CEOs: Ski industry needs to shift focus from real estate | VailDaily.com

CEOs: Ski industry needs to shift focus from real estate

Arn Menconi
Special to the Vail Daily
Vail, CO Colorado

VAIL, Colorado – Ski industry heads met in Florida over the past week to confront what some said was the most challenging year ever for snow sports. The week was marked by looking back and moving forward, as industry heavyweights discussed the economy and what it might mean for the future of the sport.

“Never in living memory have more significant demographic and economic upheavals challenged our industry,” said Mike Berry, president of the National Ski Areas Association.

Berry’s comments set the tone for the week, which centered on caution with a slight whiff of optimism. Industry figures dipped slightly, to 57.1 million skier visits this year, down from 60 million the previous year, but a 3.8 percent rise from two years ago.

The conference highlighted the diversity of operations at ski resorts, offering a reminder that resorts aren’t just about skiing and snowboarding, but also include revenue from real estate transactions, golf outings, spa treatments and beverages. The meetings featured a blend of both small and large resorts, with representatives from more than 400 resorts in the U.S. Stephan Kircher, president of Boyne Resorts said the industry couldn’t rely on real-estate transactions to buoy their bottom lines.

“Real estate and second homes can’t be a part of the big plan,” he said. “All that we saw over the last 10 years won’t be seen again ” at least in our lifetime.”

Bill Jensen, CEO of Copper Mountain owner Intrawest, echoed the sentiments of others who felt the industry needed to refocus on its primary revenue source.

“We had been operating on the real-estate side which has gone down the toilet, out the street and now in the ocean,” Jensen said. “We need to focus on our core business again.”

The CEOs had ample ammunition to support the rhetoric, aided by research into market metrics. Many were troubled by long-term demographic trends that do not bode well for their future, as studies show 50 percent of youth are non-white minority, where 20 years ago, that figure was at 20 percent.

Since snowsports’ demographic is overwhelmingly white, many industry analysts felt that trend alone would have a significant impact if resorts don’t dramatically expand efforts to diversify their client base.

RRC Associates, a consulting firm for the industry, reported that snowboarding has hit a plateau, reaching 30 percent of participants nationally, and 20 percent in the Rocky Mountains. It found sales of season passes were flat, and the largest ski areas have seen a decline in the number of passes sold. More importantly, it discovered people were choosing to ski closer to home instead of packing their bags for a destination resort.

Vail Resorts CEO Rob Katz acknowledged the danger, but took a long-range view of the issue.

“Our industry is still doing quite well compared to tennis and golf,” he said. “We are in a sport that has a lot of appeal, and we’ve done an amazing job as an industry in creating passion with our customers.”

Beyond the immediate customer base, however, there remains an industry-wide need to spur that passion in others currently residing on the outer edges of the sport. The urgency of this push was articulated by one industry leader, who exchanged candor for anonymity.

“We have about 10 million customers a year in this industry, but we’ve seen acceleration in the loss of business,” he said. “What we really need at this point is to reach out to 150,000 new customers a year. This is an effort that requires greater cooperation moving forward, and we can only hope people recognize that before it’s too late.”