Mount Snow Passholders Meeting Details

[tcharron]

Right. So they need to raise prices to pay for the energy saving systems. A fan gun ain't cheap. Big ones can run up to $50,000.00. You also need snow cats to drag them around.

You really think a major ski resort can operate for more than 15 minutes on recycled cooking oil?

Just dug up some of the stories:

http://www.encyclopedia.com/doc/1G1-172006616.html

2,500 gallons, at a much smaller ski area then Mt Snow is. So I guess my answer is, 'Yes, I do think it could let them run for more then 15 minutes'. Can it replace? No. Can it offset? Yes.

 

[tcharron]

Right. So they need to raise prices to pay for the energy saving systems. A fan gun ain't cheap. Big ones can run up to $50,000.00. You also need snow cats to drag them around.

You really think a major ski resort can operate for more than 15 minutes on recycled cooking oil?

Additionaly sources:

Cranmore: http://www.cranmore.com/info/biodiesel.asp
Sunapee: http://www.biodieselnow.com/forums/t/18636.aspx

Those are just two more examples of biofuel. Additionally, many resorts are saving energy costs in other ways, such as wind turbines, secondary electric drives on lifts, etc..

 

[drjeff]

Thanks drjeff. As a Mt Snow skier half of the time (15/16 days a year), I have been very pleased with what I've seen so far. It would be unfortunate if they touched any of the glade areas they have right now.
Any scuttlebut about closing date?

Closing date was talked about, and per Tim Boyd, the resort will close when 1 of 2 things happens: a) All the snow melts or b) Folks stop showing up in numbers significant enough to support the cost of operations - it was mentioned that as the season goes later into April and (hopefully into May!) that daily operations may cease, but that weekend operations are an option if the business and snow are there!

 

[Geoff]

Just dug up some of the stories:

http://www.encyclopedia.com/doc/1G1-172006616.html

2,500 gallons, at a much smaller ski area then Mt Snow is. So I guess my answer is, 'Yes, I do think it could let them run for more then 15 minutes'. Can it replace? No. Can it offset? Yes.

From where I sit, this is a whole lot of feel-good hype. Look at the parking lot at any ski resort. It's stuffed full of cars. Many of them are 15 MPG eco-disaster SUVs. 2,500 gallons of recycled cooking oil is pissing into the wind. Where do you think the electricity comes from that runs the lifts and the water pumps to make snow? From burning fossil fuels. How do you think the base lodge is heated? Fossil fuels. Ski resorts profit from developing real estate. They build trophy homes where you have huge vaulted ceilings and walls of glass that are anything but energy efficient. Those are all heated by heating oil or propane.

If a ski resort were serious about being green, they'd start by adopting effective public transportation since that's the lions share of the carbon footprint. I can't think of a ski resort in the east where you can survive without an automobile. You couldn't get there from the flatlands. You couldn't get to most of the restaurants or get to most of the bars. You might be able to get from your hotel or condo via a shuttle but that's pretty much where it ends.

 

[rachelv]

Closing date was talked about, and per Tim Boyd, the resort will close when 1 of 2 things happens: a) All the snow melts or b) Folks stop showing up in numbers significant enough to support the cost of operations - it was mentioned that as the season goes later into April and (hopefully into May!) that daily operations may cease, but that weekend operations are an option if the business and snow are there!

It would be AMAZING if they have weekend skiing in May that matches the quality of the early season weekends they had in early November. Peaks has really done an incredible job this year, good weather aside.

 

[tcharron]

From where I sit, this is a whole lot of feel-good hype. Look at the parking lot at any ski resort. It's stuffed full of cars. Many of them are 15 MPG eco-disaster SUVs. 2,500 gallons of recycled cooking oil is pissing into the wind. Where do you think the electricity comes from that runs the lifts and the water pumps to make snow? From burning fossil fuels. How do you think the base lodge is heated? Fossil fuels. Ski resorts profit from developing real estate. They build trophy homes where you have huge vaulted ceilings and walls of glass that are anything but energy efficient. Those are all heated by heating oil or propane.

If a ski resort were serious about being green, they'd start by adopting effective public transportation since that's the lions share of the carbon footprint. I can't think of a ski resort in the east where you can survive without an automobile. You couldn't get there from the flatlands. You couldn't get to most of the restaurants or get to most of the bars. You might be able to get from your hotel or condo via a shuttle but that's pretty much where it ends.

I'm not talking about being green for the sake of being green. I'm saying that it's simple economics to say 'Diesel keeps going up, so do our costs, let's try moving away from Diesel'. The argument does happen to make things greener, at least from their footprint.

Jiminy Peak put up their turbine at a cost of 3.9 million dollars, however, it generates the equivalent power as 113,022 gallons of diesel. Easily within 8 years time, it will have paid for itself between cost savings and the profit from selling back to the grid. To reiterate, I'm NOT saying it's 'good to be green'. I'm saying, when it can offset direct year to year expenditures, it can allow areas to keep prices down in the longer term.

Personally, I'm NOT looking forward to 100+ dollar per head tickets within the next 6 years.

 

[tcharron]

From where I sit, this is a whole lot of feel-good hype. Look at the parking lot at any ski resort. It's stuffed full of cars. Many of them are 15 MPG eco-disaster SUVs. 2,500 gallons of recycled cooking oil is pissing into the wind. Where do you think the electricity comes from that runs the lifts and the water pumps to make snow? From burning fossil fuels. How do you think the base lodge is heated? Fossil fuels. Ski resorts profit from developing real estate. They build trophy homes where you have huge vaulted ceilings and walls of glass that are anything but energy efficient. Those are all heated by heating oil or propane.

Another example of a local area is a simple, relatively cheap improvement made at Killington of all places. Modification to the walk in freezers that use the cold air from *OUTSIDE* to keep things frozen when the temps are cold enough. Basically, instead of keeping the air inside the freezer frozen, it uses air from the outside instead, which in many cases during the winter (ironically, when the ski areas are generally with full freezers), requires minimal energy. Looking it up, Killington is saving 86,389 kilowatt hours per year. 11 grand a year savings.

This isn't about feelgood treehugging. I'm simply saying I'd feel better if they gave SOME sign that they wanted to do a few things to try to keep the cost of tickets a little lower, and that they're investing in their future.

 

[ski_resort_observer]

I'm not saying they shouldn't be looking financially, but it's really possible to lower prices AND bring in MORE money.

I think ASC tried that path recently and it didn't work out so well....

Regarding energy sources "fossil fuel" sources like coal fired power plants are not a major source of power in northern New England(Vermont, NH, Maine). Hydro and nuclear are the major sources with growing wind and solar sources. Southern NE relies more on gas and coal.

 

[tcharron]

I think ASC tried that path recently and it didn't work out so well....

The entire 'low cost pass' concept was brought on by (ironically named) Bogus Basin ski area in Utah. They introduced the $199 individual pass, and increased theur profits by something like 2-3 million.

ASC and other companies followed suite in their own ways, *HOWEVER*. Dropping prices that much and then turning around and sucking the profits away from the ski areas that made them to offset costs of building and expanding other ski areas is what killed it for ASC. Did ASC *not* make a profit from their New England ski areas when they all for one passes existed? Nope, they DID make a profit. Did ASC go bankrupt? Newp, they sold off all the ski areas and broke even. So the other ski areas who had their own potential upgrade/maintainance funds cut actually supported the growth of other *huge* ski areas. It wasn't a matter of *IF* they made money, it's where the money went.

Regarding energy sources "fossil fuel" sources like coal fired power plants are not a major source of power in northern New England(Vermont, NH, Maine). Hydro and nuclear are the major sources with growing wind and solar sources. Southern NE relies more on gas and coal.

It would be interested, although we'll never see the numbers, to actually see information on costs themselves. But then again, it's easy to be an armchair ski resort general manager. :-D

 

[Geoff]

The entire 'low cost pass' concept was brought on by (ironically named) Bogus Basin ski area in Utah. They introduced the $199 individual pass, and increased theur profits by something like 2-3 million.

ASC and other companies followed suite in their own ways, *HOWEVER*. Dropping prices that much and then turning around and sucking the profits away from the ski areas that made them to offset costs of building and expanding other ski areas is what killed it for ASC. Did ASC *not* make a profit from their New England ski areas when they all for one passes existed? Nope, they DID make a profit. Did ASC go bankrupt? Newp, they sold off all the ski areas and broke even. So the other ski areas who had their own potential upgrade/maintainance funds cut actually supported the growth of other *huge* ski areas. It wasn't a matter of *IF* they made money, it's where the money went.



It would be interested, although we'll never see the numbers, to actually see information on costs themselves. But then again, it's easy to be an armchair ski resort general manager. :-D

First, Bogus Basin isn't in Utah. It's near that football field with the blue astroturf where they play some unknown bowl game before New Years.

Second, Bogus Basin is a 100% locals area in a part of Idaho that only has a 600,000 population base. The median household income is around $40K. You wouldn't confuse it with a wealthy place Fairfield County or the 128 Belt and people aren't driving to the ski hill in Range Rovers with the latest Bogner outfit. Bogus Basin got the locals skiing by dropping prices. It's not like they have Texans flying in to take advantage of the cheap season pass.

I have a former co-worker who now lives out in Boise who tracked me down a couple of years ago. It's his local hill and here's what he had to say about it:

I'm in the land of neo-Nazi potato farmers - Boise, ID. Bogus Basin is our local ski area, base at 6200', top at 7500', one no-tree, no trail face, but it's south-facing so the snow is usually sketchy. But I've been on it after a two foot dump and it's pretty spectacular. A 10 minute lift line would be "excessively crowded".

That model doesn't work everywhere. In New England, you have to make snow so you need to generate far more revenue than a Bogus Basin. People drive from a couple hundred miles away so everything is weekend-centric. You don't want to go downmarket because you'll create crowds that chase away the high yield people. Killington is an example of that. Last year, it sucked since the place was stuffed full of cheap Bronze pass people. This year, it's delightfully uncrowded and the new owners claim they're making money.

You are also dead wrong about ASC. If you owned their common stock, you got wiped out. When they went public, they sold $200 million worth of stock. All that value was wiped out and nobody even remotely broke even. All of Les Ottens holdings were also vaporized to nothing. The debt holders broke even though they didn't get all the interest they were owed. Oak Hill was the last one in and got their money back out. Eiger confiscated the land at the bottom of Killington when ASC defaulted on that note. The corporation was insolvent and was liquidated before it ended up in bankrupcy court. Oak Hill had full control of the board so they made sure that happened so they could recover their loans.

ASC never made a profit. They had huge interest expense from all that debt and lost piles of money every year they existed.

 

[tcharron]

First, Bogus Basin isn't in Utah. It's near that football field with the blue astroturf where they play some unknown bowl game before New Years.

My bad. I actually had to reread my post, and I have no friggen idea WHY I said Utah.

Second, Bogus Basin is a 100% locals area in a part of Idaho that only has a 600,000 population base. The median household income is around $40K. You wouldn't confuse it with a wealthy place Fairfield County or the 128 Belt and people aren't driving to the ski hill in Range Rovers with the latest Bogner outfit. Bogus Basin got the locals skiing by dropping prices. It's not like they have Texans flying in to take advantage of the cheap season pass.

I just did a quick look around, and the year that it took place, they took in 7.3 million in revenue. That was one of the first big announcements that caused a fairly widespread drop in pass prices.

I have a former co-worker who now lives out in Boise who tracked me down a couple of years ago. It's his local hill and here's what he had to say about it:

That model doesn't work everywhere. In New England, you have to make snow so you need to generate far more revenue than a Bogus Basin. People drive from a couple hundred miles away so everything is weekend-centric. You don't want to go downmarket because you'll create crowds that chase away the high yield people. Killington is an example of that. Last year, it sucked since the place was stuffed full of cheap Bronze pass people. This year, it's delightfully uncrowded and the new owners claim they're making money.

We're not talking about Killington here. We're talking about Mt Snow. Mt Snow is quite literally half the size in all ways. The cost of maintaining quality at a larger area is going to be much more once you reach a critical mass of people. And making the comparison, current prices of tickets for Killington vs Mt Snow is $79 vs $72. But I digress. What my original concern is over is, there comes a breaking point. There are only so many skiiers out there, and that number *IS* demonstratively going down. As prices rise, it contributes to this trend. As the trend continues, other ski areas raise their costs as well. And eventually, the whole system breaks down. Suddenly, Peak Resorts has the same bad name ASC does, and in the end, personally, I'm pissed off because now I can't go skiing without driving up to uberville richierich Killington, which of course, still survives charging 150+ bucks a ticket to people who can afford million dollar weekend condos on the slope. I'm *NOT* saying "Hey, bring the season pass down to $199!". I'm saying that spending a day with the kids skiing at a price of over $300 a day means I don't ski there nearly as much, if at all.

You are also dead wrong about ASC. If you owned their common stock, you got wiped out. When they went public, they sold $200 million worth of stock. All that value was wiped out and nobody even remotely broke even. All of Les Ottens holdings were also vaporized to nothing. The debt holders broke even though they didn't get all the interest they were owed. Oak Hill was the last one in and got their money back out. Eiger confiscated the land at the bottom of Killington when ASC defaulted on that note. The corporation was insolvent and was liquidated before it ended up in bankrupcy court. Oak Hill had full control of the board so they made sure that happened so they could recover their loans.

ASC never made a profit. They had huge interest expense from all that debt and lost piles of money every year they existed.

They got hammered because they went too big, too fast, with too little of a lifeboat. Bear in mind in 1996, ASC had total revenues of 58 million, and owned 4 ski areas. That year, they bought out SKI, which had a revenue of 109 million and another 4 ski areas, for 137 million dollars, . They TRIPLED in size. Then they added even more ski areas. THEN, they had a pass for 375$ that gave access to *6* mountains. I don't think *THAT* price point is sustainable for access to *6* mountains. My point is that the individual ski areas they owned, even with the low all 4 one pass, WHERE profitable on their own. The numbers pre-buildup speak for themselves. That profit is what actually let ASC start to become as large as they did. Mt Snow was actually one of those mountains. I misrepresented what I meant. ASC managed to cover it's debts, *NOT* including the best interests of the shareholders. But that was also because of things like the bronze pass. Your 100% right, the bronze pass was insanely priced. I'm not advocating that in the slightest. But at the same time, you cant simply use a hugely bad example of Killington bronze pass skiiers as the primary reason why it's good to charge more and more and more.

 

[Geoff]

My bad. I actually had to reread my post, and I have no friggen idea WHY I said Utah.



I just did a quick look around, and the year that it took place, they took in 7.3 million in revenue. That was one of the first big announcements that caused a fairly widespread drop in pass prices.



We're not talking about Killington here. We're talking about Mt Snow. Mt Snow is quite literally half the size in all ways. The cost of maintaining quality at a larger area is going to be much more once you reach a critical mass of people. And making the comparison, current prices of tickets for Killington vs Mt Snow is $79 vs $72. But I digress. What my original concern is over is, there comes a breaking point. There are only so many skiiers out there, and that number *IS* demonstratively going down. As prices rise, it contributes to this trend. As the trend continues, other ski areas raise their costs as well. And eventually, the whole system breaks down. Suddenly, Peak Resorts has the same bad name ASC does, and in the end, personally, I'm pissed off because now I can't go skiing without driving up to uberville richierich Killington, which of course, still survives charging 150+ bucks a ticket to people who can afford million dollar weekend condos on the slope. I'm *NOT* saying "Hey, bring the season pass down to $199!". I'm saying that spending a day with the kids skiing at a price of over $300 a day means I don't ski there nearly as much, if at all.



They got hammered because they went too big, too fast, with too little of a lifeboat. Bear in mind in 1996, ASC had total revenues of 58 million, and owned 4 ski areas. That year, they bought out SKI, which had a revenue of 109 million and another 4 ski areas, for 137 million dollars, . They TRIPLED in size. Then they added even more ski areas. THEN, they had a pass for 375$ that gave access to *6* mountains. I don't think *THAT* price point is sustainable for access to *6* mountains. My point is that the individual ski areas they owned, even with the low all 4 one pass, WHERE profitable on their own. The numbers pre-buildup speak for themselves. That profit is what actually let ASC start to become as large as they did. Mt Snow was actually one of those mountains. I misrepresented what I meant. ASC managed to cover it's debts, *NOT* including the best interests of the shareholders. But that was also because of things like the bronze pass. Your 100% right, the bronze pass was insanely priced. I'm not advocating that in the slightest. But at the same time, you cant simply use a hugely bad example of Killington bronze pass skiiers as the primary reason why it's good to charge more and more and more.

You really have no understanding of ASC finances. I guess there's no point in discussing this. It's all online. Go read the SEC filings.

 

[tcharron]

You really have no understanding of ASC finances. I guess there's no point in discussing this. It's all online. Go read the SEC filings.

ASC didn't break out their earnings or losses on a per mountain basis. You can read the SEC filing all you like, they don't break it out.

http://www.justice.gov/atr/cases/f0700/0725.htm

That reflects facts as of 1995. You're right, I have no idea what happened inside of ASC, but I can say that there SEC filings play with numbers and transfer things all over the place. They have to be.

On the other hand, those same SEC filings you mention, specifically http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=4481815&Type=HTML show different information. Operating revenue for January-April of 2006, was 157 million dollars. Operating expenses where 106 million dollars. Half of that profit was taken out due to interest. Accumulated deficit at that time was HUGE because they took out the money to buy SO many mountains, so quickly. As mentioned in the antitrust case, they tripled in size in one purchase, and took an immediatly BANG on the deficit side by over 100 million. And they kept doing it over and over, with even larger and larger mountains. Based on the SEC numbers, ASC could very well have sustained as a company, *HAD IT NOT HAD SUCH an INCREDIBLY large deficit*, even with the bronze pass.

However, the profitability of Mt Snow, specifically, which is what this is all about after all, has always been infered to be good. I'm assuming PEAK is doing well based on their general attitude. All I'm saying is, from a marketing and business standpoint, I'm not seeing peak react at all to the continued rise of *PER DAY ADULT PASSES* (not season passes) besides saying 'Well, everyone else is doing it'. ASC conversations aren't really relevent to the profitablility of PEAK or Mt Snow itself. Even the SEC numbers your talking about back that up.

I'm saying I'd feel more comfortable if I saw, as a customer, a business that appeared to be saying, 'We know the economy, we know our customers, we want to work to ensure the best possible experience. Today, Tomorrow, and the future.'. Stop inferring I want a 300$ pass for all peak resorts, and explain why that business model doesn't work in New England. I'm not saying that at all. I'm happy to see Mt Snow and other Peak resorts being improved, looking good, and servicing customers. What I'm concerned about is when a person earning 100k a year in NH has to say, 'Let's not go to Mt Snow, it'll cost us as a 4 person family 400 dollars a day.

 

[drjeff]

I'm saying I'd feel more comfortable if I saw, as a customer, a business that appeared to be saying, 'We know the economy, we know our customers, we want to work to ensure the best possible experience. Today, Tomorrow, and the future.'. .

While not verbatim, this statement was essentially made by the Mount Snow admins this past Saturday. Bottom line, Mount Snow feels that to offer their customers the best possible experience, it takes the best possible snow condtions, and that takes capital to do. If you take the 3+ million they spent on snowmaking this past summer, combined with from what it sounds like will be a similar dollar figure spent this summer, combined with what cost estimates I've heard floating around in the 8 to 10 million dollar range once ACT 250 permitting approval is obtain for the West lake Project for ample snowmaking water, and then the likely atleast 3 to 5 million they'll spend taking the mountain to 100% snowmaking once they have the water, that's heading on 20 million dollars of just snowmaking upgrades over a likely 3 to 4 season period(I'm not sure if ASC spent that at Mount Snow in the last 10 years combined).

Add in the planned lift upgrades over the coming seasons, and as presented to it's patrons, just in snowmaking and lifts, which are the two biggest things that most ski area consumers pay attention to, and you've got a company planning on spending upwards of 25 to 30 million dollars to give their customers the best possible experience. That works for me!

 

[ski_resort_observer]

Alternative/creative energy sources for resorts are an important piece for the long term survival of many NE resorts. This discussion is barely on the table now but with the wind turbine at Jiminy I feel the ice has been broken.

I worked for several years for ASC, a few as a salaried manager. Even back then the energy sources resorts used went thru a change as in Vermont due to CO2 emmissions, resorts were required to reduce/eliminate the use of diesel as the primary lift mover. I remember on one state flyover for CO2 testing it had a special comment on the amount of CO2 emmisions for kmart. As Geoff pointed out kmart really is on another level sizewise here in NE.

The other day we had a massive power outage about 2ish and we had to fire up the diesel to move the lifts and get everyone off the lifts. The smell brought back memories....:lol:

Fast forward 10 years and we have new issues with power. I see the problems as a motivation to making some big changes for the future.

From a customer satisfaction stand point I think Peaks/Mt Snow has done a great job when compared to kmart. Interestingly I think, at least up to this point, it has little to do with the on mountain performance of Powdr at kmart. My father-in-law has two liftime passes from kmart he bought in the early 60's and isn't upset about the change, he feels he got way more than his money worth. As we know many are very upset.