The Economics of Big Ski Resorts

[oakapple]

Do we really need more ski resorts?

You are right: we don't.

The article claims that skier visits are rising at 1.2 percent per year since 1999. That is slower than the rate of population growth. It's not the kind of explosive growth that existing ski areas cannot absorb.

I don't think the article was suggesting that more are needed. It was just pointing out the remarkably steep barrier to entry, despite the fact that the industry is growing (albeit slowly). It would be difficult to name another industry where that is true.

 

[emmaurice2]

Don't know if one would consider it a resort because it's tiny and in Pennsylvania, but Whitetail is a pretty young mountain that opened from scratch.

 

[BenedictGomez]

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

And that's very sad. But it is what it is, so many of these environmental people are almost like religious fanatics at this point. I used to support some of these groups, I just cant anymore.

The article claims that skier visits are rising at 1.2 percent per year since 1999. That is slower than the rate of population growth. It's not the kind of explosive growth that existing ski areas cannot absorb.

The growth sounds uninspiring, but it's still annual growth, and in the absence of additional ski areas, this will lead to increased crowding if the trend you note continues.

And it's more impressive than you think, at a small 1.2% annual growth, in a mere 10 years, mountains would be 13% more crowded, in just 20 years, almost 30% more crowded, and in 30 years, almost 45% more crowded. Compound interest is a powerful thing!

 

[Glenn]

Yeah, but name one other line of work where literally NO new businesses at all have opened in 30 years.

Oil refineries; nuclear power plants.

 

[jimmywilson69]

First Nuclear Power Plant Approved Since 1978

Take the Nuke plant off your list

 

[thetrailboss]

AN interesting article. Some errors (Whistler is not in America and there are multiple resorts in Tahoe). No real surprises. The one thing that was not discussed was how many resorts used real estate as a means to finance the operation. It was surprising to see just how much tickets and passes make up the revenue.

 

[BenedictGomez]

Oil refineries; nuclear power plants.

ZING!

Take the Nuke plant off your list

Hey, it's not built yet! Give the Church of Environmentalism some time!

I'm sure there's an intentionally bogus study on, "The effect of habitat loss of the 3-toed, 5-lined, river skink" that they can whip up prior to a shovel breaking.

 

[x10003q]

You are right: we don't.

The article claims that skier visits are rising at 1.2 percent per year since 1999. That is slower than the rate of population growth. It's not the kind of explosive growth that existing ski areas cannot absorb.

The Chairman and Great Leader has spoken! No new skiing for you!

 

[WWF-VT]

Overall it's a very lame article from a "senior editor" and I was amused reading the comments. He butchered a bunch of facts about the ski industry and provided limited economic analysis.

 

[oakapple]

The growth sounds uninspiring, but it's still annual growth, and in the absence of additional ski areas, this will lead to increased crowding if the trend you note continues.

And it's more impressive than you think, at a small 1.2% annual growth, in a mere 10 years, mountains would be 13% more crowded, in just 20 years, almost 30% more crowded, and in 30 years, almost 45% more crowded. Compound interest is a powerful thing!

Most ski areas are very inefficient at taking in customer business and distributing it across the mountain. A typical problem is that one or two key lifts are perpetually crowded, while many others at the same resort have no line. If you give someone 10 or 20 years' notice of 30 percent more business, there are usually ways of reconfiguring the lodge and lift layout, to distribute people more efficiently over the same terrain.

To give one local example, ten years ago Hunter Mountain built a whole new "learning center" with a separate rental area. More recently, they installed a 6-pack on the main face and transferred the high-speed lift it replaced over to the west side. Without adding a single new trail, they were able to significantly expand the number of guests they are able to handle.

Just about every ski area I am familiar with has room to grow, when and if the demand is there. Killington (famously) keeps renewing the permits to build the interconnect with Pico Mountain. It's a long-running joke as to whether it will ever be built, but the point is that they are retaining the option to do so.

 

[bigbog]

You know, that is the sad fact of the matter. Everyone wants to be able to tell everyone else what to do with their land. There is some legal grounds for this, such as when someone opens a dump right next to your house, etc.... But ski resorts are dynamic thriving businesses, bringing in value and cash to their regions. The land that the lady next door owns will be worth millions soon. But it'll come with more traffic out front also, so evening walks along the road side won't be as safe.

Still, I feel if you want some land left in scenic condition, buy it yourself and do what you please with it. Don't go telling other people what they can do with their land.

The same can be said for a Walmart planning to build next door...and there's plenty of empty pavement to take a walk in the evening. It's a thriving business as well.
Not attacking uphillklimber, just analogizin' a bit. If they get the all clear signal...developers should be allowed to build, but they shouldn't have the right over community designs of what is to be developed and what isn't to be simply due to deeper pockets...which is what is always the case...and what developers would like to legislate away... Just a $.01 view.

 

[ScottySkis]

And they were going to open Bearpen near Platty in the catskills before 9/11, investors were lined up. It would have been a sweet ski hill to bad.

 

[HowieT2]

ZING!



Hey, it's not built yet! Give the Church of Environmentalism some time!

I'm sure there's an intentionally bogus study on, "The effect of habitat loss of the 3-toed, 5-lined, river skink" that they can whip up prior to a shovel breaking.

fwiw- significant construction of the foundation is already underway in anticipation of this approval.

Do you guys really believe that the reason no new ski areas have been built is because of regulations and environmental opposition? IMHO, it has more to do with economics, demand and existing supply. businesses with thin operating margins in the best of times dont really cry out for the huge capital investment needed to start from scratch. It seems to me that other developments find ways to deal with environmental regulations and community opposition. Fwiw-also in the news today, new york state approved a development in the adirondacks for Tupper lake including the reopening of the ski area.

 

[UVSHTSTRM]

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.

Hmmm, where did I say I was the "arbiter". Simmer down!

I was thinking more along the lines of the east coast, but hasn't the skiing population decreased or remained stagnant during the last several decades?

 

[UVSHTSTRM]

And that's very sad. But it is what it is, so many of these environmental people are almost like religious fanatics at this point. I used to support some of these groups, I just cant anymore.



The growth sounds uninspiring, but it's still annual growth, and in the absence of additional ski areas, this will lead to increased crowding if the trend you note continues.

And it's more impressive than you think, at a small 1.2% annual growth, in a mere 10 years, mountains would be 13% more crowded, in just 20 years, almost 30% more crowded, and in 30 years, almost 45% more crowded. Compound interest is a powerful thing!

Rather surprised to see there is growth. Kind of kills parts of my previous comments.

 

[BenedictGomez]

Do you guys really believe that the reason no new ski areas have been built is because of regulations and environmental opposition? IMHO, it has more to do with economics, demand and existing supply. .

I agree with you, but the former certainly play their part as well.

Even with existing areas that want to create the slightest of expansions, often some eco nut shows up and blocks them (and this is happening on both coasts, NY, UT, CO etc..).

 

[millerm277]

Rather surprised to see there is growth. Kind of kills parts of my previous comments.

I think from what I've read, the population of skiers/boarders has been flat, but visits per person are where the growth has been.

 

[oakapple]

Even with existing areas that want to create the slightest of expansions, often some eco nut shows up and blocks them (and this is happening on both coasts, NY, UT, CO etc..).

It's not hard to find examples where ski areas have expanded. We get it: you think anyone who cares about the environment is a nut.

 

[drjeff]

I agree with you, but the former certainly play their part as well.

Even with existing areas that want to create the slightest of expansions, often some eco nut shows up and blocks them (and this is happening on both coasts, NY, UT, CO etc..).

It's not hard to find examples where ski areas have expanded. We get it: you think anyone who cares about the environment is a nut.

The problem often arises, especially in cases where a ski resort is on public land and is looking to expand. The ski resort totally gets the idea of environmental responsibility. Without proper land, water and forestry management, they've got big issues, and they know that, so when they look to expand they look to do so in as environmentally responsible a way as possible. Now if some small environmental group raises an objection since the proposed expansion might have some adverse effect on their personal enjoyment of the land, then you can have a case where a small minority might very well be hindering the increased utilization of public land by far more people than would of used that public land had the expansion not happened. There's got to be somewhat of a balance achieved, or else "public" land use might get to the point where its so restrictive that one might as well put up a 20 ft high barbed wire topped fence around it, because that's about as accessible as it will be.

 

[BenedictGomez]

It's not hard to find examples where ski areas have expanded. We get it: you think anyone who cares about the environment is a nut.

I guess that includes me given Biology is one of the subjects I have a degree in.

Always amazes me what people on teh internetz assume.

FYI, believing that modern environmentalism has "jumped the shark" and also caring for the environment at the same time, are not mutually exclusive concepts.