A Response to Your Open Letter
Due to space constraints, we were unable to print David Crowley’s letter in its entirety, but invite you to see the uncut version on our website at www.saminfo.com, in the news section. —Ed.
I am writing in response to your open letter in the July 2004 SAM. As always, I respect SAM’s role as an independent voice in the industry and I appreciate your willingness to voice your concerns on the future of NSAA and the industry. At the same time, I respectfully disagree with your opinion that the leaders of the industry have “dropped out,” and are not providing sufficient direction for the association. In my view, many of the leaders of the industry are actively serving as NSAA’s board of directors. Although we are indeed busy people with many obligations, we are willing to volunteer our valuable time to serve the industry and provide the leadership and direction necessary for a successful association.
NSAA has launched a number of significant programs in recent years, such as Heads Up, Lids on Kids and Smart Style and the board has been instrumental in developing these important initiatives. As Chairman, I can say unequivocally that the board is fully supportive of the current direction of the association.
There is no doubt that increased member participation would foster more dialogue and benefit our industry. Increasing member participation in the organization is a top priority for NSAA. While you attribute lower participation levels to the “complacency” of members, I think the answer is a bit more complicated. Consolidation and, more importantly, technology have affected participation and attendance levels at conventions and meetings. NSAA is now able to communicate with its members with a level of sophistication none of us would have dreamed of just 10 years ago. NSAA constantly imparts valuable information through its website, publications like the Journal and Capital Watch and email.
Finally, your comments on the reserve fund deserve a reply. The board of directors has determined that our reserve fund of approximately $1 million is appropriate and necessary for a strong and financially sound trade association. Considering its shaky financial condition just over a decade ago, NSAA should be proud of its reserve, which at approximately $1 million, essentially represents a six-month operating fund; many organizations have reserves to cover a year’s worth of expenses.
Thank you again for sharing your opinions and comments. I look forward to working with you, the NSAA board and staff and the rest of the membership in facing the future challenges of the industry.
Clarifying the Numbers
by Nolan Rosall
President, RRC Associates
We wish to clarify some issues surrounding the NSAA skier-visit numbers which were the subject of your article, “Numbers, Numbers” [July 2004] as the article questioned the accuracy of certain numbers the ski resort industry relies on heavily, including the figure for the total U.S. skier/rider visits.
Your article focused attention on the growing importance of season pass usage and the related potential that exists for over-estimating national visits as a result. You raise several legitimate questions, and we recognize that others in the industry have similar concerns. However, we have already incorporated procedures as part of the Kottke report which provide as precise a measurement as possible.
Your article questioned the average of 18 uses per season pass among those resorts that estimate their season pass usage. You posit that the season pass multiplier should be about 14, not the Kottke average of 18. Although the preliminary Kottke report didn’t state this, that figure of 18 visits per pass does not represent an actual calculation of the average season pass usage, but is a figure reported to NSAA by the areas. This number mostly reflects usage of full-price, all-access passes only.
To help areas report their visit totals accurately, three years ago, NSAA and RRC Associates redefined the calculation for season pass visits in the Kottke survey. Prior to that time, the guidelines suggested an average of 24 days usage per pass. The new Kottke guideline states, “To estimate, first determine your resort’s effective ticket price by dividing total non-season pass ticket revenue by total non-season pass skier visits. Then divide the price of the pass product by your resort’s effective ticket price. This will result in an average days per pass product. Multiply the average days per pass by the number of passes sold for an estimate of the skier visits generated from that pass product. Repeat for each different pass product at your resort.”
While somewhat cumbersome, this guideline recognizes that resorts offer differently priced season pass products. Indeed, many resorts utilize this formula.
Other evidence supports the Kottke numbers.
- Among resorts that estimate their season pass usage, the percentage of season passholder visits is lower than for those resorts that scan or track season pass holders (27.4 percent versus 30.5 percent). If resorts were over-estimating season pass usage, we would expect the opposite.
- The NSAA National Demographic Survey, which interviews 124,000 skiers at 79 areas, indicates that season pass holders accounted for 28.1 percent of total skier/rider visits nationally, very similar to the Kottke estimate of 29.1 percent. Furthermore, the Demographic Survey includes a large number of resorts (33) that, in their Kottke survey, indicated estimating season pass usage. At these resorts, the average share of visits attributed to season pass holders was 24.6 percent, also similar to the Kottke findings.
RRC Associates strongly supports your efforts to highlight the need for more accurate information. Given the observations above, though, we believe the Kottke total skier/rider visit number provides an accurate estimate of annual visitation.
Mr. Kahl replies: I stand mostly corrected. There’s still room for error, since the Demographic Survey counted 24.6 percent season’s pass usage at areas that estimate passholder visits, while such areas estimate 27.4 percent. That suggests a possible overcount of 750,000 on a national basis—less than I projected, but not insignificant.
