Issues that Matter Most

By April Darrow

As the country gears up for the presidential election, the ski industry is sure to be affected in a variety of ways. With not only a close race for the White House but all 435 House seats and 33 Senators up for re-election, mountain resorts and their communities should be prepared for Washington—and policies that affect their operations—to look a little bit different than it does now come November.

“When power changes hands, it has policy ramifications. And with close races and margins on all fronts, it’s not hard to imagine change coming to Washington, whether that be control of the House, Senate, or White House,” said Grant Colvin, public affairs consultant for the National Ski Areas Association (NSAA). “And it is going to be very tight. The people who cast the deciding votes in the last presidential election could be fit inside Michigan Stadium twice.” 

The core issues for our industry remain: workforce visas, climate change and public lands, taxes, and labor policies. 

Workforce visas. Ski areas use approximately 11,000 J-1 and H2-B visas annually for a variety of roles. Even as the industry has a long history and many success stories with these visas, the work of securing them is often complicated by the challenging politics of immigration.

While J-1 and H2-B visas are not immigration visas, “some lawmakers in Washington unfairly link them to the dysfunctional debate over immigration and border security,” said Colvin, adding  that “the industry works to combat this perception and remind lawmakers of the bipartisan support that these visas have long enjoyed.”

Labor. Ski areas are likely to see a difference in how a new Trump or Harris administration approaches employment issues. “It’s generally the case that Democratic administrations are going to emphasize the needs of workers, while Republican administrations put a strong focus on employers,” said Colvin. 

Under President Biden, for instance, the administration issued rules to boost overtime pay, ban non-compete clauses, and help facilitate unionization. A second Trump administration would be unlikely to support these rules and may seek to roll them back.

Climate and public lands. When it comes to climate,“We think the IRA presents a huge opportunity for the next Congress and administration, regardless of which party occupies the leadership seats,” said Colvin.

The Inflation Reduction Act (IRA) provides vital funding for a variety of climate-forward initiatives, including clean energy technologies and EV infrastructure development as well as an estimated $5 billion to fund forest management projects. Only an estimated 20 percent of grant money has gone out under the IRA, so the next four years will be more transformative in terms of climate policy. “NSAA, ski areas, and partner organizations will use our voices to make clear why these investments are important for climate, resilience, and the economy,” said Colvin. 

Additionally, with 127 ski areas operating on public lands, there remains a strong interest in strengthening the industry’s partnership with the U.S. Forest Service. “Ski areas are strong when the Forest Service is strong,” he added. “We’ll continue to work to secure additional resources to boost the agency’s recreation staffing, whether that’s through the bipartisan Ski Hill Resources for Economic Development (SHRED) Act, appropriations, or otherwise.”

Tax policy. There will be a tax debate next year regardless of the election outcome, said Colvin, given the upcoming expiration of Trump-era tax reforms. One expiring tax policy is bonus depreciation, which allows businesses to immediately deduct the price of infrastructure, equipment, and other purchases. Ski areas have used this policy to help finance chairlifts, snowmaking equipment, and other key items. It has helped spur “a sort of golden age of ski area infrastructure,” said Colvin. 

As a new tax package is debated next year, the future of the expiring bonus depreciation policy remains uncertain. “Ski areas will be advocating a continuation of the policy and will be interested in seeing it remain as generous as possible,” said Colvin. “If the current policy goes away or becomes less valuable, one can imagine resorts adjusting their capital plans. But every situation is different.”

Colvin encouraged mountain resorts to tell their representatives in Congress that they’ve benefited from the policy. “To say, ‘The industry has grown a lot in the last few years, and we’ve seen a lot of new infrastructure come in. Bonus depreciation has been a big part of that success story, and it can help create new economic opportunities going forward.’” 

“What’s fun about the ski industry,” he added, “is that we’re large rural employers and people have positive associations with the mountains, so we can provide a slightly different perspective on the big decisions before lawmakers. We are often the biggest employer in small places and the industry’s success is critical for our mountain communities to thrive. 

“Ski areas have a unique platform. If workforce visas are important to you, if EV infrastructure is important to you as a resort operator, or tax policies, we encourage ski areas to engage with their Senators and Congresspeople in Washington,” said Colvin. “Please know that NSAA is always here to support you in that outreach.” 

 

The Cost of Coverage

By Katie Brinton

Ski areas are between a rock and a “hard” insurance market, with reports of premium hikes, dropped resorts, and restricted coverage circulating.

“Everyone is in for a rude awakening when their renewals come up,” said one ski area operator already feeling the strain of a recent rate surge.

“I’m hearing from my clients that the rate increases are brutal,” said an industry vendor.

Where there’s smoke, in this case, there’s also fire.

“The hard market is certainly still with us,” said Safehold Special Risk resort and recreation program SVP of national sales Bill Curtis, who acknowledged that the company is pushing rates right now in response to increased exposure.

MountainGuard program manager Tim Hendrickson agreed that “it is still a pretty difficult market,” but said renewal rates in the company’s ski area program are the best they’ve been in years, particularly in comparison to a series of pre-Covid rate increases. 

“We are paying a lot more on claims,” said Hendrickson, “but premiums have been rising over the years to cover that.”

What’s Happening?

While we’ve been living in a hard market (characterized by higher premiums, stricter underwriting criteria, restricted coverage, and less capacity) for years, there are variations across lines of coverage.

MountainGuard has found the general liability market to be very stable, said Hendrickson, and workers’ compensation is flat, even soft. The property market is hard, however, and he expected the umbrella excess market to harden, too.

Excess leads to increases. “Insurers are pricing for penetration of the excess limit,” said Curtis, adding, “We saw a pretty significant change in [claims] outcomes pre- and post-pandemic, with a higher percentage of resolutions hitting that excess limit.” 

On the property side, wildfires and other increasingly extreme weather events have driven up the risk of catastrophic damage and resulting excess claims. (We explored this in some depth in “A Lot to Cover,” SAM, March 2022.)

Social inflation. While the liability market may be stable, it’s still a concern, said Brad Stanford, an ASDA attorney with Farleigh Wadda Witt in Portland, Ore. “I think the liability landscape is definitely less favorable to ski areas and businesses in general,” he said. “We’ve heard from jury consultants that juries are trending toward punishing corporations. Some jurisdictions are more plaintiff-oriented; often big urban areas—e.g., Portland, Seattle, etc. Mountain towns like Bend (Ore.) are more favorable to ski areas generally.”

While Stanford said some state cases have led to legislative changes favorable to ski areas, the general trend toward higher liability claims valuations and resolutions in U.S. courts, dubbed “social inflation,” has increased insurers’ exposure.

Even in Colorado, where the ski industry is well insulated from liability claims through the Skier Safety Act, judges and juries appear to be favoring plaintiffs. Consider the May 2024 ruling in which the Colorado Supreme Court found that liability waivers can be used to protect ski areas from some, but not all, negligence claims related to chairlift accidents. The decision has allowed a negligence per se claim brought against Vail Resorts—which had initially been thrown out—to proceed in the district courts.

“There is increased uncertainty about how a claim will turn out when it proceeds through the court system,” said Curtis. As a result, he said, “the appetite for putting out limits is down, and the cost for those limits is up.”

“The volatility (created by social inflation) is not good for insurance,” added Hendrickson.

Resort consolidation. Continued ski area ownership consolidation has exacerbated the situation as well, with large ownership groups that are self- or captive-insured pulling premium out of the pool as they add resorts to their portfolios.

“That’s my biggest fear,” said Kris Blomback, GM of Pats Peak, N.H., “that ski area ownership consolidation, which is removing a ton of premium from the marketplace, will force the insurers to retrench because they don’t have the revenue.”

It’s a numbers game, explained Curtis: More premium equals more tolerance for risk. “The smaller the premium pool, the higher the probability of exceeding your excess limit, even though your exposure is lower,” he said.

“The more you are able to diversify risk, that helps [reduce] premium swings,” said Hendrickson. “It can swing pretty quickly if we have a catastrophic loss, which impacts the carriers’ profitability. We have to keep the premiums right to keep the carriers interested in insuring the industry.” 

Cautious carriers. Not every carrier has the appetite for the exposure that comes with insuring ski areas. 

“Ski areas pay a lot of premium because of the risk,” said Hendrickson. It’s a matter of statistical likelihood, he explained, and while “most ski areas don’t have a lot of losses, we are a severity-driven industry. When we do have a loss, the impact is substantial.”

Summer operations. At Safehold, summer operations have changed how the program covers and underwrites certain lines of risk, said Curtis: “This is the area where we are seeing our more challenging claims.”

As a result, he said, “If you are a ski resort with a full summer activity program, you may feel a harder market because there is a higher risk with activities like mountain biking, zip lining, and aerial courses for an incident in which liability can be substantiated.” 

“In some summer activities, the duty of care is higher because they are ‘amusement’ activities; the assumption of risk is different,” agreed Hendrickson. 

“Each thing a ski area adds is its own risk, so we look at what is out there regarding that activity,” he added. “We are oftentimes learning as we go when ski areas add new [summer] activities. You need a really clear picture of the risk and rewards.”

“We want to see an investment in safety,” said Curtis about insuring summer activities—a sentiment that easily applies more broadly to one’s risk portfolio.

What’s a Ski Area to Do?

According to the 2022-23 NSAA Economic Analysis, “The expense line item that has increased the most across this decade is insurance (up 164 percent from 2013-14).” It is perhaps a balm to know that insurance “still represents a relatively small share (2.3 percent) of annual revenue,” according to the report.

Still, said Hendrickson, “we know it is hard for ski areas to absorb the cost of premiums.” 

So, what’s a ski area to do?

Higher deductibles. Pats Peak raised its deductible to reduce its rate increase, said Blomback, so that its liability coverage looks more like catastrophic coverage (a move not dissimilar to choosing a high deductible health insurance plan). 

As a result, Blomback is focused on mitigating the first-out-of-pocket dollars he might need to spend. That means ensuring things like liability releases and safety programs are strong.

Education and risk management. While an operation cannot help if it is in a high fire-risk area or a state that abrogates liability waivers, Hendrickson said, it can invest in education and risk management. “Ski areas have to control their controllables,” he stated.

Failure to do so puts a ski area at risk of losing its insurance. For example, said Hendrickson, “if you are in a high fire-risk area with wood shake roofs vulnerable to embers with no plan to manage that risk, that’s a problem.”

Ditto on the liability front. 

“A loss will ride with you for a long time,” said Hendrickson. “You don’t want to artificially create your own personal hard market.

“It is serious to lose your insurance, and [nonrenewal is] not a decision we take lightly,” he said. 

A variety of variables impact insurability: loss history, financial strength, reputation, and condition and age of lifts and property, among others, said Scott Brandi, president of Ski Areas of New York and a former AIG ski insurance program underwriter. “A high cost loss can happen at the best run resort and could jeopardize their ability to secure insurance at any cost,” he said, adding, “It is just a matter of time before the cost and or availability [of insurance] shuts a resort down.”

Limited options. With just two significant ski area insurance programs, it’s difficult for resorts to shop around. A dropped ski area (or one looking for a more affordable rate) is left to see if the other ski area insurance program has capacity and appetite to take them on, or shop on the secondary markets (which tend to offer high premiums for poor coverage with lots of exclusions, said Hendrickson). 

“It’s so critical to have strong liability programs,” noted Blomback. “You don’t want regular insurers underwriting the industry’s liability because they don’t know what they are doing.”

“Figuring out how to insure the ski industry is what we do,” said Hendrickson. “Being a partner with your insurer makes it easier to get through a claim.” 

A Ceiling

A hard market is often called a seller’s market, which suggests, accurately, that pricing power is mostly with the insurers (and carriers) in this climate. So, when will the market soften? There are a couple of possibilities.

Lower claims would help. “We are on the hard market path until the legal and social environment shifts,” said Curtis (to say nothing of the climate forces shaping property insurance). “The soft market comes back when there are less claims and lower outcomes.”

So might more competition. “There is a ceiling on the rate increase,” said Hendrickson. If insurers push too hard on premiums, the increase in profitability attracts new competitors to the market, the prices drop, and the market softens.

But insurance is market-driven, he cautioned. As the cost of everything (materials, construction, property, labor, injury) goes up, so too does insurance—and that’s not ski industry-specific. 

Ultimately, it is essential for both ski areas and insurers to double down on working together to ensure that education and follow-through on risk mitigation are top priorities. The alternative is one that neither insurers nor operators want to face.

SUPPLIER NEWS

 

 

NATIONAL SKI PATROL partnered with North American Rescue Dogs to reinforce mountain safety with canine support. 

RATNIK INDUSTRIES celebrated founder Ron Ratnik’s 90th birthday with a gathering of friends, family, and ski industry colleagues at Bristol Mountain, N.Y.

SODEXO LIVE! provided 40,000 meals at the Olympic Village as the caterer for the athletes at the Paris 2024 Olympic and Paralympic games.

ASPENWARE appointed Will Treves as its new CEO. 

LEITNER-POMA OF AMERICA opened a new $27 million, 130,000-square-foot manufacturing facility in Tooele, Utah. 

French industrial group MND opened a new 10-million-euro (roughly $10.5 million) cable transport production and assembly facility in Savoie, France. 

DOPPELMAYR USA will expand its Salt Lake City headquarters with the addition of a new facility that will nearly double the size of its existing building.

SNOW PARTNERS hired Dave Amirault as chief innovation officer for all its related businesses. The company was also named one of the Top Workplaces in New Jersey for the third consecutive year, and in the U.S. for the second year. 

Swedish locking and security systems manufacturer Assa Abloy Group has entered into an agreement to purchase SKIDATA from Swiss business technology firm the Kudelski Group. 

 

PEOPLE

In the West, Peter Disch was appointed VP of mountain operations for Heavenly Mountain Resort, Calif. … Whitefish Mountain Resort, Mont., named Gardner Beougher mountain operations director. 

In the Midwest, Vail Resorts named Mike Giorgio regional general manager, overseeing six of the company’s resorts in Michigan, Ohio, and Indiana.

In the East, Robert Drake was named president and GM of Gunstock Mountain Resort, N.H. … Paul Maitland was promoted to GM of Magic Mountain, Vt.

Cranmore Mountain Resort, N.H., promoted Tricia Garcia to director of resort operations, Brantly Ludington to director of mountain operations, Kelly Hunt  to sales and events director, Ben Siwak to facilities manager, and Robert Bray to assistant facilities manager. VP of operations Glenn Harmon and properties and facilities manager Mark Gorveatt retired. 

Michael Mendrick will serve as the interim CEO of PSIA-AASI following the departure of CEO Peggy Hiller.

 

AWARDS

Colorado Ski Country USA awards: Emily Moratta, Patroller of the Year; Marc Fernandes, Instructor of the Year; Scott Mackie, Terrain Park Specialist of the Year; Amy Geppi, Food and Beverage Professional of the Year; Micah Schulman, Snowmaker of the Year; Louis Miller, Snow Groomer of the Year; Bill Henke, Guest Services Professional of the Year; Micki Hackenberger, President’s Award; and Sen. Dylan Roberts, Chair’s Award. 

Among the North American Snowsports Journalists Association award winners are: Cindy Hirschfeld and Moira McCarthy, Harold S. Hirsch Awards of Excellence; Bill Danner, the Carson White Snowsports Achievement Award; and Emily Summers, the Bob Gillen Award. 

Ski Utah’s inaugural Yeti awards: Jeffrey Sanich, Back of House, Food & Beverage Professional of the Year; Steffan Eklund, Front of House, Food & Beverage Professional of the Year; Steve Wakefield, Groomer of the Year; Alexis Croce, Guest Services Professional of the Year; Greg Solberg, Instructor of the Year; Skyler Bair, Lift Mechanic of the Year; Dan “Cowboy” Lind, Lift Operations Professional of the Year; Quinn Case, Parking Attendant of the Year; Mikey Ericson, Patroller of the Year; Jake Schoenfeld, Snowmaker of the Year; Michael Dennett, Terrain Park Groomer of the Year; Pascal Begin, Chairperson’s Award; Tom Kelly, President’s Award; and Jeffrey Gelder Lewis, Member of the Year. 

The Colorado Snowsports Hall of Fame inducted Ross Anderson, athlete; Bjorn Erik Borgen and John McBride, sport builders; Sigurd Rockne, pioneer; and Lindsey Vonn, athlete. Among its annual award winners are Kent Erickson and Barbara Krichbaum, Lifetime Achievement; and the National Sports Center for the Disabled, Top of the Hill.

 

OBITUARIES

Pat Boyle died on July 5, 2024. Pat started in the western Canada ski industry at Fortress Mountain, Alberta, in the mid-1970s before moving on to Big White, B.C., where he began working with lifts. He took his skills to Apex Mountain, B.C., and eventually joined Poma America. He spent more than 35 years leading the crew of Leitner Poma Canada’s western division, managing several lift installations in the region and contributing to sales, service, and parts for the company.

The former owner of Cascade Mountain, Wis., Philip Walz, died Aug. 9, 2024. Phil, who also ran his own plumbing contracting business, purchased Cascade in 1977 with his wife Adele. They immediately began investing in the hill, and operated the ski area until 2006 when their son Rob and his wife Vicki took over the family business.