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To submit a news item send an email to press@mountainnews.com. The Industry Report is published by Mountain News Corp., which also publishes OnTheSnow.com Editor-In-Chief: - Craig Altschul Executive Editor: - Roger Leo President & Publisher: - Rob Brown Managing Director: - Chad Dyer Advertising Information: - sales@mountainnews.com Subscriptions:
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« Previous Story | The Industry Report Home Page | Next Story » Is There A Recession? Should We Worry? Industry Leaders Say 'Let It Snow'By Craig Altschul 
The Industry Report sent OnTheSnow.com's Roger Leo on a mission to check in with several seasoned industry leaders to find out how they are feeling these days. The bottom line: "Let it snow, let it snow, let it snow." "The number one thing that affects us is the weather above all else, and this winter we're having a great weather pattern," Tim Mueller, who with his wife Diane owns Colorado's Crested Butte and Vermont's Okemo, told the IR. "We're only halfway through, so I can't say for the rest of year, but it's good so far. If we had a good weather pattern this year and skier visits weren't up to what we expected, I would be a little more nervous. But there's a good weather pattern, and the market has responded and bounced back." Karl Kapuscinski, president and CEO of So. California's Mountain High, which is on its way to one of its top three years in terms of skier visits, put it another way: "Snow trumps the economy any time." "We do have such great snow, business has been booming for us," said Julie Maurer, vice-president for marketing and sales for Booth Creek Resorts, speaking from her office at Northstar-at-Tahoe. Tim Boyd, president of Peak Resorts, is just a bit more cautious, however. "I'm not so sure the ski industry as a whole is going to suffer, but overall, this to me seems a little more serious than some of the last little dips we've been having. I'm always concerned when CitiBank and Bank of America are writing off stuff at tens of billions a pop." All gave credit to good snow across the country for healthy revenues this winter, suggesting their industry is resistant to economic recession, but not to the effects of poor snow years. Still, they are keeping a close eye on the economy. Steve Rice manages CNL Income Properties portfolio of 10 mountain resorts and works closely with officials of the four companies who operate them. He told Leo plans are moving ahead for the immediate future. "We're heavily engaged in detailed master planning at some of our newer acquisitions, along with our partner tenants such as Boyne USA and Booth Creek. "We are planning for some capital improvements next year that will likely occur in the form of new lifts, new base lodge expansion, numerous snowmaking improvements, infrastructure electrical upgrades, water supply increases, pumping capacity, and new guns," he said. "This is a capital intensive industry. We have millions and millions of dollars of infrastructure: base lodges, snowmaking systems, lifts, grooming machines, rental shops etc. not to mention rental inventory. Yet our resorts are looking to the future and making the necessary investments in that capital maintenance as well." All saw some softening in the real estate end of ski resort operations, with nuances related to income and location. "Our area has slowed in terms of real estate sales," Maurer said. "But there's a caveat: The very, very high end stuff has not slowed." All described plans for continued investment in upgrades and maintenance, a key to long-term ski industry health. Boyd sounded the most concerned among the group approached by the IR. "It's a little too early to predict, but I would be less than honest if I said I was encouraged with the direction the economy is going. The cost of energy is certainly a big factor for us, and the credit crunch is going to have some effect. "The ski business is certainly related to the overall economy. The recreation dollar is always a discretionary dollar, so people's decisions are going to be made on the availability of that dollar, and on employment issues," Boyd said. "Generally in the past at our resorts we are usually less affected by the economy. That's because our particular resorts are where you can get to them by car, you don't have to get on an airplane, spend several thousand dollars to stay there for a week. "Right now we have a certain amount of projects planned out in the next year, and we've set up the financing in advance, and most of those aren't going to be affected. Going forward, who knows?" Boyd told Leo. The mountain real estate market comes into play as soon as the "R' word rears its ugly head. "Obviously we'd prefer a strong real estate market right now, but real estate goes in cycles," Mueller said. "The sub prime lending thing has had a big impact nationwide. Real estate markets have softened, bank underwriting standards are tougher, mortgages for our buyers are a little harder to get. It's true here and most other resort areas." Mueller is not convinced it's raining, at least not yet. "I'm a little leery about the idea that there is a recession. I'm not seeing it in consumer spending; unemployment is not high by anybody's stands, actually it's pretty low; the price of oil and gas has been high for several years, and hasn't impacted travel, especially in the East, where travel is dependent on cars not airlines. "Everyone in the industry has some amount of debt, but now that interest rates are coming down, that will help allay a lot of the fears some have about a recession. I'm glad to see the Fed has responded the way it has. Should it have lowered rates a little quicker? Yes, but I say that because I'm a borrower not a lender. Anytime you can lower interest rate, that's good. It gives you money to do other things, like pay down debt, invest in operations or whatever," he told the IR. But, once again, it's snowing. Mountain High's Kapuscinski suggests location – along with tons of snow – are key factors in Mountain High's booming business this winter. "We're located within 45 minutes of 3 to 5 million people, within an hour, hour and a half of 12 to 15 million, and within three hours of 21 million people. Everyone has economic issues to some degree, but snow always trumps the economy. And we've had a very good snow year." Booth Creek's Maurer is not seeing any slowdown. "The day-to-day business for our California and New Hampshire resorts has been very strong. It seems if there are any issues, the snow is hiding them, because it's so great and we're just crazy. "I've been associated with Northstar for 26 years, seen a lot of cycles in the economy, and we have always proved to be recession-proof. People are still coming, putting their money into skiing. Family activity leisure time is still important to them. They might be thinking more carefully about the additional retail purchase, but we haven't been seeing that," Maurer said. CNL's Rice summed up the issue on an optimistic note: "Based on skier visits I'm seeing in our resorts, you would not know that the press is full of discussion of recession. "When you have a strong year in all regions of the country right now, there is an afterglow that shows up generally in the following year's purchases of everything from season passes to new skis to vacation planning, because people had a great experience the previous year and they want more of the same. That's another point that bodes well for next ski season," Rice said. The Industry Report will follow this story as it continues to unfold. Rain or shine. « Previous Story | The Industry Report Home Page | Next Story » |
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