Stowe Likely to Increase Rates??? AIG Reports Record Losses

**thetrailboss** · May 10, 2008, 12:22 PM

Saw that AIG reported major losses last year....so as the parent company of Stowe, or the Mount Mansfield Company, I imagine that the rates will go up even more....

hardline · May 10, 2008, 12:47 PM

hmm. well mount mansfield corp. is a self suporting company. their pricing has very little to do with the parent company. while i wouldn't be surprised if there is a increase in price it would have little to do with AIG's woe's. AIG has had problems for years. they have been trying to go after the higher end insured's which historically are the most tight with their wallets. i could go on and on about AIG and its short sightedness but i hate insurance which is why i didn't go into the familly bussiness.

**thetrailboss** · May 10, 2008, 12:59 PM

Quote:

Originally Posted by hardline

hmm. well mount mansfield corp. is a self suporting company. their pricing has very little to do with the parent company. while i wouldn't be surprised if there is a increase in price it would have little to do with AIG's woe's. AIG has had problems for years. they have been trying to go after the higher end insured's which historically are the most tight with their wallets. i could go on and on about AIG and its short sightedness but i hate insurance which is why i didn't go into the familly bussiness.

I should have said that the losses are with AIG and not MMC/Stowe. I imagine the latter did well this season.....

hardline · May 10, 2008, 1:04 PM

so where you saying that premuims are going to go up with AIG or tickets with MMC?

mondeo · May 10, 2008, 1:06 PM

Quote:

Originally Posted by hardline

hmm. well mount mansfield corp. is a self suporting company. their pricing has very little to do with the parent company. while i wouldn't be surprised if there is a increase in price it would have little to do with AIG's woe's. AIG has had problems for years. they have been trying to go after the higher end insured's which historically are the most tight with their wallets. i could go on and on about AIG and its short sightedness but i hate insurance which is why i didn't go into the familly bussiness.

QFE

In addition, if they've done their pricing right, it doesn't matter if they've made a profit or not; their prices should already be set to those that get them highest profits. If they increase their price beyond that point, the drop in skier visits will offset the additional price per ticket.

**thetrailboss** · May 10, 2008, 1:17 PM

Quote:

Originally Posted by hardline

so where you saying that premuims are going to go up with AIG or tickets with MMC?

I was originally thinking that the parent company would insist on more revenue from the subsidiaries (i.e. AIG putting pressure on Stowe to make more). And yeah, I'm thinking that premiums will increase....

riverc0il · May 10, 2008, 1:29 PM

Seems like speculation to me. Lift ticket prices for every ski area are likely to increase any ways. Hard to suggest specific causation due to a parent company loosing money. Not sure what Stowe's numbers look like, but if Stowe is doing well, I would suspect AIG would focus on the aspects of its operations that are causing the most red. Increasing prices is not always the best way to get more revenue and profit, especially if prices are at the max the market will bear. Cost cutting is always the preferred route if that avenue has not already been taken to its breaking point.

mondeo · May 10, 2008, 1:32 PM

Quote:

Originally Posted by thetrailboss

I was originally thinking that the parent company would insist on more revenue from the subsidiaries (i.e. AIG putting pressure on Stowe to make more). And yeah, I'm thinking that premiums will increase....

The problem is that, being in saturated markets in both skiing and insurance, they can't really control their prices; the competition will beat them down if they do. So, they either have to add something to the existing service that justifies to the consumer an increased price, or they have to cut costs internally. My bet is that, if anything, Stowe will go the cost cutting route. Energy costs being what they are, I'd expect less snowmaking next year, and maybe more selective lift operation.

Maybe less grooming?

Angus · May 10, 2008, 2:05 PM

Didn't realize that Stowe was owned by AIG. If I was a AIG shareholder, I'd be asking why am I in the ski area business?

With energy prices continuing to increase, it will interesting to see the price of tickets next season. Got to believe we'll all be commiserating about a energy "surcharge" next fall.

Anyone know if the ski areas buy forward and hedge their energy - electricity/oil - requirements. assume that they all do.

**thetrailboss** · May 10, 2008, 2:14 PM

Quote:

Originally Posted by Angus

Didn't realize that Stowe was owned by AIG. If I was a AIG shareholder, I'd be asking why am I in the ski area business?

Because AIG's founder, C.V. Starr, was instrumental in starting the resort and owned it. So it was an inherited company I guess you could say....

May 10, 2008, 12:22 PM	#1 (permalink)
thetrailboss Paddling...... Join Date: Jun 2004 Location: Now Playing at Sugarbush and Burke. Posts: 10,560	Stowe Likely to Increase Rates??? AIG Reports Record Losses Saw that AIG reported major losses last year....so as the parent company of Stowe, or the Mount Mansfield Company, I imagine that the rates will go up even more.... __________________ Live, Ski, or Die! Trailboss' Ski Videos now on YouTube! Trailboss' Photo Albums. 66 days for the 2007-2008 ski season!!!! 40 of the 48 New Hampshire 4,000 Footers Completed and Counting!

May 10, 2008, 1:04 PM	#4 (permalink)
hardline Join Date: Sep 2007 Location: Somewhere Between the Toeside and the Hellside Posts: 1,547	so where you saying that premuims are going to go up with AIG or tickets with MMC? Last edited by hardline; May 10, 2008 at 1:14 PM.

May 10, 2008, 1:29 PM	#7 (permalink)
riverc0il Ari Join Date: Jul 2001 Location: Ashland, NH Posts: 6,832	Seems like speculation to me. Lift ticket prices for every ski area are likely to increase any ways. Hard to suggest specific causation due to a parent company loosing money. Not sure what Stowe's numbers look like, but if Stowe is doing well, I would suspect AIG would focus on the aspects of its operations that are causing the most red. Increasing prices is not always the best way to get more revenue and profit, especially if prices are at the max the market will bear. Cost cutting is always the preferred route if that avenue has not already been taken to its breaking point. __________________ -Steve TheSnowWay.com featuring Big Jay Coverage "Skiing is not a sport, it is a way of life." - Otto Schniebs 52

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

May 10, 2008, 12:47 PM	#2 (permalink)
hardline Join Date: Sep 2007 Location: Somewhere Between the Toeside and the Hellside Posts: 1,547	hmm. well mount mansfield corp. is a self suporting company. their pricing has very little to do with the parent company. while i wouldn't be surprised if there is a increase in price it would have little to do with AIG's woe's. AIG has had problems for years. they have been trying to go after the higher end insured's which historically are the most tight with their wallets. i could go on and on about AIG and its short sightedness but i hate insurance which is why i didn't go into the familly bussiness.

May 10, 2008, 2:05 PM	#9 (permalink)
Angus Join Date: Feb 2005 Posts: 357	Didn't realize that Stowe was owned by AIG. If I was a AIG shareholder, I'd be asking why am I in the ski area business? With energy prices continuing to increase, it will interesting to see the price of tickets next season. Got to believe we'll all be commiserating about a energy "surcharge" next fall. Anyone know if the ski areas buy forward and hedge their energy - electricity/oil - requirements. assume that they all do.