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July 2012

Blue Pages :: July 2012

WINTER 2011-12 SEASON: BY THE NUMBERS... A LATE ADDITION TO BEST/WORST MARKETING... NO FUN IN THE FAMILY... BEAN COUNTERS: IF YOU CAN’T BEAT ’EM... OSHA WANTS TO SEE YOUR JHA... PEAK RESORTS JUMPS SKI NH SHIP... CONSOLIDATION IN SNOWMAKING...

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WINTER 2011-12 SEASON: BY THE NUMBERS
This past winter was painful, especially for resorts in the marginal weather zones, as the numbers bear out. The Kottke report shows visits were down nationwide by 16 percent, to about 51 million. Colorado, which accounts for 20 percent of visits, was off 10 percent. So were Vermont and Utah, which together account for about 13 percent of total visits.

So, if that third of the nation is off just 10 percent, the remaining two-thirds must be down by an average of almost 20 percent, to explain that nationwide 16 percent slump. Is that really likely?

Kottke says the Northeast was down 20 percent. Is that possible, if Vermont was down just 10 percent? (We’ve been told, privately, that some major Vermont areas were off much more than that.) Well, New Hampshire was off 20 percent. We suspect that southern New England exceeded that. But for the region to hit the Kottke figure, New York and Maine must have been down more than 20 percent. We’ll wait to see what they report, but we have our doubts.

Nationwide, though, steep declines in several regions make the Colorado and Utah numbers look real. The Southeast? Kottke says it was down 24 percent. The Midwest? 18 percent. California, Nevada, and Arizona—down 26 percent. In that case, it would take relatively strong performance in Colorado, Utah, and perhaps even Vermont to keep the national number from being even lower.

One conclusion from all this is that the solid reputations of the three states, built on heavy marketing investment, helped offset the warm weather and below-average snowfall. That spending may not seem necessary in a good year, but seems to pay dividends in bad ones.


A LATE ADDITION TO BEST/WORST MARKETING
We hate to rain on anyone's parade, but we have to give NSAA's 50th Anniversary video a big thumbs down. The video starts off well enough, with three "actors" explaining how far the industry has come in 50 years in terms of safety, policy and enjoyment, but in disappointingly generic terms.

And it's all downhill from there. After 30 seconds, the video launches into a love fest with core skiers and riders and the wonderful impact the sport has had on their lives. And that is grossly off point. If ever there was a time to celebrate what we, as an industry, have accomplished through the organization, now is the time. This video does a disservice to the hard work of hundreds who, over the past 50 years, largely on their own dime and on their own time, paved the way for future operations. From Forest Service permitting issues, liability, and education to being heard in legislative circles on important issues like healthcare, foreign employees, skier statutes and more, NSAA has a lot to celebrate.

So why focus on three or four customers who love sliding on snow? And why be subjected to quotes such as this: "Resorts have changed so much over the past 50 years—terrain parks are bigger, better and safer," says a 20-something snowboarder. The sport's been around a lot longer than 50 years, for starters, and terrain parks have been around for a lot less. We should be celebrating the people who engineered spectacular victories on the industry's behalf, allowing us to operate thriving and successful businesses that, yes, do bring joy to millions—all because we came together 50 years ago with one voice, the NSAA.


NO FUN IN THE FAMILY
Big White and Silver Star, sister resorts in B.C., performed a strange separation this spring. The two had thrived under the joint ownership of Desmond Schumann for more than a decade. But after his death in April, brother Peter (who now owns Big White) and sister Jane Schumann Cann (Silver Star) declared the two resorts were going their separate ways.

Since the two areas sold a popular joint season’s pass, their attempts to spin the split as being good for both areas and guests rang hollow for many fans—as social media made clear. There were several gripes on local forums, and no one “liked” the announcement of the split on Silver Star’s website. Big White mysteriously said nothing of the split, simply putting out the information on its own single-area pass. Both claim the separation will allow them to pursue their own identities and that they will perform better as independent companies. In the short run, though, the biggest beneficiary could be nearby Sun Peaks.


BEAN COUNTERS: IF YOU CAN’T BEAT ’EM...
It’s a common complaint: pleas for maintenance spending fall on deaf ears. And with aging infrastructure, especially in lifts, maintenance becomes more necessary every year. To help the non-mechanical among us get the point, Larry Smith, engineer with the Colorado Passenger Tramway Safety Board, compares lifts to cars. A fixed-grip lift with 40,000 hours on it, a common enough situation, has covered about 360,000 miles. How much maintenance would a car require with that mileage?

At the RMLA (Rocky Mountain Lift Association) meeting, Jeff Schmidt, GM at Red Lodge, Mont., took a different approach: he argued against trying to educate the boss, and instead urged ops managers to learn the language (numbers, profits) of the financial guys. For example, show that your request for maintenance dollars is not an expense item, but generates income and profits. After all, lift ticket sales are roughly half of all revenues, and comprise more than half of the profits. If the lifts don’t run, profits don’t flow. Schmidt noted that at Red Lodge a few years ago, new owners learned the value of maintenance when the deferral of same led three lifts to fail on opening day.

You need funds? Point out the profit-and-loss aspects of, say, sheave and gearbox maintenance. Remind the boss that maintenance and lift upgrades are capital expenditures that improve the asset base (that is, they make stuff more valuable; CEOs like that).

And learn Excel, he said. Explain costs, efficiencies, ROI, labor savings. Track the time and cost of inadequate training and maintenance. Prioritize spending in terms of regulatory requirements (gotta have), needs (should have), and wants (would be nice).

The subtext was that poor communication is something that both financial types and ops managers need to work on. And that means that each has to learn the language of the other.


OSHA WANTS TO SEE YOUR JHA
Among the many concerns resorts face, add OSHA to the list. In 2009, a government agency urged OSHA to increase attention to the amusement park and ski industries, and a patroller death at Jackson Hole gave OSHA reason to do so. Aside from helmet use, a topic OSHA explored following the Jackson patroller death, OSHA has prioritized fall protection, logging (including trail clearing), and chemical handling (new international standards take effect in 2013).

More broadly, OSHA is big on training, procedures, and documenting both of those. Job hazard assessments (JHAs) are a key piece of that, as they describe possible dangers and the mitigation procedures employees must take. OSHA requires JHAs for just about any work at the area, from food service to snowmaking. NSAA began compiling a database of JHAs two years ago to help resorts develop plans that suit their particular situations. The database shares JHAs created by larger resorts with smaller ones. This doesn’t eliminate the need for resorts to create their own JHAs, but cuts the time spent preparing them.

Remember, too, that OSHA expects employees to use the JHAs, which means training on them and documenting each and every job.


PEAK RESORTS JUMPS SKI NH SHIP
In a move reminiscent of Vail Resorts’ departure from CSCUSA, Peak Resorts pulled its membership from Ski NH, a state where Peak operates three resorts. At issue was the fact that one of the main budget avenues for Ski NH was the sale of lift tickets to the state’s resorts, a practice some saw as selling against resorts. Tim Boyd, CEO of Peak Resorts, said that Peak is more interested in a trade organization than a marketing one. For its part, Ski NH has been working on ways to lessen its dependence on those tickets, reducing the amount it would sell from 25,000 to 8,700, and to focus more on regulatory and legislative issues than on marketing programs. But, for Peak, it was too little, too late.


CONSOLIDATION IN SNOWMAKING
When TechnoAlpin, which has a significant 35 percent market share in Europe, acquired Johnson Controls Neige in April, several experts saw this as a major consolidation in the snowmaking market. While TechnoAlpin declared the two companies will continue to operate independently, the combination has a large market share worldwide (JCN claims 30 percent by itself). Coupled with Leitner’s acquisition of Lenko earlier this year and the merger of HKD and Turbocristal a year earlier, could the snowmaking market start to resemble those for groomers and lifts, where two companies dominate the world scene?