The most EPIC KILLINGTON = FAIL of all time?

[Highway Star]

They made the descision to close, likely that descision came down from the coporate HQ out West after they saw something, something that we "arm chair ski area operators" will likely never see, and all the while I'm sure knowing that the proverbial internet bitch-fest would ensue, they stuck with it. One tends to look a bit differently at things when they are the ones signing the checks as opposed to those that don't. I'm not saying that I agree with their descsion, I'm just saying that sometimes the descisions that one makes in business aren't the easy ones

Sorry for not coming back to this sooner. Jeff poses an excellent hypothesis. Clearly, the bean counters pulled the plug on this weekend after they blew the whole spring budget during sunshine daydream/pond skim weekend. There was large outlay for that with minimal returns due to the poor weather and attendance. They did not want to risk staying open another weekend just to hemmorage money.

 

[skiadikt]

Sorry for not coming back to this sooner. Jeff poses an excellent hypothesis. Clearly, the bean counters pulled the plug on this weekend after they blew the whole spring budget during sunshine daydream/pond skim weekend. There was large outlay for that with minimal returns due to the poor weather and attendance. They did not want to risk staying open another weekend just to hemmorage money.

obviously it was a bean counting decision from somewhere and as it turned out probably the wrong one. see j peak this weekend ... in any case, many folks were saying they "got it" this year, all the snow they allegedly blew on ss, june baby etc ... if there is anything to get, it's clear they haven't got it and won't be. this apparently is the best we can expect from these guys - late april and sometimes early may at best.

doesn't really matter where the decision was made. most people say utah. i'm not so sure. i think nyberg went along relunctantly with the extended season and beast thingy. perhaps a show me attitude. a few bad spring weekends and he was done, preferring "to keep his money in his pocket".

 

[mountainman]

If it effected your bonus your would close to. Just kidding. Spring skiing you probaly are not in to make money, the cost to operate and revenue income will not be a gain. In staying open late it's to gain season pass holders and being able to advertise an expanded season. If Beast is going to be the Beast than it should be skiing into May.

 

[riverc0il]

Just kidding. Spring skiing you probaly are not in to make money.

I think Jay Peak would disagree with that assessment...

Profitability as a percent would certainly be significantly lower. But what I saw at Killington during their closing weekend, they have to have really poor management not to have made a profit that weekend even excluding folks that were there with season passes which in fact still were paying customers.

I have familiarity with making business decisions based on the "can we at least break even on costs versus total profit after costs and expenses" question. Part of that question also has to be "are we servicing unique customers that might not buy the same product during regular business hours instead of extended business hours?" I think this is the version of the question that Killington asked themselves... they discounted season pass holders and assumed not a lot of paying tickets. I don't buy it, they would have made a profit either way but didn't want to put forth the effort.

I would say it is going to cost them in marketing and season passes.... but it ultimately won't. The one aspect of this that was a great business decision is that Killington knows it's market. The pass holders that are bitching right now will buy a pass again next season and will bitch no matter what K does. Those of us looking to ski late season just find another option (we may comment on K but ultimately the decision does not effect me nor my future skiing one bit). Killington regulars not into the regular season don't care.

It was a terrible decision overall but ultimately, I don't think they loose anything that they have not already lost unless Killington pass holders speak with their money and buy a pass somewhere else. But I just don't see that happening. I have never see a group of consumers so dedicated to a company/brand/product that they hate so much but keep coming back to it. Perhaps cell phone customers but in that market, everything sucks unlike the ski market where there are good alternatives. Perhaps it all comes back to people being stuck in real estate so that they feel they do not have a choice?

Bottom line though is if they are not making money on weekend spring skiing with that many people showing up on the last weekend of April with only one lodge and one lift running, they are doing something wrong.

 

[drjeff]

I think Jay Peak would disagree with that assessment...

Profitability as a percent would certainly be significantly lower. But what I saw at Killington during their closing weekend, they have to have really poor management not to have made a profit that weekend even excluding folks that were there with season passes which in fact still were paying customers.

I have familiarity with making business decisions based on the "can we at least break even on costs versus total profit after costs and expenses" question. Part of that question also has to be "are we servicing unique customers that might not buy the same product during regular business hours instead of extended business hours?" I think this is the version of the question that Killington asked themselves... they discounted season pass holders and assumed not a lot of paying tickets. I don't buy it, they would have made a profit either way but didn't want to put forth the effort.

I would say it is going to cost them in marketing and season passes.... but it ultimately won't. The one aspect of this that was a great business decision is that Killington knows it's market. The pass holders that are bitching right now will buy a pass again next season and will bitch no matter what K does. Those of us looking to ski late season just find another option (we may comment on K but ultimately the decision does not effect me nor my future skiing one bit). Killington regulars not into the regular season don't care.

It was a terrible decision overall but ultimately, I don't think they loose anything that they have not already lost unless Killington pass holders speak with their money and buy a pass somewhere else. But I just don't see that happening. I have never see a group of consumers so dedicated to a company/brand/product that they hate so much but keep coming back to it. Perhaps cell phone customers but in that market, everything sucks unlike the ski market where there are good alternatives. Perhaps it all comes back to people being stuck in real estate so that they feel they do not have a choice?

Bottom line though is if they are not making money on weekend spring skiing with that many people showing up on the last weekend of April with only one lodge and one lift running, they are doing something wrong.

Here's my take on why I bet what K did their last weekend vs. what Jay is doing is like comparing apples and oranges.

1) As was reported in TR's of K last weekend, there was a significant portion of folks on the hill with season passes, my guess is that as more and more TR's from Jay hit the net the next day or 2, that you won't be hearing such a statement

2) The Killington tailgating experience - from the pics I've seen, there's a good deal more folks breaking out the grills and coolers at K, than Jay. And their free-lunch Thursday promo was a great way to INCREASE atleast the beverage side of their F&B revenue, as I think it's safe to say that not everyone drank water So Jay is likely getting more F&B revenue than K

3) Jay is really out to sell itself - K already has a solid customer base, and even if they (K) pissed off some of them with their moves of the last few weeks, I haven't exactly seen too many reports either here on AZ or over at KZ, of folks who had a '09-'10 K pass NOT buying their '10-'11 K pass. If anything, up until the last 2 weeks or so, the vast majority of K commentary (crowds, snowmaking effort, lift operating scedhules, etc) have been overwhelmingly positive, and in the big picture of things if K's modern season is say 24 weeks long (early November to end of April) and it's positive for 22 or23 of the 24 week season, they're doing more stuff right than wrong.

Jay is still working (and seems to be taking many good steps towards doing so) at building that diehard core base of customer that will take the "plunge" in the form of seeking sometype of housing interest (purchase/share house/etc) to become a full time Jay skier/rider. But for many, that means the extra time commitment that it takes to get to Jay, and if you're talking about that core customer, who is at the mountain atleast 50% of it's operating weekends, that extra traveltime, especially if you've got kids in the car, week in and week out is often a factor.

I think the best analogy one can make about K and Jay, is K is like a Home Depot/Lowes - a big place that has just about everything that you could want in a competitive package, but has some issues

Jay is more like the good, more local Tru-Value hardware store - has most of the stuff of the big guys, often has a bit better customer service, but can't quite offer the same amount of stuff as the mega place can. Both though can (and often do) have success, but very often their main customers are different folks that are trying to do the same things

 

[riverc0il]

I never tried to compare Jay and K but rather Jay has reported that they are profitable during late season.

As far as pass holders at K, my impression was 50/50 pass to non-pass holder on closing weekend. That is still a HUGE day ticket sales number for one lift AND passholders are paying too, they just did up front. So not staying open because it is mostly pass holders is a bad argument. But the point is that they had enough day ticket buyers either way to at least break even on operations, IMO. Maybe there is some hidden administrative cost that I am not aware of.

Regardless, we do both agree that K has no need to push real estate and season passes because folks are already vested whereas Jay has had the Move Up campaign for a while now and clearly values new real estate and pass sales.

All that is irrelevant though when talking about profitability potential on a late season weekend when there are only four operations spinning in the entire region and K is the closest to population centers and clearly was getting the people to come.

 

[SkiDork]

Spring skiing you probaly are not in to make money, the cost to operate and revenue income will not be a gain.

This goes back to the comparison with summer Mtn biking. How do they make money doing that with what seems like far less customers, and not on a spring ski weekend with many walk up ticket buyers (from other mountains etc)?

 

[deadheadskier]

The mountain biking is a good point.

I don't think Jay is trying to steal K customers, though I'm sure they appreciate all the typical late season K skiers showing up late season.

I'm sure the big bullseye for Jay is Mt. Tremblant. Even though Mt. Tremblant is a different skiing experience, it has a hefty population of real estate investors from Montreal. I would think given the proximity that Montreal is Jay's target market.

 

[Geoff]

I never tried to compare Jay and K but rather Jay has reported that they are profitable during late season.

Steve Wright told me Friday that they sold 750 day tickets on Thursday and another 500 on Friday. Saturday was a big day. He assured me that it is profitable. Is it the cash flow of Presidents Weekend or Christmas week? No. ...but it's the right thing to do for your customers. The data is out there on the Vermont web site documenting the continuted decline of Killington. Traffic counts drop every year. Sales, meals, and lodging drop every year. At some point, Killington loses critical mass. Business failures. No snowmaking budget. It turns into what happened to Sugarbush during their decline.

I thought KSRP had turned the corner until they pulled this stunt. They clearly don't understand their market. It's time for me to mail in my demand letter. They owe me 1/26th of my season pass for closing a week early and they owe me the expenses I incurred to ski at Jay Peak. I put 300 miles on my car getting there. At 50 cents per mile, I figure they owe me just shy of $200.00.

 

[bigbob]

Steve Wright told me Friday that they sold 750 day tickets on Thursday and another 500 on Friday. Saturday was a big day. He assured me that it is profitable. Is it the cash flow of Presidents Weekend or Christmas week? No. ...but it's the right thing to do for your customers. The data is out there on the Vermont web site documenting the continuted decline of Killington. Traffic counts drop every year. Sales, meals, and lodging drop every year. At some point, Killington loses critical mass. Business failures. No snowmaking budget. It turns into what happened to Sugarbush during their decline.

I thought KSRP had turned the corner until they pulled this stunt. They clearly don't understand their market. It's time for me to mail in my demand letter. They owe me 1/26th of my season pass for closing a week early and they owe me the expenses I incurred to ski at Jay Peak. I put 300 miles on my car getting there. At 50 cents per mile, I figure they owe me just shy of $200.00.

I would not spend that $200 before you get it! Good luck, and if every pass holder sent them a letter do you think a little bell might go off in somebodies head, "Geez, I guess I fu**ed up"!! Especially when the still use the skiing into May to sell passes! All this has been beat to death, but if the traffic counters continue to show a decline in an improving economy, do you think they might wake up ???
Please post a "Crackberry" picture of the check if you receive it!

 

[mister moose]

Question for you.

Even in with today's seasonal numbers. Who has a larger market share of the skiing in the Northeast K or Jay???

I'm quite certain if you plunked Jay Peak where Pico is, you'd have a whole different ball game. Distance from population centers is Jay's biggest obstacle to growth. Market share differential has far less to do with the business acumen of POWDR Corp.

They made the descision to close, likely that descision came down from the coporate HQ out West after they saw something, something that we "arm chair ski area operators" will likely never see, and all the while I'm sure knowing that the proverbial internet bitch-fest would ensue, they stuck with it. One tends to look a bit differently at things when they are the ones signing the checks as opposed to those that don't. I'm not saying that I agree with their descsion, I'm just saying that sometimes the descisions that one makes in business aren't the easy ones

Yes, it may have come from Utah, and yes there are considerations not seen by the public. However, not standing by your commitments and losing credibility are never good business practices. Those considerations should have affected future operation dates and planning, not current commitments.

Here's my take on why I bet what K did their last weekend vs. what Jay is doing is like comparing apples and oranges.

1) As was reported in TR's of K last weekend, there was a significant portion of folks on the hill with season passes, my guess is that as more and more TR's from Jay hit the net the next day or 2, that you won't be hearing such a statement

2) The Killington tailgating experience - from the pics I've seen, there's a good deal more folks breaking out the grills and coolers at K, than Jay. And their free-lunch Thursday promo was a great way to INCREASE atleast the beverage side of their F&B revenue, as I think it's safe to say that not everyone drank water So Jay is likely getting more F&B revenue than K

3) Jay is really out to sell itself - K already has a solid customer base, and even if they (K) pissed off some of them with their moves of the last few weeks, I haven't exactly seen too many reports either here on AZ or over at KZ, of folks who had a '09-'10 K pass NOT buying their '10-'11 K pass. If anything, up until the last 2 weeks or so, the vast majority of K commentary (crowds, snowmaking effort, lift operating scedhules, etc) have been overwhelmingly positive, and in the big picture of things if K's modern season is say 24 weeks long (early November to end of April) and it's positive for 22 or23 of the 24 week season, they're doing more stuff right than wrong.

1) So my pass revenue doesn't count at all?

2) Exactly. This is what POWDR is doing wrong. Overpriced F&B drives people away when they have an alternative. This however, has no bearing on Springtime operational decisions the weekend of 4/30 since as you theorize, Jay made money on F&B.

3) I agree, but with one huge difference. By being misleading and not honoring their commitments on multiple occasions, POWDR is planting the seeds of mistrust in their future slopeside property buyers. That can't be a good thing.

 

[drjeff]

I'm quite certain if you plunked Jay Peak where Pico is, you'd have a whole different ball game. Distance from population centers is Jay's biggest obstacle to growth. Market share differential has far less to do with the business acumen of POWDR Corp.

True - but shortly of some mega incredible geological event and/or the combined populations of Burlington and St. Johnsbury supassing those of Boston and New York, K has that huge advantage and that's just a simple fact.

Yes, it may have come from Utah, and yes there are considerations not seen by the public. However, not standing by your commitments and losing credibility are never good business practices. Those considerations should have affected future operation dates and planning, not current commitments.

Until the core K customer starts speaking with his/her wallet, the credibility issue isn't really one. Powdr has already demonstrated with the "cleansing" of the ASC era bronze passes, that they're not afraid to loose passholders, and for many in the potential market for some of the proposed K village properties that they want to build, a season from Thanksgiving (or maybe even X-mas) through early March is all they're looking for, since in general when it comes to ski homes, the higher their price, the less then owners use them

1) So my pass revenue doesn't count at all?

at the end of the ski season, probably not that much, as an actual revenue from that day is more likely to sway operational status than the built in $$ from passholders - the ugly truth sometimes that passholders are important for about 90% of the season, but in the last 10% their importance falls off

2) Exactly. This is what POWDR is doing wrong. Overpriced F&B drives people away when they have an alternative. This however, has no bearing on Springtime operational decisions the weekend of 4/30 since as you theorize, Jay made money on F&B.

Until ski area F&B is able to offer a 5 star quality product at say McDonald's prices, pretty much everyone will complain

3) I agree, but with one huge difference. By being misleading and not honoring their commitments on multiple occasions, POWDR is planting the seeds of mistrust in their future slopeside property buyers. That can't be a good thing.

See my above about the likely buyer of a Powdr/S&P future K village development property - the reality is their target market is much morely likely to be the 10 day a year K skier than the 100 day a year K skier

 

[mister moose]

at the end of the ski season, probably not that much, as an actual revenue from that day is more likely to sway operational status than the built in $$ from passholders - the ugly truth sometimes that passholders are important for about 90% of the season, but in the last 10% their importance falls off

It was a retorical question. But it also questioned the wisdom of that kind of thinking at a resort that used to be known for late season skiing.

Until the core K customer starts speaking with his/her wallet, the credibility issue isn't really one.

Uh, you might want to rethink that. Here's a graph of the killington access road traffic counter since 2005:

And if you think the credibilty issue won't affect future real estate sales, you are as out of touch as Utah. I'm not saying some of your example Mr-ski-10-days-a-year won't buy some. I am saying that street rep and buzz counts for a lot, even in wealthy circles. And the street rep lately isn't good. The buzz is down. And that will affect real estate sales.

Until ski area F&B is able to offer a 5 star quality product at say McDonald's prices, pretty much everyone will complain

Funny, but Sugarbush and Jay Peak are large resorts that price a better product at a lower price than Killington. Got that? Food you actually want to eat. At other ski resorts. I am addressing the competitive aspects of those resorts, not the nature of customers to complain in general.

See my above about the likely buyer of a Powdr/S&P future K village development property - the reality is their target market is much morely likely to be the 10 day a year K skier than the 100 day a year K skier

...and that 10 day a year skier guy/gal likes to go where the 'in' crowd is. See Nantucket, Hamptons, Newport, St Barts, Stowe. see my above graph for a picture of how 'in' Killington has been lately.

 

[mondeo]

Uh, you might want to rethink that. Here's a graph of the killington access road traffic counter since 2005:

And with that come 2x the season ticket price. My guess is revenue is at least flat.

And if you think the credibilty issue won't affect future real estate sales, you are as out of touch as Utah. I'm not saying some of your example Mr-ski-10-days-a-year won't buy some. I am saying that street rep and buzz counts for a lot, even in wealthy circles. And the street rep lately isn't good. The buzz is down. And that will affect real estate sales.

Street rep among this crowd and historic K regulars is down. Street rep in the circles of Dec-mid March skiers after this year is probably on the rise. Good midwinter product is what matters.

 

[skiadikt]

And with that come 2x the season ticket price. My guess is revenue is at least flat.

Street rep among this crowd and historic K regulars is down. Street rep in the circles of Dec-mid March skiers after this year is probably on the rise. Good midwinter product is what matters.

that cheap pass was an aberration - only for asc's last few years. prior to that, the pass price was pretty much where it is today - maybe slightly higher.

also they got very lucky with their mid-winter product. didn't get much nat snow but very clean in terms of rain/thaw/freeze cycles. once the season finally started, wasn't very challenging in terms of maintaining a good ski surface.

 

[Greg]

I would say it is going to cost them in marketing and season passes.... but it ultimately won't. The one aspect of this that was a great business decision is that Killington knows it's market. The pass holders that are bitching right now will buy a pass again next season and will bitch no matter what K does.

[snip]

It was a terrible decision overall but ultimately, I don't think they loose anything that they have not already lost unless Killington pass holders speak with their money and buy a pass somewhere else. But I just don't see that happening. I have never see a group of consumers so dedicated to a company/brand/product that they hate so much but keep coming back to it.

You should win an award for these observations. You're right on target.

 

[SkiDork]

nobody hates the actual mountain. Its the owners. Unfortunately you can't seperate the 2

 

[JerseyJoey]

nobody hates the actual mountain. Its the owners. Unfortunately you can't seperate the 2

Exactly. Tough to hate the place. Easy to hate the owners.

 

[Vortex]

Really am curious how many seasons pass day trip people have made a move to OKemo, Mt snow and Sunday River.. Property owners are going to ski where their bed is. The rest have a choice.

I think the descion will have some impact.

I still think Mt snow and Sunday River have got some of the market. I have heard others mention Okemo. Length of Season does not seem to be a competition issue there. Maybe Parks.

K is a great mountain. That has not changed,

 

[dmc]

Exactly. Tough to hate the place. Easy to hate the owners.

Yup.... It's all about the terrain...