The Economics of Big Ski Resorts

[billski]

The Atlantic Feb 7 2012

 

[Glenn]

No surprise that silly enviro regs and redtape hamper efforts to open new areas.

I was surprised that food services only made up 9-13% of profit. I woulda thought $6 cheeseburgers would have had a bigger impact on the bottom line. :lol:

 

[oakapple]

No surprise that silly enviro regs and redtape hamper efforts to open new areas.

The article makes pretty clear that, even in the absence of such regulations (not all of which are silly), it would be pretty difficult to open a new ski area today:

Even without environmental regulations, it's not clear who in their right mind would try to build a new resort from scratch. "You have to spend $150 million before you get the first toilet to flush, let alone the lift infrastructure," Kevin Smith said.

I was surprised that food services only made up 9-13% of profit. I woulda thought $6 cheeseburgers would have had a bigger impact on the bottom line. :lol:[/QUOTE]
I would have thought so too.

 

[St. Bear]

No surprise that silly enviro regs and redtape hamper efforts to open new areas.

I was surprised that food services only made up 9-13% of profit. I woulda thought $6 cheeseburgers would have had a bigger impact on the bottom line. :lol:

When you're talking $80 passes and multimillion dollar lifts, if you get a ~10% of your profit from $6 items, you're doing ok.

 

[billski]

Preserving a good local relationship is key, much like the casinos do.

Often, unpublished financial breaks are given to locals for tickets and passes.


I'm not sure these economics will apply to the smaller areas. I simply don't know, but the article does indicate it represents the "largest" areas.

 

[St. Bear]

I'm curious where lodging falls, with tickets or other?

 

[billski]

I'm curious where lodging falls, with tickets or other?

"Because, they own the mountain. Vail and Whistler make half their money from lodging, rentals, snow school, and food (see charts)"

By process of elimination, it's under "Other"

 

[St. Bear]

"Because, they own the mountain. Vail and Whistler make half their money from lodging, rentals, snow school, and food (see charts)"

By process of elimination, it's under "Other"

Good point.

In that case, I'm really surprised it only makes up 10%.

 

[billski]

I would like to see a cost breakdown, but that would be like breaking into Fort Knox. As I understand it labor is #1, energy is #2. Insurance is far lower cost than I thought. It's like 10-15%

 

[millerm277]

The article is a poorly researched piece of garbage, and I wouldn't draw any conclusions from someone who has so little understanding of things that he thinks Whistler hasn't made much money off of Real Estate and that there is a peak called Tahoe.

 

[bobbutts]

The article is a poorly researched piece of garbage, and I wouldn't draw any conclusions from someone who has so little understanding of things that he thinks Whistler hasn't made much money off of Real Estate and that there is a peak called Tahoe.

there was no snow in Tahoe, a California peak also owned by Vail Resorts.

lol

 

[BenedictGomez]

It's certainly not just ski resorts, in the last 20ish years increased regulations have made it more expensive to open just about any sort of business.

 

[oakapple]

It's certainly not just ski resorts, in the last 20ish years increased regulations have made it more expensive to open just about any sort of business.

Yeah, but name one other line of work where literally NO new businesses at all have opened in 30 years. It would have to be something where the field no longer exists, which is not true of skiing.

 

[St. Bear]

Yeah, but name one other line of work where literally NO new businesses at all have opened in 30 years. It would have to be something where the field no longer exists, which is not true of skiing.

In the US, ski areas have opened in the past 30 years, just not resorts.

In Canada, Mt. Revelstoke opened within the past 10 years.

 

[UVSHTSTRM]

Yeah, but name one other line of work where literally NO new businesses at all have opened in 30 years. It would have to be something where the field no longer exists, which is not true of skiing.

Do we really need more ski resorts? Yes I understand the principles with the free market/capitalist society, but do we want 100's or 1000's of acres built up and either force another large ski resort out of buisness or the new ski area failing? What are you left with....the same exact amount of ski areas with an additional eyesore. Perhaps I am wrong maybe there is a need for more resorts, but I doubt it.

 

[BenedictGomez]

Yeah, but name one other line of work where literally NO new businesses at all have opened in 30 years. It would have to be something where the field no longer exists, which is not true of skiing.

A good point.

Environmental regulations now pose a huge barrier to building new ski resorts in North America, according to multiple ski resort insiders, some of whom declined to speak on the record...As a result, most investors looking to start a ski resort from scratch are looking abroad to China, Japan, and South America.

But this isn't limited to ski resorts, and worse, is growing more typical. Look at poor Hunter, they cant even open a few ski trails on their OWN property. It's sad and discouraging.

 

[legalskier]

It's certainly not just ski resorts, in the last 20ish years increased regulations have made it more expensive to open just about any sort of business.

Do Regulations Really Kill Jobs Overall? Not So Much
...while there is relatively little scholarship on the issue, the evidence so far is that the overall effect on jobs is minimal. Regulations do destroy some jobs, but they also create others. Mostly, they just shift jobs within the economy. ***
Link: http://www.propublica.org/blog/item/whats-the-evidence-that-regulations-kill-jobs

Can you name them or give a link? I am aware Ragged Re-opened within the last decade or so. This was a restart of a resort, not a "Let's start laying out trails".
It'd be interesting to see over the past 30 years who has opened and reopened.

Hickory reopened.

 

[BenedictGomez]

Do we really need more ski resorts? Yes I understand the principles with the free market/capitalist society, but do we want 100's or 1000's of acres built up and either force another large ski resort out of buisness or the new ski area failing? What are you left with....the same exact amount of ski areas with an additional eyesore. Perhaps I am wrong maybe there is a need for more resorts, but I doubt it.

Who made you the arbiter of whether or not we "need" more ski hills?

Nothing would please me more than if some millionaire tried to develop a promising undeveloped mountain ridge near an impoverished town in Montana.

 

[St. Bear]

Can you name them or give a link? I am aware Ragged Re-opened within the last decade or so. This was a restart of a resort, not a "Let's start laying out trails".

It'd be interesting to see over the past 30 years who has opened and reopened.

Off the top of my head, I know Crotched "re-opened", but I'm pretty sure it was on a different part of the mountain, with different trails.

 

[AdironRider]

Who made you the arbiter of whether or not we "need" more ski hills?

Nothing would please me more than if some millionaire tried to develop a promising undeveloped mountain ridge near an impoverished town in Montana.

Actually this has been tried before in Montana and the guy leveraged his entire ranch for 100mil plus and still ran out of money before he opened a new resort. Ski runs got cut, resort never opened. Lost everything. Ouch.

Everyone from the old lady next door to the Sierra Club will tie up any new ski area in litigation for decades.