Ski industry does well in a bad national economy

What the national economy takes away Mother Nature gives back. This would seem to be the state of Vermont's ski season this year. While the recession roars through the winter, the state's ski industry reports relatively high skier visits and few apparent downward economic effects from the recession. Those in the industry, either at the Alpine ski resorts or the Nordic areas, say this is one of the best ski years on record. They attribute their good fortune primarily to lots of snow and very little rain or thaw. Also, they contend, the bad economy is keeping their skier base, located primarily in New England and New York and New Jersey closer to home. Fewer skiers, they say, are flying to Colorado or Utah for a winter ski vacation choosing instead to remain in the region skiing Vermont trails and slopes.

All this is good news for the balance sheet at the ski areas at a time when real estate sales at the mountains are in the doldrums. It is also a bright spot for state tax coffers as the steady stream of rooms and meals tax revenues somewhat mitigates the budget crunch felt by Vermont government.

Greg Gerdel at the Department of Tourism & Marketing looked at preliminary numbers in early February from tourism in the state this fall and early winter. Figures for October posted January 23 “show room rentals off just .01 percent and meals receipts down 1.1 percent in comparison with October 2007,” he said. Thus, tourism was basically flat for the period and October is a significant month.

Meals and rooms revenues posted for December collections was up 16.1 percent and for the fiscal year to date, said Gerdel, “was down a relatively modest 1.9 percent, considering the general downturn of the economy.”

January meals and rooms shows revenues were down 15.5 percent but these are preliminary figures awaiting an April report.

Another indicator of tourist activity is the Agency of Transportation's traffic count an electronic measure taken at roads near several ski resorts around the state. At Stowe for December on average for weekend traffic, the count on Vermont Route 108 was up eight percent. In Wilmington, where Mt. Snow is located, and in Ludlow at Okemo Mountain in December traffic counts were even with the previous year.

Killington's traffic count was off nearly two percent on weekends while Mad River Glen, Sugarbush and Bolton Valley were off about three percent. Ski area operators say traffic counts can be misleading as they are seeing more car-pooling among skiers.

Gerdel said figures from the state show for “any period through the end of 2008 the statewide car number average has been down four to five percent but the other measures for tourism as of fiscal 2008 ending July 1, including room receipts, were up 9.6 percent.

“It's premature for hard numbers on the ski season,” said Gerdel, “but anecdotally good snow conditions since January certainly held up and the weather component has been strongly in our favor.”

Vermont's seemingly healthy ski season does not go against national trends and figures from the National Ski Areas Association indicate that the economy does not appear to have had a harsh effect on the ski industry. In January NSAA issued a press release saying, “that skiers and snowboarders continue to hit the slopes in strong numbers despite current economic conditions.”

A nationwide ski area survey NSAA conducted revealed, “that skiers and riders showed up in numbers similar to last season's Holiday period, and in some cases, in record numbers. Some resorts are reporting visits up 40 percent over last year's Christmas Holiday period.”

NSAA in October surveyed skiers and snowboarders and found the total number of days they intended to ski is on pace “with last year across every region of the country.” However, people said they would ski closer to home and would “seek out more affordable lodging options and reduce the amount they spend on food and beverage during their trips.”

Whether the industry can meet last year's all-time record 60.5 million skier and rider visits remains to be seen.

Reports from Vermont ski areas and the Vermont Ski Areas Association tell the story of an important sector of the travel and tourism economy that has been blessed by excellent snow conditions for most of the first half of the winter.

“What we have seen going into the season and so far is the adage that great snow trumps a bad economy,” said Parker Riehle at VSAA. History has shown that “in prior recessionary times in our history when there is a great snow year the ski industry in Vermont and nationwide often holds up very well.”

As he explains, skiing is a lifestyle sport and a family activity. “It appears to be recession resilient, not recession proof.”

What seems to be driving this year's healthy ski season, said Riehle is a public that is “foregoing their annual ski vacation out west and foregoing airline dependence to another resort area and instead are driving to Vermont.” Vermont, he notes, is within a day's drive of 80 million people among that number are a lot of skiers.

People are skiing closer to home because of the eastern state's advantage over far western resorts in lower expenses, less travel uncertainty, and not having to deal with an increasingly inconvenient airline industry. Also helping Vermont ski areas this winter are gas prices considerably lower than last winter's when skier numbers were also high.

Riehle, too, has been digging through meals and rooms sales tax numbers and for November the ski areas were ahead of a year ago. A guesstimate for December, he offered, would show numbers at or above last year's levels. January, he noted, has finished strong despite the week before Martin L. King weekend, which was very cold and “knocked visitation back a bit for that holiday period.”

Based on available indicators the very important Presidents Week period, which normally accounts for 15 percent of ski season lift ticket and room sales, “looks favorable.”

As of mid February Riehle could predict “with February and March if we end strong we could well be looking at a season that is in line with prior good years, perhaps not as good as last year but better than the previous to that.”

For the 2007-08 season Vermont had 4.3 million skier visits. Direct spending topped $750 million with $700 million in indirect spending for a total economic activity due to skiing of about $1.5 billion.

A Survey Of Ski Areas Around Vermont

Generally speaking, ski areas in Vermont from north to south are pleased with the first half of the ski season.

“This year we've had more weather challenges early, Christmas week was not a good weather week and day skier traffic was off, but destination vacation business was good,” reports Bill Stenger the owner of Jay Peak Resort and chairman of the VSAA.

While January had good snow, extreme cold on some weekends did cut skier visits with an impact of 15 percent to 20 percent fewer day skiers.

Stenger reiterated what Riehle said about the economy and skiing. “Good snow and good conditions makes for how we are doing.” That said some skiers are economizing by “brown bagging their lunches.” This, he conjectured, was because “they want to ski affordably.” Also important at every ski resort is the quest for low price lift ticket deals. What skiers are doing this year, said Stenger, is “conserving but not giving up skiing.”

Jay Peak is giving Vermonter discounts, while Canadians pay at par for lift tickets. The resort has grown its television advertising budget and like other ski areas it is spending more on marketing and advertising especially to the Canadian radio market and the destination Boston area. Its ads are frequently seen on local TV stations as it focuses on its core markets.

Anecdotally, Stenger said western skiing “is down perhaps as much as 25 percent due to price and the hassle of flying.”

As the chair of the VSAA, Stenger speaks for his industry. “The message is the same everywhere and what the impact has been. Economic stress will be with us for years. We'll need to be lean and efficient and offer the best product. You'll see efficiencies not seen by the customer.”

Ski areas have benefited by this winter's lower fuel costs. At Jay the trail grooming budget would have doubled if prices had stayed at levels seen last summer.

“We are certainly a bit behind last year in terms of paid skier days by about 20 percent,” said Josh Arneson at Bolton Valley Resort. “But we are finding when conditions are good and weather is nice we are seeing more people than expected.”

December was not up to expectations here but January was much better. Cafeteria spending is down some, he noted. The ski area has several lodging packages aimed at drawing more customers and indications are that bookings for Presidents Week are ahead of last year.

The ski area relies on an email newsletter and snow report as well as online photo gallery along with print and radio advertising to promote itself.

Arneson is hopeful for the rest of the season. “If things stay the same we would be behind but we hope to pick up the pace for the rest of the season.'

“Considering the economy we are doing very well,” said Peter Dee at Bromley Mountain near Manchester Center. The high price of oil in the fall, when most seasons passes are sold, helped “a lot of people decided to stay east instead of going west.”

Dee was emphatic about the ski business. “Our business is snow, we're all about snow, and we're more married to weather like a farmer is rather than the economy.” Skiing is less about growing the ski market, he said, than about existing skiers who are veterans and have a passionate sport. “We have snow and they are going to ski. They will get their recreation one way or the other.”

Revenues here are equal to last year, which he categorized as “a good year.”

Attendance so far is “down a bit from last year but revenues are up because mid week prices are up from $25 to $39. Our effective rate has gone up.”

Where skiers are economizing is on retail items and food and beverage. However, in the long run, Dee is hopeful. “If the weather stays good I think we'll do about as good as last year. Compared to the overall American economy ours is golden.”
At Killington Resort skier visits are “running slightly ahead of last year especially since the first of the year,” reports Tom Horrocks. Christmas was “challenging due to the weather but New Years weekend was unbelievable.”

Good snow will determine the final figures here, he said. By early January 200 inches of snow had already fallen.

Marketing includes more emphasis on promotion of the Killington Express Card, which offers price cuts on Saturdays, and holidays and non-holidays, and other promotions that lower the window ticket price of $77 weekdays and $82 other times. Killington also contacts its guests via email with powder alerts.

The resort is also offering other promotions as part of its 50th anniversary.

Horrocks said he is “communicating with core customers more in radio, TV and Internet ads.”

So far Killington is “ahead of last year's skier numbers and if weather continues to play into our favor we will exceed last year.”

The economy shows its weakness here in fewer vacation weekends although those that are taken are for a longer stay.

Whatever the current economy, Horrocks said, skiing is a lifestyle sport and skiers are going to go skiing as long as the snow is good.”

At Okemo Mountain Resort in Ludlow Bonnie MacPherson was upbeat.

“The season is awesome. We are about on par for last year for skier visits and last year was a record year. We're pretty happy. Last year the mountain had 640,000 skier visits.

She attributes the good year to an industry that “is recession proof. People won't sacrifice trips to the mountain but are savvy and are price shopping and looking for deals.”

Here, as elsewhere revenues are weaker at eateries and she finds people “not eating out as much and cooking at the condo for dinner.”

Okemo has had its share of special offers including a Super Bowl Score lift ticket and an Okemobama day where it charged $44 for lift tickets. (Normally the price is $77 weekends and $72 on weekdays.)

Beyond the discounts Okemo is being more creative with its outreach to social media marketing sites such as Facebook and Twitter. It also posts to its YouTube online video channel, which MacPherson said, “allows us to communicate with a fan base where we show ski conditions and post new videos weekly.” The Facebook profile “works. We do surveys and ask skiers how they find us.”

Okemo is pulling back on print media and MacPherson said this media “doesn't seem to be as affective and have the reach of the Internet. Some newspaper, radio, TV and billboard ads are purchased for the Connecticut and New York target markets and there are magazine ads in Ski, Skiing and Snow East magazines, but the resort “cuts back every year with less and less advertising.” What makes the Internet work so well, she noted, was “an immediacy as to online and we have online only deals. We are training people to look online.”

Even with great snow and high skier visits Okemo is trimming budgetary fat with reduced energy costs that will save $340,000 in fuel for snowmaking over last year. It purchased 60 new energy efficient snow guns and has cut back on electricity use. 
MacPherson predicted “as good a year as last year and that was a record year in 52 years,” if snow conditions continue into late March. “We'll see at least 600,000 visits.”

“We're very pleased about local participation and we are ahead of our plans for Vermont skiers and riders,” said Bill Stritzler at Smugglers' Notch Resort in Jeffersonville. He sees the destination market “below plan,” and attributes that to “people being very careful about how they spend their money. Everyone is looking for a great bargain. Every consumer has become a negotiator.“

Smugglers' is a “very heavy user of the Internet with its website and banner ads.” It also “tweaks its marketing plan daily” and remains “really committed to the family market and will stay right there.”

There is some decline in restaurant business and at other retail outlets on the mountain but “it is not scary,” said Stritzler. This will be an okay year at Smugglers' Notch “not as good as last year but better than the year before.”

Stratton Mountain in southern Vermont is also having a good year. “We started this season over Thanksgiving with an unbelievable opening weekend and it's continued,” said Myra Foster. Here, too, skiers will come, but they are looking for good deals.

“People are doing a lot of shopping there are more calls and more web browsing before they make a reservation,” she observed.

With air travel costly and increasingly a hassle, Foster said Vermont will benefit. “We may be seeing a whole new market reintroduced to Vermont skiing and snowboarding.”

“I think it will be a good season,” she offered.

Nordic ski areas are also doing well this year. Charlie Yerrick has 34 years experience at the Trapp Family Lodge in Stowe and categorized this year as “the best ever, best skiing and business wise.”
He said the weather “has been more than cooperative,” and he could open his trails by Thanksgiving giving a few extra weeks to the season.

Trapp was, at the end of January, about 25 percent ahead of last year and “that was one of our best years,” according to Yerrick. Why all the optimism and high numbers? “People are eager to get out there and ski. People are beginning to realize the health benefits of the sport.”

Also contributing to the high skier days is extra publicity. Trapp had been featured in the New York Times in a recent Sunday Travel Section.

As a result, “we get a lot of phone calls and made sales.” Trapp also does considerable advertising on radio, in print and has an Internet site and provides email contact with customers.”

Yerrick does not see “people holding back here due to the economy.” What he does see is “people in New England staying closer to home this year. They are staying home and looking for things to do near where they live.”

An effect of the economy is that advanced bookings for lodging here are “not as good as we'd like but short term bookings are up,” as customers now book much closer to the date as they wait to see how good the snow is.

The prognosis for this Nordic season in Stowe is very good said Yerrick. “If it continues like it is weather wise this will be our most successful ski season in the 34 years I've been here.”

“Considering the state of the economy I'm quite pleased with how it's going,” said Chuck Black at Wild Wings Ski Touring Center in Peru. While numbers are off a bit due to a slow December January was up 40 percent from last year. The excellent snow has meant that this ski center was open every day in January a first since 1979. Gross revenue here is also up 40 percent.

As to the weak economy, it might as well be an illusion said Black, “I can't see any effect yet.”

Riehle at the VSAA summed up what his members have been saying about this ski season. “In general the ski industry in Vermont is holding its own in the face of severe economic headwinds challenging all components of the economy.”