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Down, But Not Out: That's The Latest Snapshot Of North American Bookings

By Roger Leo
December 01, 2008

Resort and tour operators across North America are watching the behavior of consumers as winter arrives and the American economy lurches from one piece of bad news to the next. They hope that in the current unprecedented conditions, the adage that snow trumps the economy holds true. Recent weeks have given some reason to believe it will.

Now they're hoping that a promising start to the season in many parts of the continent will hold up. Here is the freshest possible picture:

"Right now, we’re kind of projecting the season out, and figure we’ll be off five percent to 15 percent," David Perry, Aspen Skiing Co. senior vice president, told The Industry Report. "That’s a snapshot taken today of the entire season. But it’s difficult to predict because the circumstances we find ourselves in are different from any other circumstances we’ve ever seen."

Bill Rock, president and chief operating officer of Snowshoe Mountain in West Virginia, said, "Everyone’s on pins and needles. If the automakers and other large industries continue to struggle, it’s anybody’s guess."

Dan Markham, director of sales and marketing for SkiBig3 in Banff/Lake Louise, told us, "No question for sure that we’re going to be down from the previous year. It’s one of the toughest years the world has seen in a while."

Trends are not all downward at those resorts, however, and indeed are looking up elsewhere.

"Bookings are going well for us, actually," says Julie Maurer, vice president for marketing and sales at Booth Creek Resorts. "In our overnight lodging bookings at Northstar-at-Tahoe and Sierra-at-Tahoe, we are up 9 percent over the same time last year. We definitely need to get open, and it would be good to get natural snow to keep the momentum going. But we’re also up 33 percent in season pass sales, and up quite a bit in bulk ticket sales to corporations.

"Those are the three barometers I watch - bookings, season passes, bulk tickets - and they’re looking very good right now," Maurer said.

One indicator of strong consumer interest in skiing in general has become evident. Drive-to resorts in the Northeast are seeing strong - even startling - season pass sales that run counter to pre-season concerns.

Wachusett Mountain Ski Area in Massachusetts is 27 percent above last year at this time; Okemo Mountain Resort in Vermont is up 17 percent overall year-to-date, and 168 percent on college passes; Cannon Mountain, N.H., is up 100 percent in season pass sales compared with last year at this time. Many other resorts report similar trends.

Unprecedented economic turmoil makes it more difficult than usual to forecast the season ahead, but here’s what we found in discussions with industry figures across the continent.

All Are Concerned

Everyone we spoke with is concerned about how the season will unfold, and most are convinced business will be down from last year. Estimates of the dip range from 5 percent to more than 20 percent. Several, however, foresee better seasons than last year.

Early season bookings made from September to mid-November were down compared with last year. This early trend has prompted resorts and lodging venues to offer deals that, one travel lodging CEO says, are the best in his experience.

All industry leaders are watching the weather on grounds that snow trumps the economy, and see signs of a surge in interest driven by cold, snowy conditions and early openings in Eastern North America.

Several resort and tour company operators across the country report an uptick in interest and reservations over the last two and a half weeks. Season pass sales at drive-to resorts near large population centers are up.

Aspen’s David Perry said Aspen/Snowmass are enjoying a better start than last year, when much of the West was warm and dry for Thanksgiving.

"The booking pace is behind from a year ago, but it’s a little bit hard to tell because the situation is very volatile. There has been a lot of movement the last two weeks, with the booking pace picking up. For the six weeks prior to that, it was like the entire world had its collective hand on the pause button," Perry said.

"Mid-September to the beginning of November saw a very slow pace. As the world absorbed the economic turmoil and consequences of it, we definitely saw bookings slip behind pace," he said. "It’s not like 9/11, when we saw a fear-based travel shock. It’s not like a normal recessionary period, because of the global nature of it," he said.

"Also, it’s an economic double whammy. We do extremely well with international business at Aspen/Snowmass. Now we have a recessionary economy in the U.S. and a strengthening currency against international markets. That means weakened prospects out of the domestic market and out of international markets both together," Perry said. vAdvance bookings are a bright spot at Aspen as elsewhere, where travelers locked in trips ahead of economic turmoil.

"Lots of international travelers are very savvy that way. We saw some strong early bookings - June, July, August, the first part of September were very good, on or ahead of last year’s pace, which was very successful," Perry said.

He said other significant bright spots in Aspen’s season include a strong January thanks to international bookings and the Winter X Games, all of February through Presidents' Week, Mardi Gras, and Spring Break.

Early Season Pause

"The weakness we’re seeing is early season through Jan. 10. That’s prime booking season, and it dried up. It’s hard to recuperate from that six-week pause in bookings. That said, the last two weeks, we’ve seen a resurgence in bookings pace. Since the presidential election, we’re seeing more confidence," Perry said.

Snowshoe's Rock says the Allegheny Mountain resort is enjoying the best start he’s ever seen. "We’ve already had over 63 inches, with more forecast the next few days. We opened a week early, and we’re very excited."

"Definitely we’re concerned. We’re off in December. It’s softer than last year. But right now there’s an interesting note: We’re seeing significant clawback compared with last year, since the snowstorm. It’s allowed us to really gain over last year’s pace, and we’re getting back in the game. We’re close to last year to the extent that I think we’ll exceed last year for this winter," says Rock.

"For the industry, it tells me there is demand, the market is waiting, the window is tightening, that people will book, they’re just waiting," Rock said.

He said that people normally book 58 to 60 days in advance of arrival, but are booking 30 days out or less this year. "What that means for the industry is that weather is going to play an even more important role than it ever has," Rock said.

He said Snowshoe’s Thanksgiving weekend is 50 percent stronger than last year based on snow and early opening and that pre-Christmas week is also ahead. That tells him customers are looking for value.

Banff's Markham said early numbers from the United States are down, largely because Americans seem to be flying less and driving more and staying closer to home. "Bookings made in September and October are down from last year, but every time we send out an e-blast, sales go back up.

"One of the bennies this year is that last year the Canadian dollar was at par and now there’s a 20 percent advantage for Americans coming to Banff. Is it going to be enough to make up for the R word south of border? I’m not sure," he said.

Julian Castelli, CEO of VacationRoost.com and Mountain Reservations, said, "We were doing pretty well until the financial crisis in mid-September. At that point, we saw bookings drop across the board, not just for ski resorts but warm weather destinations as well. Advance bookings had kept things from being down as much through the fall. Bookings after Sept. 15 have been off, for six weeks the whole nation was paralyzed watching TV and their 401ks."

Given Up Gains

"We’re down significantly from last year at this time. Last year was a very good year, up over 20 percent from the year before. We’ve given up at least last year’s gains and then some," Castelli said.

"The whole industry is hoping for a good year, and that the benefits of good snow and good skiing can offset what’s unmistakably a difficult economic environment," he said.

"We think there’s a huge opportunity for consumers, the ones who go skiing every year and make it part of their lifestyle. There are more deals, specials, and values than we’ve ever seen as a company," Castelli said.

"We still have holiday lodging available, and this time last year it was all sold out. Resorts are coming to the table and providing deals that can mean savings of 20 percent or more on premium lodging over Christmas and other holidays," he said.

Luc St. Jacques, head of a B&B Association in Quebec’s Eastern Townships, said reservations are running at 60 percent to 70 percent for the Christmas holidays, double last year’s rate.

"It’s a good sign because what we’ve seen in our sector is that people are very last minute," St. Jacques said. "It costs Americans 20 percent less to come here and play," he said.

What It Means: The Big 3's Dan Markham probably summed up most everyone's thinking when he told us, "It’s one of the toughest years the world has seen in a while." But, credit Julie Maurer with the best line of all on the reason Northstar is flying high in the midst of all of this turmoil: "It's either we have a brilliant marketing team or a target market of 11 million people."

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Comments

	One thing that we are seeing is that airfares are coming down to reasonable fares and once travelers see that, we expect bookings to increase. And with average booking taking place in 29 days of arrival and that decision is taking several weeks to make, with some good storms, resorts should begin to see new bookings.
	Posted by: Michael Landau SkiRover.com | December 2, 2008 08:30 AM