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It’s ‘The Art Of The Deal’ As MTS Kicks In During Tough Times

By Craig Altschul
March 31, 2009

Keystone, Colorado: Maybe Donald Trump was right. Sometimes it truly is in "the art of the deal." Hundreds of buyers and sellers - tour operators, lodges, resorts - went at it in almost a business-to-business frenzy Monday on the first day of the two-day MTS Trade Exchange. Customers want to know "what can you do for me?" The answer is clear: value added on top of the deep discounting,. The Group Exchange comes later in the week.

"We began to analyze why five of our resort clients were up in business this season while all the others were down," Darryl Matevish of Rocky Mountain Tours told The Industry Report. "We discovered those resorts had come out early with products that were simple to understand and had a solid value-added component like a fourth night free included.

"Customers understood it, saw the extra value, and it was slam bam from that point. The truth is that resorts like Whistler, Vail, and Taos carried the day because of that," Matevish said.

Tour operator after tour operator told the IR the biggest story on the trading floor was the plethora of special offers that will appeal to customers next winter.

"The most unusual one we heard today," said Richard Rice, Director of the UK's Ski Safari, was a property offering free admission to a museum with a ski package." Rice's company is selling packages to Brits coming to the U.S. to ski.

"Another one that was interesting to me was offering money on the room tab as a credit that could be spent on meals at the lodge," Rice said.

Michelle Hagen, Chief Marketing Officer for Vacation Roost.com (Mountain Reservations) - a company that absorbed most of the assets of RDM/Moguls earlier this month (see The IR 3/15/09) - told us "deals are being offered faster than we can get them into distribution.

"This is what used to happen in the off-season when trying to drive guests to the resorts in the summer," she said. "It's definitely a ‘what can you get for me' mentality."

How about a bottle of champagne on ice when you get to the room? Hagen said that's a value-added offer. Other are providing free breakfasts in rooms. There are lots of free lift tickets out there, too.

"We have ‘Buy-Go' packages coming in where half of a guest's vacation nights can be free, such as buy one night, get the second free; buy two, get two, or even buy three, get three. Some offers have added $100 towards spa treatments. An up and comer is resorts offering on-mountain special activities free such as use of a kids' theme park or yoga classes," she told us. "We've even added in a credit to people who lose their jobs before they take the trip."

Several major tour operators would not go on the record, but supplied background. "Look," one major operator told The IR on our promise of anonymity, "Hotels are just very aggressive right now. They are more than willing to deal and they are going to spend more marketing dollars with us than ever before. The value-added is critical. Kids eat free, resort credits for dining, and very low, discounted rates are now the norm."

The Mountain Travel Symposium has a distinct international accent to it this week, seemingly more prevalent than in previous years. International buyers and sellers were hosted at an SRO lunch Monday by Mountain News Corp. (publisher of OnTheSnow.com and this e-letter). But there is a clear difference in attitude, and heavy discounting does not seem to be on their agenda.

"This is our first time here and we believe we have a real chance to get the U.S. market to come ski in France," a group of five salespeople from Meribel told us, almost in unison.

"Discounting is not an issue. Perhaps 10 percent, no more. You see, the quality of the French resorts and the prices across the board at these famous resorts is the lure."

The French sales team said they were surprised they did as well as they did this season given they were down 18 percent from the UK, Russia, and wherever there were currency exchange issues with the Euro. "We made up for it with heavy increases in German, Austrian, and Swiss visits that were essentially domestic trips - less long distance." That, of course, is a pattern that played out in the Northeast U.S. markets, too.

"We think working with the airlines to bring Americans to ski in France is important," Annie Martinez of the Rhone Alps, said. "We now can offer a flight from New York to Lyon and skiing is just a two-hour drive."

Another top level European tourism leader told us off the record, "I just hope my country doesn't discount for next winter. This year was in the black. The demand for Europe from Americans may be down for now, but they will see much better rates."

We were reminded more than once a recent study of global lift ticket prices showed American resorts had the highest prices in the world.

MTS will continue Wednesday and Thursday with the critically important Forum platform and workshop sessions. We'll keep you updated.

What It Means: MTS co-owner Michael Pierson said last week in The IR that he expected the week to be all work and little play. He was dead on. Play isn't on anybody's agenda.

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