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« Previous Story | The Industry Report Home Page | Next Story » 'We'll Be Back' Even As New Reality Sets In Say Shannon, Katz At MTSBy Craig Altschul 
But, when all was said and done, it could be summed up by Shannon, a former Vail CEO, paraphrasing the famous quote from Arnold Schwarzenegger - "We'll be back" - and Katz blowing out the oft-perpetuated industry myth: "Snow does not trump the economy. It helps on any given day. It is the economy that drives us. We have to let go of 2008 and position our businesses to do well by preparing for the opportunities to come." "Yes, I'm optimistic," Katz said semi-seriously. I'm optimistic this season is almost over." He said we need to remember, "guests are fearful, but this isn't about us." We just got caught up in it all. "We have six months for things to get better," Katz said, "even if stability comes at a lower level." Looking toward next season and beyond, Shannon suggested that so many things aimed at Gen X'ers and their world are just passing fads. "But, family values won't change." He said consumers get back to what's familiar to them in times of stress and they know the meaning of value and price. Shannon said the mountain travel industry may be one of the best-positioned parts of the travel industry for a rebound, but right now "we need to focus on those consumers who have some money to spend. "Be careful. This is about market share," Shannon said. "Sell those season passes to locals when business is uncertain. Buy loyalty up front and give value back." Katz said that while everybody is talking about the baby boomer, "the echo boomers, the baby boomers' kids, are 12-25 and are the second largest generation ever." Terrain park development was "brilliant," Katz said. That evolution came at the right time with the right demographics. "Snow sports is cool now and has the right cache." He said the industry has a secure foundation "but we can't rely on the past five years. We have to get commitment to buy in." Shannon believes consumer confidence will start to return when they see home prices stabilizing, when they stop seeing their neighbors losing their jobs. "Ronald Reagan may have said it best when he asked 'do you feel better now than you did four years ago?' This is about the housing and job markets. Consumers will spend again when they get permission from their spouses." Shannon pointed to lift prices going from $30 to more than $90 in a relatively short period of time. "Consumers know a snake when they pick one up," he quipped. "Rekindling our customers is important right now. If you hear the sound of silence, you are in trouble. At least if someone complains about prices, that person is involved." Katz said the traditional booking season isn't likely to start in September, "but things will be a little better as consumers settle into the new reality. We are in a deflationary environment and everything costs less. We have the opportunity to build from this year and go from this new reality." He referred to being nimble by noting that "whatever price we set in July won't be right in December. "The truth is we don't what next season is going to be like. No one knows. I do think next year will offer a better picture over this year, but not over two years ago." Katz said the travel industry "has had heady years from 2004 to early 2008, but now we have to give back a little. Our customers are passionate. They don't want to go somewhere else. We really have to show consumers we understand their pain." "Look at a bigger picture," said Katz. "Look at your pricing over the past five years. If you've jumped 100 percent, then maybe a 20 percent discount is not so bad. Hotel rates have jumped 15 to 30 percent to the point that the St. Regis in Aspen was charging $1,600 for a night during Christmas week. The focus shouldn't be on just discounting, it's discounting off what." Shannon responded to a question about how lodges and resorts in "off the beaten track destinations" should be looking for business now. "I'd talk to the ski clubs. It's much easier to move affinity groups. It's lots easier to fill demand than to create it." He noted how the ski industry has a history of being a burial ground for major corporations dabbling in it from Ralston-Purina here at Keystone, Scott Paper, 20th Century Fox, Apex Oil, to AIG who still hangs onto Stowe. "It's all about who has the money," Shannon reiterated to a question on whether he sees more consolidations and new ownership groups. "If you can buy at wholesale, there are great possibilities for investors in the mountain resort industry. The big will get bigger." He said we hear all the time about bankrupt businesses. "It's not just this industry. There are going to be changes in a day of Velcro nametags." Shannon referred to politics and the latest round of government interventions by asking "are you happy with how government runs the post office?" He suggested everybody in Colorado contact their senators and get an earmark out of the stimulus for a rapid transit up I-70. "Tried and true travel is growing," Katz said. The consumer knows what skiing is. This is an opportunity to keep those you have. Focus on your core strengths and don't be quick to toss the baby out with the bathwater. We need to figure out how we can change while not getting stuck. "The level of passion and commitment to this sport is off the charts. It doesn't exist anywhere else," he said. What It Means: For all the concepts, best guesses, and comparisons to other industries, perhaps Klaus Obermayer, the wonderful, venerable elder statesman of this industry, summed it all up before the session even began: "We have lots to be thankful for." Then, he yodeled. « Previous Story | The Industry Report Home Page | Next Story » Comments
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Posted by: steve threndyle | April 1, 2009 05:53 PM
