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Businesses seek creative solutions in Summit County

Devon O'Neil
Special to the Daily
Summit County CO, Colorado
Mark Fox/Summit Daily NewsAlan Henceroth, second from right, chief operating officer at Arapahoe Basin, meets with members of his staff, from left, Leigh Hierholzer, director of marketing, David Reynolds, vice president of finance and Peggy Hiller, assistant general manager, to discuss strategy and the day's operations Friday morning at the resort.
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SUMMIT COUNTY, Colorado ” Almost every day this winter, Alan Henceroth and his higher-ranking Arapahoe Basin staff members have gotten together to talk about something they don’t normally get together to talk about on such a regular basis.

Business.

Time was, such a topic that took care of itself in ski country. So long as you did the things it takes to run a mountain the way a mountain should be run, the business followed. People came, they shredded and reveled, they spent.



This year, as the Wall Street line graphs plunged and the R word leaped out of finance books and into real life, business in ski country has become a daily toil demanding constant attention, like an infant in a room full of marbles.

Thus the frequent meetings run by Henceroth, chief operating officer at the oldest ski area in the county.



With A-Basin’s skier visits down just a hair but revenue having decreased more significantly, Henceroth and his team brainstorm ideas to combat the climate. Nothing is too small to bring up.

Among the measures the ski area has adopted thus far: combining a piece of pizza and a Caesar salad and selling them for a dollar less than they’d cost on their own.

“We haven’t changed our (ski rental or lift ticket) prices yet, and I don’t think we’re going to,” Henceroth said. “We’re just trying to add value.”



It is an effort that, at the larger resorts, has included rare lodging deals and discounted skiing, a la Intrawest’s $99 Pow Pow Platter, good for a day each at Copper, Winter Park and Steamboat ” where a single lift ticket usually costs $91.

The value-adding process often doesn’t take much. Dave Stillman, who owns AMR Ski and Board Rental in Breckenridge, simply didn’t raise his prices this year. He was probably due to raise them, he said, but elected instead to promote the fact that he didn’t.

“On all our e-mail flyers and our webpage,” Stillman said, “we just wrote, ‘Hey, we didn’t raise our prices this year to help you out, but we’re hoping to make it up in volume, so tell all your friends!'”

Stillman also reached out to a market he hadn’t always pursued as heavily: locals. Season passholders now get demo rentals for $25 a day, more than 30 percent less than the regular consumer, a preseason move he made to combat the dreary projections going into the winter.

Ski-rental shops have actually benefited from the poor economy this year in an unexpected fashion: it’s now more expensive to bring your equipment on a destination vacation, meaning it costs about the same amount to lug old gear on the plane or rent newer stuff on site.

And it’s not just the independent shops trying to capitalize. Ken Gart, president of Specialty Sports, which operates more than 100 stores in Colorado including five in Summit County, notably Mountain Sports Outlet, and does more than $100 million in annual sales, recently approved a rare deal at the new Antlers store in Frisco.

For a limited time, skiers were able to rent planks, boots and poles for just $5.

“You kind of call an audible every day based on how things are looking,” Gart said four days after Christmas. “But they’re certainly looking better today than they were two weeks ago.”

Bye-bye, water cooler

Perhaps no market’s toils have been more closely scrutinized than real estate.

Barrie Stimson, owner-broker of Colorado West Real Estate Group in Breckenridge, said the number of transactions is down 40-50 percent from last year, but prices have dropped only 10-15 percent, something he called surprising.

“A lot of people will take their property off the market rather than sell for a lower price,” said Stimson, who is carrying about 50 listings, four times his typical load. “And that helps, because it reduces the inventory.”

Due to tightened lending practices, Stimson estimates up to half of this year’s transactions have been paid for up front, in full.

To offset the slower market, he has focused on small measures that become significant over time. He got rid of the water cooler in his office and took away one of the five phone lines, in addition to cutting his advertising by two-thirds.

“I’m constantly watching the thermostats to make sure people aren’t turning them up too high,” Stimson said. “I’m turning them down.”

There are similar trends in the local restaurant industry, where, for instance, some owners have rescinded their employees’ free meals, and end-of-shift drinks aren’t as liberally allowed.

The result of such heightened awareness has been positive, Stimson said. “My overall profit is down, but by trimming my expenses I’m still operating at a net profit.”

Self-decorating in Silverthorne

On the north end of the county, the Outlets at Silverthorne present an interesting dichotomy. “There’s more people coming,” said marketing director Jayne Esser, “but they’re spending less while they’re here.”

The Outlets use underground sensors to track the number of cars entering their nine parking lots; vehicle traffic increased 11 percent this past Christmas week from last year, she said.

To boost visitor numbers in light of the dreary economic outlook, the Outlets expanded their giveaways ” lift tickets, trips to Las Vegas and Santa Fe ” and put an increased emphasis on customer service, offering free gift wrapping, hot cocoa and cookies on weekends.

Esser also estimates they saved $5,000 to $10,000 by decorating for Christmas themselves, instead of contracting someone else to do it. She said they have been more aggressively marketing the Outlets to the Denver metro area via TV, print and radio ads.

Overall, however, the Outlets’ sales will likely be down three to five percent on the year, Esser said.

That is about the same prognosis the county government built into its budget for 2009 sales tax numbers, equating to a drop of about $250,000.

“We weren’t real optimistic for what ’09 would hold,” county manager Gary Martinez said.

The county hasn’t had to lay off any county workers yet, Martinez said, but he won’t fill a few open positions.

Summit’s 2009 general-fund budget is approximately $1.5 million less than what Martinez projects the 2008 budget to end at, a disparity enabled primarily by cuts each department was asked to make. Even the county library had its hours slashed.

‘I don’t sense the panic’

Perhaps the most constant question in light of these changes is when the doom will cease. Stimson, for his part, doesn’t think it will last the year.

“I’ve been through several down cycles,” he said, “and this one, based on the people who come here and are buying real estate and what they’re saying, I don’t sense the panic in people’s voices that I’ve heard in past down markets.”

Plus, he said, “People really love Summit County and they want to be here. It’s part of their life plan to be here.”

Back at A-Basin, Henceroth finished buckling his boots before heading out on the mountain. Later that day, the Basin made a surprise announcement: Montezuma Bowl would open the next morning, two weeks earlier than its debut the previous year.

“That’s our next big shot to get us through January,” Henceroth said, and in a climate where each day presents a fresh form of uncertainty, you got the feeling the news was enough to get them through this day, too.


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