An Answer for Sen. Haskell
“Imagine that this hearing room is a mountainous region with terrain developable for skiing. Imagine that I am a permittee right here with an established ski facility. Imagine that over there where you are sitting is a potential ski resort site. Now, do you feel that I should have the inside track on getting the Forest Service permit for developing the new resort, or do you think that the permit should be issued to a different, but nonetheless qualified, developer?”
In this, as well as in follow-up questions, Senator Haskell demonstrated his concern for what he considers to be the “monopolistic” situation in some ski markets, as typified by the Aspen case where three of the four distinct ski mountains (Aspen Mountain, Snowmass and Buttermilk/Tiehack) are operated by the Aspen Skiing Corporation, and where the fourth, Aspen Highlands, traditionally follows the pricing patterns of the others.
We don’t think that either witness gave the Senator a strong answer. Without the pressures of immediate response faced by the witnesses, SAM would like to give its answer to the Senator. We would like to remind him of four economic facts of the ski world in which we live.
1) The logical permittee for Senator Haskell’s hypothetical question is the owner of the private land at the base of the mountain on which the Forest Service land is located. Provided, of course, the owner is qualified as a permittee.
2) Historically, Aspen did indeed develop with local competition. There was Whip Jones with Aspen Highlands and there was Friedl Pfeifer with Buttermilk. Today there is a renewed application to develop Little Annie — a totally separate area.
3) The Aspen Skiing Corporation is in the business of attracting visitors from California, the Plains states, the North Central states, the East and so forth. They compete with other destination resorts in Colorado, Idaho, Utah, Wyoming and New Mexico. It is difficult to construe a monopoly, real or potential, out of a marketing situation like this. To say that it is monopolistic with respect to serving the resident Aspen skier is like saying that Hershey Chocolate Company enjoys a monopolistic advantage in the Hershey, Pa. market.
4) Given today’s very proper safety and environmental constraints, and given today’s construction costs, neither the skier nor the Senator should be looking for inexpensive lift tickets. The basic VW-model ski facility, stripped of costly non-essentials, is still going to require a much higher lift ticket price than any of us would like. A pity, but true. The pursuit of happiness may be an inalienable right, but if happiness is a five dollar lift ticket then the pursuit is about all you’ll get.
We think Senator Haskell will inevitably come to the same conclusion that we have: there are no lift tickets around that are high simply because of monopolistic situations. It is perhaps good politics in Colorado to tilt against this dragon, but in the real world the dragon is about as scarce as hen’s teeth.
We hope that Senator Haskell will not be sidetracked by the perennial and colorful confrontation between town and ski corporation in Aspen. While undeniably interesting, it does not exactly illuminate or elucidate the ski world at large. The industry has had to spend quite a bit of time and money getting a United States Senator educated in ski area economics. We have had plenty of skiing congressmen and senators, and now have a skiing president. But with Haskell we have a prominent legislator who has had the interest to research and try to understand our industry. We think this may yet prove to be a great asset.
A SAM Editorial
Methods of growth — a debate
The Speak-out columns of SAM provide an in-family place for different opinions to be aired. When we learned that suppliers were being critized—unfairly, we thought—for attempting to develop the parks and recreation market, we put our thoughts down on paper, and then asked NSAA to circulate them with the hope of eliciting comment. We print our thoughts plus the uncut responses.
In October, 15 suppliers to the ski area industry engaged in a joint marketing effort. The purpose was to build business—to sow the seeds for business that might be stimulated some time in the future.
The principal element of the program was a booth at the 75th Congress of the National Recreation and Parks Association in Dallas, Texas. The booth, pure and simply, sold skiing. The theme of the display was “Skiing—it’s for everyone,” borrowed for the occasion from the Eastern Ski Areas Association.
The purpose of the effort was to plant the idea that, 1) skiing should be considered for the recreation mix offered by park and recreation executives; 2) that skiing is a great sport that can permit effective counterseasonal use of existing public lands; 3) there are answers—many of them available right at the booth—to most of the technical questions about snowmaking, lifts, safety, insurance etc.
In a modest way, the effort was successful. A fair number of the 7,500 convention registrants came by, a lot of questions were asked, contacts were made, leads were passed on to the participating suppliers and a ski presence was established in this market. Another important benefit for the ski area suppliers was to get the feel of this association and its trade show so that the strongest possible presentation can be made at its next year’s convention in Boston.
The underlying strategy is to stimulate the sport by creating new skiers. The commercial ski world has recently been spending tens of thousands of dollars on all sorts of projects to promote skiing. This is good, and hopefully will be productive. The ski suppliers’ program, though involving no such large sums of money, is designed to do the same thing—to broaden the base of the sport and create new skiers.
Bring skiing to the public where the public is—in the urban and suburban centers of population. A small hill on a golf course, a modest slope or nice touring trail in the park. It doesn’t take much. Get the kids out. Make is possible for them to ski in their school recreation programs. Have night skiing for the family. Get the housewives out. Organize ski clubs. Organize ski trips to bigger ski hills. . .organize ski vacations in the mountains.
This is the sort of thing that is already happening in all sorts of places, as was pointed out in a letter from Pat Pugh to the Editor in the Fall issue of SAM, where she described the creating of new skiers in “our midlands area of Nebraska, Iowa, South Dakota and Kansas.” She points to the “mushrooming of skiing in existing parks and public lands,” and she also points to the resourceful way that the “Ski the Rockies” marketing people came in and built business among the flatlanders who had taken up the sport after being introduced to it at the local parks.
But the surface has only been scratched here. Consider Europe’s snow belt where every little town has its small T-bar or Pomalift serving a small hill in town or on the outskirts. Consider how, a few years ago, tennis courts were to be found only at country clubs and summer resorts; and how today the sport is booming—not because people are introduced to it at a resort, but because they get exposed to it at home. Consider how many kids would play basketball if they had to go 150 miles or more to even try it.
This, then, is what Ski Area Suppliers Association had in mind when it embarked on its program of awakening parks and recreation officials to the possibilities of skiing. Predictably, but nonetheless disappointingly, the program has met with opposition from some ski areas who see themselves threatened competitively.
We are not inclined to argue the merits of public funding of ski facilities. This is an old and complex issue—as old as New York’s Whiteface, New Hampshire’s Cannon Mountain or Denver’s Winter Park, and that makes it just about as old as skiing itself in this country. And besides, we don’t think it is germane.
We are as opposed as anybody to unfair competition, and we don’t like the idea of the private ski area being hurt by a public facility. But we have to wonder seriously whether or not the dangers have been exaggerated in the past. The new skiers created by Duluth’s Spirit Mountain, for instance, appear to be quite a boon to the very ski areas that took legal steps to prevent some EDA funds from being used in its construction. That litigation was characterized by one of the litigants at the time as “being for the principle of the thing.” We, too, can applaud the principle, but we cannot afford to act on it against our best interests and against the best interests of the industry we serve. That’s called cutting off one’s nose to spite one’s face.
The ski industry needs growth. It needs new facilities and it needs expansion of existing facilities. The no-growth faction of the environmentalists has effectively road-blocked much of this needed ski area growth. But a proposed wire rope tow on the 17th fairway hasn’t yet brought down the batteries of Sierra Club lawyers and tufted titmouse watchers. The small “breeder” areas can still be built.
Another point should be made to those of our ski area friends who are concerned by the suppliers’ objectives. There hasn’t been a whole lot of ski area equipment purchased recently! What marketing director worth his salt will not get up off his rear end and develop new markets when his existing ones dry up to the point of putting his firm out of business?
Frankly, we applaud and support what the ski area suppliers are doing. We think it is good for the whole ski industry because it is a growth promotional program with leverage. Ski movies may or may not create skiers; but there is no doubt whatsoever about what happens when a ski facility comes into existence next to a population market: skiers are created. . .families of skiers are created.
It should be remembered that suppliers are trying to make the market grow; they are not espousing any one type of funding for new ski facilities. All sorts of different types of funding can be involved: there could be a concession operation, there could be local venture capital with local banks, there could be some matching federal funds, there could be EDA, REA, BOR and all sorts of other participations depending on locality, eligibility and need. That’s not the point, and there’s nothing we could do about it if it were. The point is that if there is a potentially viable ski area possible in a location that will bring the sport to a population grouping presently undeveloped by skiing, then for heaven’s sake let’s encourage it. Instead of worrying about Skier Jones who may opt to ski locally a couple of times instead of skiing at your mountain 1½ hours away, why not make plans to market your better product to all the new skiers that the new ski facility creates? The municipal swimming pool never kept anyone away from the seashore and the lakes!
Let’s think big and let’s not try to keep the market from growing—if only because it usually doesn’t work. Negative marketing will always lose to positive marketing. We hope that every area will keep a lively interest and an open mind with regard to all types of ski industry growth programs.
From Philip T. Gravink
Peek’n Peak
With the Ski Area Suppliers Association just back from its first participation and the Congress of National Recreation and Parks Association in Dallas, be prepared to hear a revived group of theories on how the piece of cake we call success will be bigger and sweeter if we promote every municipality into the ski business. The theories seem to go something like this. Allow the municipalities to be the bottom layer of our whole industry cake. They on some silent signal hand the skiers over to the local ski hill, who on some signal hand the skiers over to the weekend resorts who ultimately hand them to our few great mountain resorts and we all make a ton of money thanks to the municipalities who thought it would be a good idea to use their golf course with a modest ski facility built with public funds.
I, along with several other New York State operators showed up at Seven Springs with a similar “bigger cake theory”. We called ourselves “Ski Incubators” and pressed the point that we were the bottom layer of the cake and should have some special consideration on how we divide the cost of a “Glendinning type marketing program”. The idea had merit, but none of us found an area operator at Seven Springs from the biggest to the smallest that couldn’t demonstrate that he too was an “incubator” to a city that he was close to or by the ingenuity that he and the would-be skiers had put together to get that beginner on this hill or mountain.
Thus, quickly the whole neat picture (like a layer cake) of stratification of the skier on the basis of experience, breaks down. Only the skier will decide where he wants to learn or do all his skiing for that matter. I think the Ski Area Suppliers must realize that not many of the area operators, their traditional customers are going to believe in those nice neat stratifications either.
You cannot expect the bureaucrat to be immune to the competitive forces and the desire to grow. He will not stay neatly in his own layer any more than you can expect the private operator to.
When you start coming down to cases of spending public tax dollars which the private operator helps provide, to develop facilities in competition with those that each one of us individually are already struggling to pay for, each of us will take our turn leading the opposition while our “piece of cake” erodes away.
Find a city in snow country that doesn’t have a private operator at least aspiring to serve that beginning skier market and I’ll buy the municipal theory. The proponents must decide whether they want to see private operators get stronger or let municipalites “take the cake”.
From David L. Carto
Snow Trails, Ohio
As an operator of a small, “metropolitan” ski area, I would like to express my displeasure and concern in regard to the active solicitation of the Ski Area Suppliers Association (SASA) to public recreation authorities. In the simplest terms, it’s a matter of encouraging unfair competition.
But further, it’s a question of political philosophy. Is SASA for — or against — free enterprise? Capitalism? Fair treatment to the small businessman? Is SASA going to ignore the opposition of its present customers who operate near metropolitan population centers?
As businessmen, we ski area operators are not oblivious to the inefficiency of government operated services and the attendant waste and occasional corruption. The losses of operating a public recreational facility are inevitably borne by the taxpayer. And we are all taxpayers.
A comment by one of my compatriots, Bill Staley, who operates a facility even smaller than ours called “Sugar Creek” in Southwestern Ohio is telling. He said, “you couldn’t pay someone to do what I do.” His point is that if a similar facility was developed and operated by a government entity, the costs would be considerably higher. In addition, we pay Federal Income Taxes; state income and property taxes; local real estate and income taxes and all kinds of license fees, etc.
Professor Irving Kristol of New York University, writing in the November 13 issue of The Wall Street Journal, stated the problem very lucidly. He says, “a whole new class of forgotten men has emerged. Like his counterpart of yesteryear, today’s forgotten man is a fairly respected and well-regarded citizen. No one is leading a crusade against him, and it is probable that no one really wants to. He is merely being chivvied, harassed, ruined and bankrupted by a political process that takes him for granted and is utterly indifferent to his problematic condition. I refer to the small businessman.”
To put the proverbial show on the other foot, how would you like it if the United States Forest Service decided to expand its “services” to its publics by publishing a monthly slick magazine for ski area operators on “their” land and accept advertising from ski area suppliers? I can hear the screams of “unfair” and cries of “government interference” coming from North Salem now.
In the same vein, the big mountain, destination resort ski operators are not opposed to the concept of creating new skiers in the “breeder” metropolitan resorts, but would get into high gear in opposition if the Forest Service or the State of Colorado decided to develop from public funds a mountain skiing complex along Interstate 70 not far from Lake Dillon. It all depends on your perspective.
Finally, you say that to develop a modest ski hill on a public golf course doesn’t take much. If it doesn’t, then either we’re all wrong or SASA is wasting its time romancing the public recreational market. The truth of the matter is that the ski industry has passed the “ma and pa rope-tow” age and is a sophisticated industry with vital management talents in short supply and safety standards just now being fully recognized. There’s no place for the little tow on the back hill, if you’re talking about good safe bindings that are properly adjusted, good boots that fit and good instruction that gets a beginner properly introduced to the sport; not to mention lift, snowmaking and grooming operations.
If SASA wants to broaden their market base, they might well spend their time and efforts promoting skiing to the public in general along with NSAA and SIA. If there are skiers, free private enterprising businessmen will find a way to provide the facilities, buy the necessary equipment, and pay taxes for the privilege of doing so.
From Channing B. Murdock
Butternut, Mass.
Having grown up in a suburb of New York as practically the only kid in his school who was crazy about skiing, and now an owner of both a Metro area near Hartford and a Day Hop area in the Berkshires of Massachusetts, I would like to comment on the issue of municipal ski areas.
I am aware of a relatively strong negative reaction among some ski area operators toward encouraging this sort of development, due to the rather frightening implications of publically financed recreational areas competing with private enterprise. I acknowledge the problems which already exist, especially in New York and New Hampshire due to the imbalance of public vs. private areas. However, I believe that we should consider small “feeder” areas located in urban centers as a terribly important and most needed source of new skiers, rather than a threat to our industry.
In the past few years I have been involved with at least a half-dozen ski clubs and town recreational departments in an effort to help them lay out and develop small ski hills for their communities. By “small” I mean just that — designing tows, slopes, snowmaking, lighting and parking facilities for slopes not exceeding 250′ vertical. Now in all truth I find it difficult to imagine any professional ski area operator taking exception to this sort of exercise. Yet this is all that we need in urban areas to generate an enthusiasm for skiing which could become a strong basis of this industry’s future growth.
In the Parks Department type of operation, slopes of 5 acres or less are entirely adequate, and the rope tow is far from passe. I fact wire or fibre rope tows have been the most logical uphill transportation available. They are inexpensive to own and operate, and when run at slow speeds can be as reliable, safe and attractive to new skiers as our most sophisticated uphill transportation. Also on these small slopes an easily operated snowmaking installation can be relatively inexpensive to install. Combining this with night parking and a well run beginner’s ski instruction program, the local park or golf course operation can crank out one hell of a lot of new skiers.
Obviously those who become interested in skiing at these facilities will not remain true to “Home Town Hill” forever. They will invariably experiment with nearly privately run Metropolitan and Day Hop areas, and if they are offered the proper ingredients, new and dedicated skiers will emerge who will benefit the entire industry.
In the past while working with communities interested in these projects, I have found a need for simplified, less expensive mechanical equipment. To date only a handful of suppliers have approached this market, and I do feel that all of our suppliers could investigate the needs of the mini areas and possibly develop more modest equipment for them.
We are all looking for new skiers. Well run community facilities throughout the country could do more for the growth of skiing than all of our marketing efforts combined.
From C.J. Dover
Brandywine Ski Center, Ohio
I am dismayed and appalled at reports that the Ski Area Suppliers Association is encouraging government organizations to convert their tax-free land to ski areas — in competition with private, tax paying enterprises like my own.
I am hereby notifying the several major suppliers I do business with, that I will promptly stop giving my business to any supplier who directly or indirectly supports such a selfish, short-sighted position — and further that I will personally organize a boycott by other ski area owners of any such suppliers.
Finally, I am asking my own trade association (NSAA) to take immediate action to condemn publicly and without qualification any such politically-naive scheme.
People who want more government in private enterprise are ignorant of the story of the camel with his nose in the tent.
From Walter T. Stopa
Wilmot Mountain, Wisc.
The following interesting letter was not part of the response to the suppliers, but to an earlier editorial in SAM. Being on the same general subject, we decided to run it here.
In your Summer 1975 issue, in the Speak Out column you did real well until your “thirdly” paragraph. There you went down the same hill that most destination areas have been sliding. Many somehow feel that the sole reason for “urban” ski areas is to provide fodder for them. It may surprise many to be told that some urban ski areas look upon remote mountain areas as vultures who do nothing to develop new skiers but pounce down upon the markets developed by others. This is the chief reason so many urban areas lack interest in the NSAA which they (unjustly) feel is dominated by big business.
Actually both kind of areas have a symbiotic relationship and each one can prosper best if the other is also solvent.
We, as an example, do not appreciate your suggestion that tax supported entities go into the operation of ski areas in competition with privately developed ones. Your proposal is a questionable position to take since the logical extension is for the federal government to develop and operate ski areas on federal forest and park land at low prices. I don’t think you will earn many brownie points from the big mountain areas if this trend is promulgated. Of course the latter is more logical, considering that most big mountain areas operate under lease on the public domain while urban areas nearly all operate on private land on which they pay ever increasing high taxes. Perhaps as a starter you should suggest the areas on “Forest” land pay a tax on the public land they use, as though it was owned by them, at rates per acre compared to average tax rates payed by urban areas. Imagine the hue and cry from those who are now hoping, like you, for government to get into the low price ski business on “urban” park and other recreational tax supported land.
Many of the successful urban ski areas were in existence long before most of the mountain ski areas were even dreamed up, and owe nothing to them. Rather it’s the other way around. It is high time the mountain areas, and others like you, did more to foster profitable, privately developed, local ski area operations, since that is the only way to create a spin-off skiers who will look forward to vacations at destination areas and have the necessary wherewithal.
Let’s face the fact that those who may be enticed to ski because it’s cheap, are not likely to be prospects for mountain vacations at current rates, or for that matter aren’t the best prospects even for privately operated urban areas. PRobably the least understood condition is that most urban areas already charge very much less for weekday and evening tickets than their basic weekend rates. The spread is often a reduction of 50 per cent. The various “two for one” schemes, “bottle cap capers”, etc., are obviously doomed to fail because another 50 per cent reduction is ridiculous.
Our knowledge of problems faced by metropolitan areas is limited to the midwest. Metropolitan areas in the East especially near the Boston-New York-Washington megapolis obviously face different circumstances, while the West coast possibly has no metropolitan areas at all comparable to ours in the Midwest, and even here the metropolitan areas vary in size from one rope tow operations with no shelter to areas such as we see at Seven Springs and Boyne.
In the Chicago-Milwaukee metropolitan area, half of the ski areas, which at one time were in existence, have ceased operations, either because of low profits, bankruptcy, or because the land could more advantageously be used for real estate development. Unhappily much of the very limited skiable terrain is gone forever. The failing operations were based on rope tows. The remaining areas have successfully gone the chairlift and glamorous lodge route and are less interested than ever in developing skiers at low prices for the benefit of remote areas. Immediately, there are enough skiers for everyone.
From a long range standpoint, as more destination areas come on stream; and, if disposable income doesn’t increase, there are real future problems to ponder about. Making urban areas the goat is not the answer. It will be interesting to see what effect the development of Spirit Mountain near Duluth has on the existing areas in that vicinity, and whether Spirit Mountain will charge fees sufficient to pay off the multi-million investment, interest and operating costs plus profit. So far we have haard no cheers from the private areas up there.
Upon reading the above letter I realized the problem of classifying ski areas leads to some confusion; for example, we consider ourself a day area and an urban area, yet to some of our customers who come from hundreds of miles away we are a destination area. Certainly Sun Valley is a prime example of a destination area, but many high mountain areas thought of in the same way, such as Vail, Park City, etc., are really urban day areas, for the nearby large cities. Perhaps you can help establish classifications so as to eliminate frequently encountered confusion.
