly Tremblant has presented competitive challenges, says Dufour.

In many respects, however, the relationship is as much complementary as competitive. There is surprisingly little overlap between Mont Saint-Sauveur’s summer offerings and Tremblant’s; golf, tennis, and activities on Lake Tremblant are Tremblant’s primary attractions, and the water park at Mont Saint-Sauveur fits nicely into that picture as an off-site option for Tremblant visitors.

In addition, Tremblant reaches out to destination travelers far beyond metro Montreal. So Mont Saint-Sauveur can effectively piggyback on Tremblant’s allure to destination travelers in reaching the 10 percent of its customers who are not Montreal-based.

While Mont Saint-Sauveur might lose a small percentage of travelers to Tremblant, the net impact, Dufour suggests, is a gain—people who would not have come to Mont Saint-Sauveur by itself, but were attracted to the region by Tremblant. Mont Saint-Sauveur seeks to attract that population by advertising in print publications and via TV, especially resort TV, in Tremblant.

What can other winter resorts learn from the Mont Saint-Sauveur year-round model? For starters, choose activities that offer something unique and which are compatible with the mountain environment. Give visitors a demonstrable reason to make the extra effort to leave the comfort and summer fun of their own neighborhoods and come visit. In addition, make sure those activities are operationally profitable on their own merits. In other words, no loss leaders.

And then, seek out additional attractions. Never stand pat. If summer operations are profitable, reinvest profits and keep renewing the experience for returning customers.

And finally, assess the pluses and minuses of your potential market. Then, make the most of the former and diminish the impacts of the latter.

Location is everything. What you do with it, though, has everything to do with how successfully you can operate a summer business.