Emailers Expressing Concern Over the Economy and How that Might Affect Vacation Dollars

The calendar reads that it is only August 26th, but if our skiMail is a fair barometer, this coming ski and snowboarding season will be a busy one on the slopes. That is the hope of businesses all across the region who look forward to the winter season as another force in driving traffic to them. 

This summer’s lodging traffic has been subpar according to many of our accommodations clients across the region, and there’s no question that we’re still at least somewhat in the midst of one ridiculous economy.  That is obviously on the minds of our visitors who have asked (in one form or another) things such as "how the ski areas will discount skiing" to attract them to the slopes.

Resorts began feeling the squeeze of the economy LAST season and many across the region finished with some numbers that showed slight declines in revenue. While a few ski resorts in the region experienced their best seasons ever, there is some concern being expressed privately that the upcoming season is a huge "question mark".

One such marketing contact who asked to remain confidential, told me, "Mike, we could have one of the best weather winters we’ve ever seen, with lots of snows and great conditions and potentially still struggle a little bit. Yes, it is on our minds."

The economy tanked just prior to the beginning of last ski season and the timing could not have been worse as families across the United States began rethinking how and where they were going to spend their entertainment dollars. The consensus of the local industry experts is that actually helped the Southeast’s ski areas see an increase of traffic.  It is possible that the non-destination style resorts might have seen an even more substantial rise over those resorts that simply ate up a larger budget to stay and play at.

We reported several times last season that we’d never seen the kind of traffic and parking at the foot of Sugar Mountain that we witnessed during January and February of 2009. However, according to many of the lodging people that we spoke with – they were experiencing a higher volume of visitors who were cutting back on the number of days that they were staying. Instead of coming in for a week, they were staying long weekends from Thursday through Sunday. That cut what had typically been a six night stay down to three nights and rental management companies felt the pinch. The same companies shared that what in the past was a weekend trip that saw visitors staying Friday and Saturday nights dropped in many cases to a one night stay.

Just to be clear, all of the ski areas in the Southeast and Mid Atlantic experienced a "good season" with brisk business that was certainly better than some of the previous sub par seasons when bad weather (lack of cold) was the culprit. Some shared that their skier visit totals were "the best ever"; some claimed their’s as a "top five" kind of year and a few complained of numbers that were a bit disappointing – despite being "passable".  Regardless, the businesses that depend on the skier traffic were somewhat "off" from the kind of numbers that they’d experienced in a typical winter.

We heard from a family from Richmond, Virginia who typically fly to Colorado or Utah each winter during Spring break. That didn’t happen according to Eddie Valker. He shared, "For the last several years we’ve headed to Vail or The Canyons but my retirement account took a huge hit with the nosediving of the stock market and we simply had to cancel that and we skied at Wisp resort instead."

He claimed that he usually allotted around $7500.00 for his western ski trip and simply could not make that happen, opting to forego the airline costs and the expense incurred "heading west". He shared that his five day trip to Wisp cost he and his family of four about $3200 on the Wisp getaway and that included in his words, "…blowing about a $1000 on souvenirs and some hoodies, etc."  (Not exactly depression/recession kind of talk, huh?)

That kind of scenario was repeated hundreds of times in emails to us this past winter and the Southeastern ski resorts would be just fine seeing eastern snow lovers making the decision to ski and ride closer to home again this season.

The GOOD NEWS is that we’re beginning to hear less groaning about the economy and there are a few signs that things are coming around and if that holds true AND we see a good winter with plenty of cold and some good snowfalls – then there will be some very relieved and elated resort operators. The DOW is up to around $9500 as of this writing and the NASDAQ and S&P are looking far better than they did last December. So everything is looking "up" and that could bode well for what we all hope and pray is a great 2009-2010 ski season.  Of course cold air is our friend and the colder the better for snowmaking teams at the best snowmaking resorts in the entire country.  According to Joe White, Sugar Mountain’s longtime groomer, "We need it to be cold OFF the mountain as well.  If it’s just cold up here and not down off the mountain, people aren’t as excited about coming up to ski or snowboard."

So, here’s hoping for a cold and snowy winter at the higher elevations of the Southeast and Mid Atlantic – AND that it’s cold enough for flatlanders to feel the urge to get to the slopes!

ARE THERE OTHER POTENTIAL CLOUDS THAT MIGHT RAIN ON OUR PARADE?

Unfortunately the answer to that is maybe? We evidently have some very astute visitors to this website who have shared some insight as to what the thinking is "out there" around the region.

Todd J. of Charlotte, NC summed up the sentiment of numerous emails that we’ve recently received when he wrote, "We’re looking forward to skiing more this season but we’re worried about some of the things we’re hearing in the news about how this Cap and Trade legislation will drive energy cost up by as much as twice what we paid this past year.  That could affect whether or not we can leave the house.  What are you guys hearing about any deals from the ski resorts to discount vacations for us?"

Gosh Todd, I wished it worked like that but unfortunately IF Cap and Trade legislation passes, you better believe that businesses will pass the increased cost of doing business onto the consumer – not the other way around.

Duke Energy played a key role in developing the blueprint for the allotment program presented to Congress by the U.S. Climate Action Partnership, a coalition of 32 corporations, including General Electric, DuPont and General Motors.  More than 95 percent of the electricity Duke sells in the local region is from carbon-dioxide producing coal-fired generating plants. An analysis that Duke Energy did last summer showed that an initial $30-a-ton carbon emission price would cost the utility an additional $629 million a year in 2012 when fully effective, and mean a 35 percent rate increase for industrial, commercial and residential customers.

Getting ski resorts to share their energy usage figures is pretty tough.  On the one hand you’ll hear snowmaking plants boast about being able to crank out 42 gazillion tons of snow, but they don’t want to share that it takes 16 gazillion tons of water at a cost of 3 gazillion dollars a minute.  Of course, that’s an exagerration but you get the point.

A couple of years ago I was speaking with a good friend of mine, Dennis Scanlin, who just so happens to have won the Wind Powering America’s Regional Wind Advocacy Award for the Southeast Region. We were discussing wind turbines and the fact that more and more ski areas were taking a hard look at the prospects of implementing them as sources of energy.  We may be seeing more resorts looking even harder.  Imagine for a second if some economic experts such as those of Duke Energy are correct and that we may see 35-50% increases in power and heating bills in the next year or two.  If your home power bill is $300 a month, that would increase to $450…and according to many we could see far greater increases than that. (Some are claiming double and even triple cost increases to power and heat our homes.)  While that sounds like a tough pill to swallow, consider the fact that ski areas are ENERGY HOGS.

In my research a few years ago (man I archive everything!) I read about Jiminy Peak up in Massachusetts implementing a wind turbine to save costs.  Resort marketing reps shared that their energy cost for the 44-trail mountain, snowmaking, water, power, lifts etc, was $700,000 in 2004. (How’d you like a $175,000 a month power bill!?!?) According to management, their energy bill nearly doubled in 2005 to $1.4 Million dollars because it was a milder winter and they had to devote more to snowmaking efforts, etc.   Understand that these figures are LOWER than some of our Southeast and Mid Atlantic ski areas pay annually!  Let’s take the lowest figure in this range and assume for a second that some of the smaller to mid-range ski resorts spend $600,000 for power per season.  NOW figure in a lower-estimate rate increase such as that discussed by Duke Energy (35-50%).  All of sudden ski areas will be facing $810,000 to $900,000 power bills or an increase of $210,000 to $300,000.  That doesn’t even take into account the increases in food cost (because it cost more to truck the food, etc).

Who do you think will be paying for those increases?  It won’t be discounted skiing.  It would mean that the cost of fun on the slopes would go considerably higher.

All this while 2008 (and 2009 so far) was the coldest year on record.

I read something funny as heck the other day where some wise guy (I wish I had thought of it!) wrote, "January 1 2009 was the coldest day on record for the 2009-3009 period!"

You have to admit that’s kind of funny, but no crazier than many of the comments coming from "the sky is falling" crowd.

ISN’T IT TELLING THAT YOU DON’T HEAR THE TERM "GLOBAL WARMING" ANYMORE?

It’s now "Climate Change" but doesn’t the climate always change?  Hasn’t it ALWAYS done so?

Global Warming or Climate Change or whatever they call it next is killing the planet. So our Congress is looking for ways to reduce carbon emissions. So they are proposing Cap and Trade.  I’m all for cleaning up the planet, but do you guys really want to see the cost of fun (particularly on the slopes) increasing exponentially while the only thing REALLY GOING GREEN will be our Senator’s, Congressman’s and President’s pockets.?!?!

Before I get a bunch of emails from some claiming that we shouldn’t be talking "politics". Understand that our beloved ski resorts and our ability to enjoy them as often as we’d like IS a subject for consideration. All we’re saying is think about it and talk with your Senators before it’s too late.

For these and other reasons some ski industry execs are keeping a cautious eye on the financial horizon while staying hopeful that the winter forecast for the 2009-2010 ski and snowboarding season is a cold, snowy one and that the silliness that is going on in Washington doesn’t make an already tedious industry that much tougher to operate within.

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