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« Previous Story | The Industry Report Home Page | Next Story » Will New Ski Season Run Out Of Gas? Cautious Optimism PrevailsBy Roger Leo  Resort operators hope Americans will continue to make skiing and riding a lifestyle priority, but also are watchful as higher energy prices ripple through the travel industry. Stephen Kircher of Boyne Resorts is one among many industry leaders watching the impact of energy costs on operations. He cautions that higher gas prices raise the possibility of a change in the mindset of travelers. It will likely hit hard on destination resorts in Utah and Colorado, and long-drive resorts like Sugarloaf in Maine, if gas reaches $8 or $10 a gallon, he told the IR At the resort level, Kircher said, rising energy costs will put tremendous pressure on operators to reinvest heavily in more efficient snowmaking, or they won't survive. Alex Kaufman of Boyne's Sunday River in Maine says "we are expecting our guests to become more creative with how they travel to and from the resorts, meaning more people in individual vehicles and guests more likely to stay overnight and get two to three days of skiing rather than doing two to three one-day trips." "It's very much the same way people may go to the supermarket fewer times, but buy more when they go there. We always are open to gas-oriented promotions and have done them in the past," Kaufman said. Nimble resorts already are offering incentives this summer to keep people coming, and to stay longer when they arrive. For example, Spring Creek Ranch in Jackson Hole, Wyo., is offering a $75 gas card for guests who book a stay of three nights in July, August, and September. The ripples take many forms in destinations East and West and at Metro day/evening areas. They include higher air travel costs – directly in ticket prices or, indirectly, through airline bag-check fees and fuel surcharges; a nationwide trend to drive fewer miles without losing quality of life as Americans combine trips, buy smaller cars and share rides; and a quickening of an ongoing trend among resorts to operate more efficiently. The figures from the U.S. Bureau of Labor Statistics are alarming: A gallon of regular unleaded averages about $4.09, more in some parts of the country. The average suburban household spent $1,422 a year on gasoline five years ago, and now spends $3,700. But, Americans drove 11 billion fewer miles on public roads in March, than in the same month the previous year. Against this potentially alarming landscape, ski resort operators report seeing only a slight impact of higher gas prices as last season came to an end. The pump prices seemed to hit hardest among younger people, especially in areas like southern California, which was also economically distressed by the collapse of subprime mortgages. Mountain High outside Los Angeles detected a slight hiccup in visits by young demographic snowboarders toward the end of the season which, even so, was among the strongest in resort history. One resort operator in the Eastern Townships of Canada, speaking off the record, says "Things are rolling along nicely here. Not many Americans though. That is a little disappointing. We have seen a big drop in numbers compared to previous years. It seems like we have been hit with a multitude of different scenarios: gas prices, dollar value, weather, competition etc. It just does not seem to end." Ski resorts are no strangers to problems of gas price and supply. Many Northeastern resorts installed gas pumps during two oil shocks of the 1970s, to ensure that if their customers could get to the slopes, they could get home again. Vermont’s Okemo ran out of fuel for its own equipment one really bad summer day during the first oil shock in 1973. Okemo's Bonnie MacPherson recalls the time: "Just when it was thought that things couldn’t get any worse, the 1972-73 winter season was practically snowless, the economy was in a downturn, and two years earlier, Vermont’s pioneering environmental legislation, Act 250, made its debut. June 1973 brought severe flooding that resulted in heavy damage to Okemo's infrastructure." Then, the gas crisis struck. Supply and availability, not price, was the issue during that period. Okemo's management bought a 10,000-gallon tank from a Canadian company and had gas pumps installed at the mountain. A deal was struck in New Jersey for seven cents a gallon over cost with payment upon delivery. With that, Okemo guaranteed skiers that if they could get to the mountain, the resort could provide them with enough gas to get them home again. Berkshire East in Massachusetts wrote in its 1979-80 brochure: "Berkshire East has its own service station to assure you of a supply of gasoline for your trip home." Many areas joined the move to provide gas to customers in the 1970s, including Killington and Mount Snow in Vermont; Jiminy Peak in Massachusetts; Sugarloaf USA in Maine; Waterville Valley, Cannon, and Sunapee in New Hampshire; Peek-n-Peak in New York; and Camelback in Pennsylvania. What It Means: The lessons of the '70s were learned the hard way, but cautious optimism that skiers and snowboarders won’t shut down their passion is probably the right direction, at least for now. Still, a repeat of last season’s prodigious snows may be the least expensive fuel of all. « Previous Story | The Industry Report Home Page | Next Story » Comments
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Posted by: Mike Terrell | July 14, 2008 08:54 PM
