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January 2012

Know Before You Go

The folks at Gunstock were eager to get into year-round operations, but knew enough to do their homework before they dove in.

Written by Peter Oliver | 0 comment

“Summertime, and the living is easy.” That used to be the mantra for many ski area operators—close up shop, put your feet up, and wait for winter to return. But today, they might twist Ira Gershwin’s words into something more like “summertime, and the business is thriving.” That’s why, for many area operators, those lazy, hazy days of summer are vanishing faster than snowflakes in July.

Recent years have seen a widespread effort among winter resorts to generate more business, especially during the summer months, from non-skiing activities. Those that have done a good job of it have turned the once-dormant months between April and November into profit centers. But doing a good job means detailed planning, good choices in the selection of activities, and implementation of a plan that maximizes an area’s unique set of circumstances.

As Claire Humber of resort planner SE Group says about building a four-season program, “It is always project-specific.” No single template will work for all ski areas. David Belin of RRC Associates echoes that: “Ski resorts are fairly similar to one another in the winter, but in summer they can be very different.”

So, before jumping into summer activities, do your homework. Before putting any activity into place, study the specific characteristics of your site and your potential market, and know what will work given your circumstances.


EYEING THE OPPORTUNITIES
Gunstock, N.H., is one of those that did its research. Many areas revamp master plans on a regular basis, but Gunstock, owned by Belknap County, is legally required to do so every five years. And the area used that requirement to explore non-winter opportunities.

In 2009, Greg Goddard, Gunstock’s general manager, began meeting with Humber to discuss the revision process and look into details for the upcoming master plan. Expanding non-skiing business became a central theme of their conversation. Their initial purpose, Goddard says, was simply “to gather ideas.”

After the brainstorming, a detailed planning process was put into action. The first step was a careful and scientific assessment of the regional market. As Humber puts it, the goal was to determine “how many (potential visitors) there are, who they are, what they like to do, what’s already in the area in terms of other recreational activities, and what’s missing.”

RRC, the market-assessment experts, came in to study the situation, and the basic numbers were promising. While winter visits to the region totaled under a million, according to Goddard, visitors in spring, summer, and fall totaled 5.1 million, with 3.4 million of those coming during the summer. There was a potentially large population to draw from, and a population with a strong family-oriented component. “Did we have enough volume [tourist traffic] to make summer activities work?” asks Belin. “Gunstock did. This might not have worked at more remote areas.”

The market assessment also revealed that there was a void Gunstock was well-positioned to fill. Non-winter visitors were coming to the region largely for water-based recreation on nearby lakes, most notably Lake Winnipesaukee. With all that, adding something like a water park or water slide would have been nonsensical. “But there was a surprising lack of adventure-oriented things,” Humber says. “There was a huge demand for gravity-oriented recreation, and nobody else was doing it.” Gravity-oriented … a mountain setting … Gunstock was perfectly positioned to answer the call.


PRACTICAL CONSIDERATIONS
Next in the planning process came a site assessment. In evaluating its non-skiing program, Gunstock had to determine what activities best suited its terrain, facilities, access, parking, and other logistical factors, as well as determine how existing summer operations would be affected. Gunstock was already fairly active in non-winter months, operating a 300-site campground and acting as a host to weddings, banquets, and special events ranging from a music festival to a triathlon. Whatever new activities Gunstock chose to integrate, they had to mesh seamlessly with or complement the existing activities.

Gunstock and its consulting planners looked at a long list of possibilities—ziplines, Alpine coasters, different kinds of sports, big events, etc.—and then, as Humber puts it, “we slashed and burned,” eliminating what clearly wouldn’t be part of the picture. For example, she says, it was decided that a full calendar of super-large events “was not sustainable, since it would take over the area and interfere with regular tourism business.”

A critical factor to consider was the interaction between overnight campers and an influx of day visitors. Discussions about potential strategies were followed by walks around the site, literally to get the lay of the land.

The final part of the planning process was a determination of financial viability. Basic financial questions were asked: how much a particular activity might cost to install, how much it might cost to operate, what its potential return on investment might be, and so on.

As a community-owned business, Gunstock has some unique financial circumstances and limitations. But Humber notes that every area, public or private, must deal with its own, particular issues with debt and/or access to capital.

A map of Gunstock’s ziplines shows they run from the summit to base, and beyond—one even crosses a parking lot and pond.

She also notes that, particularly in a scenario where capital might be thin, an area can consider financing alternatives such as the revenue-sharing plans that are common in the amusement-park business. Gunstock, for example, currently operates guided Segway tours through a revenue-sharing agreement with the equipment supplier.

But to determine how any new activity might fit into an area’s total financial picture means a return to that initial market study. Will enough people come and generate enough revenue to offset the capital investment and operational costs of a new activity?


TIME TO MOVE
At this point in the process, the Gunstock planners had eliminated most of the usual suspects and were focusing in on the select few activities that made most sense, and planning turned to implementation. Goddard and his team began sorting through potential vendors. The main activities added to the non-skiing roster: ziplines; “aerial treetop activities,” as Goddard calls them, featuring five courses of differing degrees of difficulty; and the guided, off-road Segway tours. Those activities had the additional appeal of having minimal operating costs—mostly manpower, with almost none of the maintenance and utility costs that are a big part of winter operations.

Success was immediate, and the future appears to hold added promise. In their first year, the treetop tours “definitely met our expectations overall, both from a financial perspective and an operational perspective,” says Goddard. He expects the program to pay off the initial investment in its third season.

Meanwhile, Gunstock’s ZipTour program, which Goddard puts on a five-year timeline for ROI, has been growing and evolving; the last of five ziplines was completed in early November. In media releases, Gunstock claims that “two of the ziplines on the tour will be the longest in the Continental U.S.” A little marketing cache certainly can’t hurt.

The one glitch in the whole array of activities, says Goddard, was that battery problems with the Segways limited the number of tours the resort was able to run. Nevertheless, the tours clearly had market appeal; they sold out every day, with 1,100 customers taking part during the course of the season.


THE FINAL WORD(S)
The main lesson learned from the Gunstock experience is that smart planning is everything, and comes from a sober and detailed assessment of an area’s unique circumstances. Just because something can work at Gunstock doesn’t mean that it would work elsewhere.

In addition, says Humber, areas would be smart not to paint the non-skiing picture with too broad a brush. The Gunstock region, for example, might have a healthy number of non-winter visitors to draw from, but all visitation is not created equal. April numbers are nothing like July to August numbers. She counsels ski-area managers to assess visitation “very specifically for every time of the year.” In other words, “just because you can run an activity [e.g., a zipline or an Alpine coaster] every day of the year doesn’t mean you should.”

So. . .summertime. With proper planning and implementation, the business can be busy, if not quite easy.