Saturday, July 26, 2008

Ski Resorts Not Exempt From Economic Woes!


I’m often surprised at how many people perceive the ski industry and how it’s affected by the economy. Lot’s of people think that ski resorts and their quests are isolated from the downturn of the economy because of the perception that skiing or snowboarding are wealthy people’s sports. While skiing is expensive and many resorts cater to people that are willing to pay a little extra for their vacations, the spectrum of people that ski is wide and most of these people have jobs, families, and mortgages. Those three things right there are going to come before skiing and that is why some economists are predicting that this winter will not be a good one for resorts across the United States. While last year saw records shattered across the country, it was ahead of the $4 plus a gallon cost for gas, the surge in oil prices, and let’s not forget about the airlines – a lot of resorts count on travelers who comes from away. While there have been several signs of this in the east and they have been reported on locally, I think that a good indicator is with the country’s only publically traded ski resort holding company, Vail Resorts. The owner of Vail, Beaver Creek, Breckenridge, Keystone, and Heavenly, Vail Resorts shares have tumbled recently, falling for the low $40’s to the mid to low $20 range. The stocks fell further this week as Wall Street analysts downgraded Vail’s status from a stock to buy to one to hold off on. Some people were surprised that Vail Resorts would be so directly impacted. Just look at the list of resorts and you see five extremely large destination resorts that each draw near to or over a million skier visits each year, but many of these people comes from all over the United States and get to the respective resorts by plane. In case you haven’t heard, airline tickets are expected to double in price by early next year. That’s a big punch in the stomach to some of these resorts. While Vail in Colorado and Heavenly, which straddles the border of Nevada and California, may be more insulated because of their massive European share of visitors and the weak dollar, there’s no promise that those numbers will hold. In all, it should be an interesting time for skiers and riders all over the country and a time where resorts will need to make cost cutting changes to help manage their places in the market in the hopes of drawing and retaining skiers and riders.

3 comments:

Unknown said...

I agree with the author. Vail is no Aspen. Real estate is many times more expensive in Aspen. Aspen is over 100 + years old and Vail is 40 years old. The point being Vail (while they like to say that they are not dependent on the Denver Metropolis... the truth of the matter is... they are, and to boot Denver was recently listed as one of the top foreclusure places in the country. I personally never liked Vail due to the fact of where it sits. Thre is no room until you get to the back bowl. Not to mention I find Vail to be a hassle to fight the parking and crowds. Plus I feel there is a desperation to crank out skiers like a fast food restraunt. Wheeling West Virginia is less claustraphobic in my opinion... and the faux Austrian architecture gag!!!! I, of course am biased (due to the above) but I do ski Heavenly and I enjoy Keystone. As far as Vail resorts goes...what was the saying? "fasten your set belts it's going to be a bumpy ride!" They posted a double digit loss 4th and 1st q. of 08 and this was with record snow in the area. Maybe the R.F.I.D. chips (mandatory in the ski jackets of all that ski Vail in the 08-09 season...) that are popular amongst conspiricists will bring the globalists to test them out!!!The truth is who has time for skiing when we are a country in decline and perhaps a world on the brink!

Frenchiexno1 said...

Don't forget though that the low dollar is now making it an attractive destination for Europeans and other people around the world keen to get more for their money!

OIMS said...

You're right. I would have thought "snow or no snow" but cost of living would definitely be a huge factor.