The Market's impact on skiing

[deadheadskier]

Uhhh....I did it last winter.....without touching credit or my savings and I was getting $373 a week, chose not to have them tax it. So it most certainly can be done. Just gotta know how to live on the cheap.

Oh and do your own tuning or go without,

How much was your rent? Did you buy your pass while you were still working or pay for it out of unemployment?

Yes, you can ski bum it for darn cheap if you work it right. I'm guessing my total take home income when I dropped out of college and did it in 1995 was $250 per week......but, I worked my butt off the previous summer and with five other guys rented an A frame house with 3 bedrooms the size of closets for two people each. It was paid for for the entire season in advance.

For 99% of people though, living and skiing off unemployment without touching savings isn't gonna happen.

To make a statement that ski areas will be busier because more people will be collecting unemployment and have extra free time is down right nonsense.

 

[tekweezle]

I never said I didn;t expect people to dip into their savings. Some bit of sacrifice is needed to ski and if it is a luxury item for most, then they will do with out.

All I am saying that the ski resorts should still do what they can to lure skiers and still be sensitive to their situations-whether it;s with discounted lift tickets, midweek deals or transportation deals. if not, then might as well cancel the entire 2008-09 season.....

by the way, didn;t mean to come off as being insensitive to those affected by the market situation. I;ve been laid off twice so i know all about it. Have lots of friends who are laid off as well.

about the only place you could live on 400$ a week and still ski might be.....Argentina! the US dollar is 3-1 to the peso. steak dinners is about 10$. 3 day lift ticket is about 100$. you could relocate there and buy a house for about $60,000.

 

[prisnah]

How much was your rent? Did you buy your pass while you were still working or pay for it out of unemployment?

Yes, you can ski bum it for darn cheap if you work it right. I'm guessing my total take home income when I dropped out of college and did it in 1995 was $250 per week......but, I worked my butt off the previous summer and with five other guys rented an A frame house with 3 bedrooms the size of closets for two people each. It was paid for for the entire season in advance.

For 99% of people though, living and skiing off unemployment without touching savings isn't gonna happen.

To make a statement that ski areas will be busier because more people will be collecting unemployment and have extra free time is down right nonsense.

Rent was $600 a month, split two ways, plus an average of a $250 heat bill per month for a 2 bedroom apartment in Bethel. I bought my pass before I was laid off, but could have afforded it afterwards anyway. Health Insurance is included in MA unemployment benefits. Didn't need to pay for gas due to the mountain explorer and a wonderful girlfriend who didn't mind dropping me off and picking me up at the mountain.

To be honest, I probably could have walked away at the end of ski season with some money if I wasn't such a "good" drinker.

And I think there may be a valid argument that with unemployment up, ski area visits may rise. I don't think you'll see as many vaca-skiers as usual, but I think there will be a rise in dirtbag ski bums.

 

[jaywbigred]

A couple of questions/comments:

1) This thread has had a decidely "skier-side" perspective, but I wonder more about the Resort side of things. If the Fed. bank bailout plan fails to decrease the Federal-LIBOR rate spread, the availability of short-term or seasonally loaned capital to small and medium sized businesses could be a real issue for businesses that operate on a primarily seasonal-basis and are cash poor. This is esp. true for entities that already servicing non-operating debt (think resorts that have undertaken large improvements in recent years), as the availability of additional credit to an entity that already carries substantial debt and that relies on discretionary income of consumers for capital will become more and more limited if the credit market remains tight. It makes you wonder about the short-term viability of certain operations that may have trouble meeting day-to-day operating expenses without institutional assitance. Which is sad, because the long term viability of these operations is probably quite good, if they can find a way to stay open for the season (or seasons...) and take in enough revenue to adequately service all their long term and short term debt.

2) While unemployment is still at a historically low rate, we should probably keep in mind the degree to which retirement savings has been impacted by the overall drop in value in the market. As people lose big chunks of their retirement savings, they are faced with the reality of having to replace that savings through more years of work and/or reduced discretionary spending. I think vacations and skiing, among them, are one of the first areas that such spending is cut, and the Vail Resorts 10K is a good analysis of the impact this might bring.

I personally think the overall picture is probably a grim one for most resorts. Those servicing the least debt will fair the best, and all could be greatly aided by a strong snow year, but there are a lot of hurdles and question marks. The scariest thing is that we could have a great snow year, skier visits could go up, and resorts could still fail/temporarily close their doors because they cannot borrow the requisite short term capital they need to run day to day operations. So getting fannies in the door might not really help at all, for some places.

 

[riverc0il]

Ya know... with gas almost dipping below $3.00 a gallon at this point heading into ski season, a lot of northeast resorts stand to benefit from families not taking trips out west in favor of booking a vacation in the northeast. The market may present an environment hostile to some business while being favorable and advantageous to others. So much depends on the snow. But overall the increase in vacation skiers in the northeast may wash out the issues connected with the market and bad economy (at least for larger resorts, I think the small to mid-sized resorts still feel the pain).

 

[Sky]

Good points. I should think those resorts who leveraged heavily to expand are hoping those expansions bring in the $ (sold condos, infrastructure maintenance, etc).

If they need to take out a loan to operate for the season...I'd suspect they already did that in prep for this season....and now those same resorts would be looking to get bodies in the lodge.

The smaller re-starts like Ragged and Tenney (I'm ignorant of their actual situation...they just come to mind) are the sorts of places I'm concerned for.

 

[billski]

I agree, the operational credit crunch will be a huge squeeze. Survival will really depend on how each resort is capitalized. Some private, some public, some in between. Each resort, too has it's own operational strategy.

It's my understanding that collateralized loans will be the only way to go this year.

I expect resorts to have discounts at the ready (especially to the destination/vacation skier/boarder), and will roll them out quickly if they see a downturn.

 

[scootertig]

Aside from the (obviously appreciated) discounts to the skiers for the skiers' sakes, it also makes sense that a resort does much better to get 100 people on the hill at $50/person than to get 50 people on the hill at $75/person.

Even if the "lift ticket math' were to work out to the same (so 100 people at $50, vs. 80 people at $62.50), the more people there are, the more food/beer/etc they sell.

If they're going to be viable this winter, they need to keep their eye on the bottom line, and not just pricing their product at whatever they historically have perceived that the market would bear...


aaron

 

[Greg]

Aside from the (obviously appreciated) discounts to the skiers for the skiers' sakes, it also makes sense that a resort does much better to get 100 people on the hill at $50/person than to get 50 people on the hill at $75/person.

Even if the "lift ticket math' were to work out to the same (so 100 people at $50, vs. 80 people at $62.50), the more people there are, the more food/beer/etc they sell.

If they're going to be viable this winter, they need to keep their eye on the bottom line, and not just pricing their product at whatever they historically have perceived that the market would bear...


aaron

There's a bigger picture though. The arbitrary 100 at $50 is only better if there is the terrain and lift capacity to support it. At some point you start to risk negatively impacting the ski experience (crowded trails and long liftlines). That's not a good thing. The cheap All For One passes proved it.

 

[scootertig]

There's a bigger picture though. The arbitrary 100 at $50 is only better if there is the terrain and lift capacity to support it. At some point you start to risk negatively impacting the ski experience (crowded trails and long liftlines). That's not a good thing. The cheap All For One passes proved it.

Agreed. I didn't mean to imply that more = better.

Rather, if they require x number of dollars to break even for the year, they should look at ways to reach x dollars. Once they have some certainty that x dollars will arrive, they can adjust the pricing to whatever creates a tolerable limit.

This approach is only related to the current situation, in which they may expect a dramatic drop in skiers. To encourage skiers to come out, a lower lift ticket price helps everyone. If it's crowded enough that it's "too" crowded, they didn't figure things out right, and they probably could have kept the price a little higher...


aaron

 

[thinnmann]

NPR Audio

Lots of "bookings down 40%" and less staff/layoff statistics and stuff here - listen...
http://www.npr.org/templates/story/story.php?storyId=95889728&ft=1&f=1001

paste--->>>

Hard Times Snowball Into Ski Industry

Morning Edition, October 20, 2008 · Ski resorts are already reporting low season ticket sales and low advance bookings. Foreclosures are on the rise, even in the high-end Rocky Mountain ski towns once thought immune to an economic downturn. Kirk Siegler reports for member station KUNC.​

 

[billski]

attaboy!

"No matter what the economy brings, we're gonna ski."
Attaboy! That's the attitude.

Lots of "bookings down 40%" and less staff/layoff statistics and stuff here - listen...
http://www.npr.org/templates/story/story.php?storyId=95889728&ft=1&f=1001

paste--->>>

Hard Times Snowball Into Ski Industry

Morning Edition, October 20, 2008 · Ski resorts are already reporting low season ticket sales and low advance bookings. Foreclosures are on the rise, even in the high-end Rocky Mountain ski towns once thought immune to an economic downturn. Kirk Siegler reports for member station KUNC.​

 

[RootDKJ]

I for one, would like to thank Mother Nature & Ullr for giving some of our ski areas a little boost in their initial base making. Hopefully this October dump will allow some resorts to open with less initial operating expenses, namely in the snowmaking areas. Perhaps this will either help resorts stay afloat this season, or pass on some extra discounts to us.

 

[drjeff]

This is a mighty small sample, One 220+ townhouse development across the street from Mount Snow, but this is what was told to us at our annual owner's meeting a couple of weeks ago by our on-site rental department.

Full seasonal rentals were ahead of last year by almost 20% - The work of Mount Snow's new ownership and the product they put out last year and look to continue doing this year was directly attributed to this.

Short term rentals (week long/weekend) were behind last year by almost 50% at this time, with really only X-mas/New Years week having decent booking levels at this point.

The speculation was/is that the short term market will (if at all) be much more active within 1 to 2 weeks of the desired rental dates this season, whereas usually, especially for the high demand vacation weeks/holiday weekends the market is active 2 to 4 months ahead of time.

 

[GrilledSteezeSandwich]

I know I'll be able to haggle on my hotel room at Jackson Hole..but I go there during an offpeak time..

 

[SKIQUATTRO]

Smuggs said to book by Nov 15 to get last years rates (we're retruning guests from last year) as the new prices will be 7-9% higher.....

 

[Moe Ghoul]

Positive impact on skiing from the market the past few days. Pretty much covered my season and guaranteed a late spring trip and a 50+ 08/09. Topped off the tanks at 2.49/gal. Party's over for lower gas prices, enjoy it while we can. Fed shot their wad with the 1/2 point cut as they race to 0.

 

[dmc]

Talked to a friend at the ticket office here in Hunter... She says Season Passes are about the same.. Season rentals are doing well too... Also lot's of businesses opening this winter...

The market may be moving people closer to home...

 

[ctenidae]

The stock market is a discounting mechanism looking 6+ months into the future. Some of this selling is "panic", but the majority of it is forced liquidation due to excessive leverage, which is what put a short term bounce in the USD, and which sustained the bubble economy after the tech crash, which Greenspan conflated with artificially low interest rates, which poured zillions into real estate, much of the economy's "growth" revolving around that. Now that the RE bubble has imploded, profits are heading south, tax receipts are gonna drop, and foreigners are already cutting back how much they "lend" us to pay the country's bills. That means, as we are now witnessing, we have to self-finance, print money, which is going to push long rates higher, and the spiral feeds on itself. Any effort to "smooth out" a recession is only going to compound the problem. The brain trust in DC is already talking up a McStimulus package, Part Deux, but now they want to funnel it to cash strapped states. Does anyone wonder where all this money comes from? You know, all that money that we didn't have for schools, education, social programs, etc. Sure is amazing how they can conjure a few trillion when the banks go bust. That's your kids money they're flushing down the toilet and a debt they can never possible repay.

Freighteningly, I've heard two references from smart people (Howard Marks and Marc Faber) to the Weimar Republic in the past couple of weeks. Not what I like to hear, especially when the only defense I can think of is "Gee, I hope not"

If inflation bounces out of control (and the Fed has given up on trying to control it for teh time being), skiing will certainly be impacted. Of course, so will eating. Only good news is neither Marks nor Faber think inflation will run away for at least 6-8 months.

 

[Moe Ghoul]

Freighteningly, I've heard two references from smart people (Howard Marks and Marc Faber) to the Weimar Republic in the past couple of weeks. Not what I like to hear, especially when the only defense I can think of is "Gee, I hope not"

If inflation bounces out of control (and the Fed has given up on trying to control it for teh time being), skiing will certainly be impacted. Of course, so will eating. Only good news is neither Marks nor Faber think inflation will run away for at least 6-8 months.

Taiwan is already dumping GSE debt and is paring back US Treasury debt.

http://online.barrons.com/article_email/SB122482470725666021-lMyQjAxMDI4MjI0NDgyMjQ0Wj.html

"The financial rescue operation will force the federal government to borrow an unprecedented amount of money as the budget deficit climbs to record heights, a top Treasury Department official said Tuesday." ... "[Anthony Ryan, Treasury’s acting undersecretary for domestic finance] said the rising borrowing was occurring against the backdrop of a slowing economy."
--Associated Press, M. Crutsinger, "Treasury Predicts Huge Government Borrowing Needs," October 28, 2008.

There's the lower revenues comentary.