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IR Live From Vail:'Imprudent To Think Industry Exempt From Downturn ' Yesawich Tells MTS Forum
By Craig Altschul
April 10, 2008
Vail, Colorado: Finding a conversation that didn't include the economic malaise affecting Americans and speculation on how the mountain resort industry might fare during it, is virtually impossible this week at the 33rd Mountain Travel Symposium. MTS Partner Ralf Garrison, moderating the most anticipated session at the MTS Educational Forum, jumped right into that subject with what was certainly perceived as an all-star panel assessing the current and near state of the industry. He got some mixed answers.
"The best bet for the industry now is to personalize everything you can," responded Dr. Peter Yesawich, whose company produces the National Travel MONITOR. "If you give people exactly what they want, they will continue to pay more for it. However, it would be imprudent to think the industry is exempt from this economic downturn."
Dr. Yesawich, who seemed to always have the last, and often, sage words on a variety of future-aimed topics, said "we're in uncharted territory where value-oriented consumers are shopping aggressively for what they believe to be the best deals. That's important because our newest surveying shows 16 percent of all travelers say they are going to take fewer trips because of the pressure on household budgets. Money worries have eclipsed time as the top issue." Yesawich, by the way, is the tourism expert who coined the phrase "time poverty."
Vail COO Chris Jarnot said that, while U.S. cities have hit the speed bumps, some of that slack is softened because "the international market is rocking." He said Vail's global business has jumped 23 percent this winter.
Bob King, Sr. Vice President for Marketing and Sales at Intrawest, while agreeing that there is an erosion of consumer confidence overall, believes the mountain travel segment is fairly resilient and Intrawest resorts does not plan to change its strategy aimed at "delivering exceptional experiences." He said they will tune pricing and products market by market, but will "stay the course."
"I don't think our industry should focus too much on price. Value is really a perception of price, whether it's a Chevy or a Mercedes, for example," King said. "Focusing too heavily on price could be heading down a slippery slope."
Yesawich added "we've been through these rough patches before. People still take vacations, but they take them differently. What's changed this time is the consumer has so many more choices when they travel."
The dual strategies of serving baby boomers and millennials at the same time are a challenge almost as vexing as the economy fluctuations. Garrison asked the panel about it.
"I started in the mountain resort marketing business when we had the Grizzly Adams feel for advertising. Then came the wine mannequins at dinner," Myles Rademan, Public Affairs Officer for the town of Park City, Utah, said. "It would be a bad assumption to think that baby boomers are limping toward decrepency. We need to focus on who is actually delivering our promises."
Dr. Yesawich pointed out that the size of the baby boom (78 million) and millennial (75 million) cohorts are roughly the same size, "but they are very different consumer groups. The millennial isn't going to choose the traditional Marriott, but something more experiential. Look at the buzz over new brands like 'W' that has only 18 hotels, but a huge presence.
"Millennials are responding to what I call conversational marketing. It's the collective buzz of networking, of online reviews, and the newest influence - third screen marketing," he said. Third screen refers to adding the phone to computers (the second screen) and TV (the first screen).
Phillip Wolf, CEO of PhoCusWright, agrees. "Millennials need to be empowered. They make decisions by discussing them with other customers. The technology of today and tomorrow makes it possible to issue something like a universal pass. We need to embrace crowd-pleasing strategies."
All panelists looked fondly upon baby boomers. King called them the "sweet spot." Jarnot noted that boomers want to make the most of the time they have left and, "they have more time. They want great experiences with the children and grandchildren. We see that expressed in the high numbers of kids enrolled in children's programs."
Millennials, King says, are so important to us because we know "once people get engaged with us they tend to stay engaged. We need to be sure we have plenty of activities at resorts that are youth-focused."
Dr. Yesawich said real estate - the second home market - will come back after this rough patch and we ought to keep an eye on it.
"Understand that $41 trillion in private wealth is about to change hands," he said. "Much of that money will show up in resort real estate purchases. They may want to have places at different resorts and patterns may change, but the future is not in lift ticket sales - it's in leveraging this monumental wealth transfer."
The fly in the ointment that takes a bit of the sun off the snow of this generally across-the-board good winter is the visa situation for foreign workers. "We're closing Sunday with the best conditions in memory for this time of the year. It's not economics. It was the surprises that came with visas last fall, though the early Easter didn't help travelers' mind-sets." Jarnot said resorts will really feel the staffing heat this summer. "We're ramping up for next season on two fronts by increasing our domestic efforts and lobbying Congress."
So, what's immediately ahead? "We've spent the last 20 years focusing on mountain hardware," Jarnot said. "Now, we're focusing on the base. Arabelle has remade Lionshead. We'll add more table service on the mountain, improve base parking, and children's registrations."
Jarnot explained the recent announcement of Vail's Epic Pass ($579 adults; $279 kids under 12) that allows unlimited skiing and riding at all five of its resorts and A-Basin. "We studied it long and hard. The Epic pass will do for destination guests what the Colorado Card concept did for local and Front Range guests."
Intrawest's King noted the success of the Peak-to-Peak gondola at Whistler/Blackcomb, "a $50 million bet that is transforming that resort experience and improvements at our other resorts in line with their branding."
Dr. Yesawich answered a question about the actual size of the market in millions by saying "it doesn't matter. Six in 10 families travel. Four of those 10 families do not. A flat two percent take ski or snowboard vacations."
He got the last word: "I think it would be wise to sell winter vacations, not just ski or snowboard vacations. Maybe that sort of messaging would grow the market, perhaps to three percent. The foundation, of course, remains the ski vacation, but there's more to it."
MTS Notebook... OnTheSnow.com sponsored the session and Mountain News Corp. President and Publisher Rob Brown prefaced it by saying his company (which also publishes the Industry Report) "takes the pulse of 1.2 million skiers/riders every day. We are convinced user-generated content is where the future lies." Brown said he believes the days of "the freeloading ski writer are long gone and the consumer is smart enough to read between the lines. Resorts need to do a better job of saying 'no.'" He said Mountain News is taking a hard look at media relationships and expects to lead the way in changes... MTS rolls on this week with plenty more workshops and another round of business-to-business sessions, this time between suppliers and groups. It ends Saturday... The show moves to Keystone next year.
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I do not agree that "the future is not in lift tickets" In fact I take exception to any speaker who seeks to point to any segement of our ski industry as more important. I subscribe to BALANCE where the skiing helps to sell real estate that in turn produces greater lift ticket sales. Experience over the past 47 years tells me that the most importanr ingredient in our business is SNOW. Neither 9/11 nor recession will stop skiers when the snowcover is excellent! |
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Posted by: Ted Farwell | April 10, 2008 11:00 AM
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