The Market's impact on skiing

[Vortex]

Fall fest was still busy at 5 pm. I arrived at Sr fall fest aound 4 and still going on pretty well. Pass lines still had people in them.

 

[ComeBackMudPuddles]

What are the main costs for ski areas? Labor, energy and infrastastructure (including debt servicing)?

I'd imagine that labor makes up the biggest percentage of costs, but I'm only speculating. And within labor, what percentage of a ski area's budget is made up of seasonal/part-time workers? I'd imagine a high percentage. One potential benefit to the bottom line might be that with more unemployed people looking for cash, ski areas might be able to lower wages (i.e., costs)....

Not that I'd wish that on anyone. I'd rather pay a bit extra to ski and have everyone keep their jobs. And I doubt the savings would off-set reduced receipts.

 

[Vortex]

Energy, ie electrictity for snow making is huge.

 

[GolfingOwl]

Andy's quote:

The present market situation has resulted in some layoffs already, not tell how much further that will go. But, even worst than layoffs, its causing consumer fear. I think as a result, people will start watching their spending.



riverc0il's quote:

This year I think people will cut back on disposable income spending for psychological reasons whereas I suspect next year there will be much more cuts out of necessity.


Warp Daddy opened door #3. For the uninformed (me), there's that naive optimism that we just keep plugging away, noses to the grind stone attitude which will make everything better (or at least less worse).

Andy's and RC's point about the consumer's pyschology, the impact on their spending...and the ultimate downward spiral reduced consumerism's impact will have on the economy will impact even the folks who have invested into THIS season..."cutting one's losses" so to speak.

Sure there will be the more hard-core/dedicated (read addicted :> ) folks who will revel on the abandoned slopes, use the avaialable (read "turning") lifts...or "eran" their turns. But if the psyche of the consumer spirals lower (and in that direction faster)...hell / handbasket issues willl prevail.



Let's Go Red Sox! *sigh*

You are right on in this and your other posts. Vacation destinations are already feeling impacts. There is no way the ski resorts won't feel pain. Local mountains may see some benefit as those who love the sport opt for day trips closer to home versus more expensive overnight trips. The poor economy plus the rising cost of travel (both flying and driving) are going to really hurt the destination resorts.

I can tell you that I will definitely ski less than last year (2 trips out west and 2 vermont trips) and I am looking for ways to "ski on the cheap" with my two young kids. My wife's job is secure but I can't predict my future so I can't think about planning a ski trip when I don't know where or if I will be working come 2009. Resorts should prepare for a lot less pre-bookings as well and more last minute arrivals.

 

[billski]

abandoned slopes

abandoned slopes. hmm. what a concept. I like it! :flag:

Here is what Vail Resorts has to say about it in their fiction called a 10K:

"

We are subject to the risk of economic downturns including adverse affects on the overall travel and leisure related industries. Periods of economic slowdown or recession, whether regional, national or international, may decrease the discretionary spending of our guests. Actual or perceived fear of recession may also lead to decreased discretionary spending. Skiing, travel and tourism are discretionary recreational activities that can entail a relatively high cost of participation and can be adversely affected by economic slowdown or recession, which, in turn, could negatively impact our operating results. This could further be exacerbated by the fact that we charge some of the highest ticket prices, as well as prices for our ancillary businesses including ski school, in the ski industry. While pricing increases historically have not reduced demand, there can be no assurances that demand will remain price inelastic. Similarly, there can be no assurance that a decrease in the amount of discretionary spending by the public would not have an adverse effect on our results of operations. Additionally, many of our guests travel by air and the impact of higher fuel costs in addition to higher cost and availability of air services may cause a decrease in visitation by destination guests to our resorts. Higher energy costs and gasoline prices may also result in a reduction to in-state visitation. ​

We depend on a seasonal workforce. Our mountain and lodging operations are largely dependent on a seasonal workforce. We recruit worldwide to fill staffing needs each season and utilize visas to enable the use of foreign workers. In addition, we manage seasonal wages and the timing of the hiring process to ensure the appropriate workforce is in place. We cannot guarantee that material increases in the cost of securing our seasonal workforce will not be necessary in the future. Furthermore, we cannot guarantee that we will be able to obtain the visas necessary to hire foreign workers who are an important source for the seasonal workforce. Increased seasonal wages or an inadequate workforce could have an adverse impact on our results of operations."

The high fixed cost structure of ski resort operations. The cost structure of ski resort operations is largely fixed (with the exception of certain variable expenses including Forest Service fees, other resort related fees, credit card fees, retail/rental operations, ski school labor and dining operations) and any unforeseen material declines in the economy, elevated geopolitical uncertainties and/or significant changes in historical snowfall patterns, as well as other risk factors discussed herein could adversely effect revenue. As such, our margin, profits and cash flows may be materially reduced due to declines in revenue given our high fixed cost structure.

Overview
The Company's single largest source of Mountain segment revenue is the sale of lift tickets (including season passes), which represented approximately 44%, 43% and 42% of Mountain segment net revenue for the years ended July 31, 2008, 2007 and 2006, respectively. Lift ticket revenue is driven by volume and pricing. Pricing is impacted by both absolute pricing as well as the demographic mix of guests, which impacts the price points at which various products are purchased. The demographic mix of guests is divided into two primary categories: (i) out-of-state and international guests (“Destination”) and (ii) in-state and local visitors (“In-State”). For the 2007/2008 ski season, Destination guests comprised an estimated 63% of the Company's skier visits, while the In-State market comprised an estimated 37% of the Company's skier visits. Destination guests generally purchase the Company's higher-priced lift ticket products and utilize more ancillary services such as ski school, dining and retail/rental as well as the lodging at or around the Company’s resorts. Destination guests are less likely to be impacted by changes in the weather, due to the advance planning required for their trip, but can be impacted by general economic conditions and the global geopolitical climate. In-State guests tend to be more weather-sensitive and value-oriented; to address this, the Company markets season passes to In-State guests, generally prior to the start of the ski season. Approximately 26%, 25% and 23% of the total lift revenue was comprised of season pass revenue for the 2007/2008, 2006/2007 and 2005/2006 ski seasons, respectively.


​

 

[Sky]

abandoned slopes. hmm. what a concept. I like it! :flag:

HEH! H'ya...for one season in a row. :> Then you can read about your fav spots on NELSAP. :<

Could be interesting. Wachusett will weather the storm. So many schools particiapte, plus the proximity to Boston/Worcester/Prov.

Wa kept their pass prices the same as last year.

So, local skiing will be fine *for me*.

I'll still take a couple of day trips where my pass offers a discount (Sunapee, Okemo, Stratton)...and I'll definitely opt for the stop on the way (the long way) to work and hit Wa in the morning a few times...plus race night.

 

[Hawkshot99]

The ski shop that I work at has alot of tent sales. We are up 16% from were we were at this time last year. We dont know how we will do on the inline stuff, but are doing good now.

 

[GrilledSteezeSandwich]

The ski shop that I work at has alot of tent sales. We are up 16% from were we were at this time last year. We dont know how we will do on the inline stuff, but are doing good now.

MSY..Mad Steezy Yo..and the market is up a ton today..

 

[MommaBear]

Mount Snow has already started the cuts:

http://www.dvalnews.com/news.php?news/news2.html

 

[RootDKJ]

MSY - lol

 

[tekweezle]

i think people will ski more this year. plenty of people will be out of work and collecting unemployment so maybe more free time. provided they don;t have some ridiculous sub prime mortgage hanging over their head, they will just stay closer to home and may brownbag it more. the may car pool it or take a bus instead. anything to keep it affordable.

local resorts ought to do what they can to promote so called "stay-Cations"

so eliminating services and personal is the last thing I would do if I was the ski resorts. it;s like advertising during a recession. it sounds not logical but you need to do it. Plus the weather forcasters expect it to be a very cold and snowy winter in the north east.

if i was the western resorts, I try to strike some sort of direct deals with the airlines to get people to the resorts.

 

[deadheadskier]

i think people will ski more this year. plenty of people will be out of work and collecting unemployment so maybe more free time.

:blink:


You do realize that the maximum benefit for unemployment is about $400 a week, which still is taxed correct? Maybe some states a bit more, but for most people unemployment would barely cover their basic living expenses. To suggest more people will be skiing because they will be unemployed and have more free time :blink:

 

[billski]

i think people will ski more this year. plenty of people will be out of work and collecting unemployment so maybe more free time.

That's Beverly Hills and Greenwich, CT talk! :-o

 

[tekweezle]

well you either love skiing or don;t. if skiing is part of life, then those who love skiing will find a way to make it work. maybe cut back on getting double grande starbucks lattes and broadway shows.

sure there will probably be a dip in casual ski numbers. Maybe the big mega expensive trips are out of the question. but for the local resorts, i see opportunity to cash in on a "back to your grassroots" type of clientele.

 

[Warp Daddy]

Let's see $400 /week for avg unemployment check huh ?

u gonna feed your family , heat your home or apt , put gas in your car , take your family to the dr when they are sick ,and buy prescription meds and oh btw pay your insurances on $400 a week and HAVE $$$ left over to ski ----------------------- what planet we talkin bout here ??

 

[deadheadskier]

I'm sorry tekweezle, there is no way people are living and skiing off of unemployment without dipping significantly into savings. After taxes on unemployment, you'll have $1250 a month total to live off of. I don't know where you live, but in most parts of the country, cheap rent and utilities are going to take up $700-$800 of that if you're lucky to find something that cheap. So, with the remaining $450 you think people are going to able to afford transportation, food, health needs AND pay for skiing on top of that?

Ain't gonna happen.

 

[prisnah]

I'm sorry tekweezle, there is no way people are living and skiing off of unemployment without dipping significantly into savings. After taxes on unemployment, you'll have $1250 a month total to live off of. I don't know where you live, but in most parts of the country, cheap rent and utilities are going to take up $700-$800 of that if you're lucky to find something that cheap. So, with the remaining $450 you think people are going to able to afford transportation, food, health needs AND pay for skiing on top of that?

Ain't gonna happen.

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,

 

[billski]

Let's see $400 /week for avg unemployment check huh ?

u gonna feed your family , heat your home or apt , put gas in your car , take your family to the dr when they are sick ,and buy prescription meds and oh btw pay your insurances on $400 a week and HAVE $$$ left over to ski ----------------------- what planet we talkin bout here ??

Romania works for $400/month.

US$10-20/day, with Not-so-bad skiing too.:dunce:

 

[GrilledSteezeSandwich]

:blink:


You do realize that the maximum benefit for unemployment is about $400 a week, which still is taxed correct? Maybe some states a bit more, but for most people unemployment would barely cover their basic living expenses. To suggest more people will be skiing because they will be unemployed and have more free time :blink:

I guess it depends on if they have much savings..for me personally..if I didn't have a job..I'd be broke within a year..

 

[GrilledSteezeSandwich]

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,

Wow I definitely couldn't live on $373 a week..back in my Montana days I was only making about $250 a week after taxes.