Out-of-towners back in town | VailDaily.com

Out-of-towners back in town

Allen Best
NWS Industry1 3-21 CS

The obituary for overnight and out-of-state visitors to Colorado’s ski resorts may be premature. By the middle of this season, evidence abounded from Aspen to Winter Park that these so-called “destination visitors” were returning and often by double-digit margins compared to last year.

From a purely business perspective, that’s nothing but good news. Across Colorado, destination visitors have accounted for 66 percent of skier days and an even higher percentage at more remote resorts such as Aspen and Crested Butte.

Overnight visitors’ impacts are lesser and their benefits larger, many in the industry agree. Instead of crowding the highways like day visitors driving to the slopes, they more-or-less stay put once they got to town.

They pay the sticker price on lift tickets, make their lodging reservations sometimes a year in advance and purchase expensive ski lessons.

In essence, destination skiers are the reason that Colorado resorts became so big and so good. They fundamentally financed everything from chair lifts to restaurants to cultural programs in ski towns. It was the next-best thing to just getting a check in the mail.

A bit of trouble

But after peaking in numbers in the 1996-97 season, the long slide began. From 66 percent of Colorado skiers, the destination guests had slid to 60 percent last winter, provoking introspection and also squabbling in ski towns as well as headlines such as “Downhill Slide” in The Denver Post.

“Colorado, the Grande Dame of winter, is in a bit of trouble right now,” summarized Ski Industry Management, a magazine geared for the ski industry. “Over the past decade, resorts in this state got lazy, and before they knew it, they were losing the one market segment they thought Colorado would never lose – foreigners and out-of-staters. Over the past six years, the state has experienced 1.23 million drop in skiers – not skier visits, actual skiers.”

That analysis, written in December, now looks myopic. That long downhill slide, it would seem, was mostly just the economy, stupid.

“This is the first year in several years when we haven’t had something of a cataclysmic feature on a global level,” says David Barry, senior vice president of Intrawest Colorado. The decline in destination skiers, he argues, was a response to specific events: 2000’s dotcom bust, Sept. 11 and the resulting travel seizure, two wars – and oh, by the way, a severe drought.

Vail Mountain’s chief operating officer, Bill Jensen, agrees. “The stock market came back to 10,000 in December and, psychologically, that’s an important threshold,” he says. “One year does not a trend make, but it’s encouraging.”

And, not least, the U.S. dollar has slipped badly against many other currencies, including the Canadian dollar. That has made vacations in Colorado less expensive. Whistler, in turn, has had a sluggish, soul-searching winter.

Still, there is broad acknowledgment that Colorado has lost ground in recent years – and could still slip again, despite this year’s big numbers. Colorado resorts, say observers, rode the gravy train of destination skiers, forgetting to reinvent themselves for a changing marketplace.

“Colorado has taken great strides in re-establishing itself during the last two seasons, but they can’t turn away from the challenge at hand, even for a second,” says one knowledgeable source within the industry. “And everybody in Colorado knows that.”

More competition

Colorado’s challenges come from near and far. Close by is Utah, with strengths parallel to those of Colorado resorts and still rolling from Olympic momentum. California resorts from Mammoth to Lake Tahoe are gussying themselves up and, to an extent, improving transportation links – their fundamental flaw as destination resorts.

“Tahoe resorts 10 years ago were completely cowed by Colorado’s product,” says Rick Kahl, editor of Ski Area management, an industry magazine. “They don’t feel that way any more.”

In New England, Vermont is reasserting itself, aiming to regain some of the luster it had in the late 1970s before Colorado assumed the title of skiing capitol of North America. In the wake of the Sept. 11-induced resistance to flying, Vermont’s resorts are making a bid for East Coast residents who’d rather drive to the slopes.

“The lesson learned by Vermont is the same thing that Colorado has learned during the last five, six or seven years – when you’re at your pinnacle, you have nowhere to go but down and to sustain being at the top is a huge effort,” says one ski industry insider.

As well, there are new ski areas in the West. “There’s a lot of capacity coming on line and it’s not based on the growth in skier visits,” notes Ed Ryberg, regional winter sports coordinator for the U.S. Forest Service. “It’s based on something else and I think it’s the ability to sell real estate.”

In western Canada, where Whistler has surged in years past, partly because of the lower value of the Canadian dollar, the provincial government has set out to double tourism in the next 10 years. Much of this growth is expected in the interior at Kicking Horse, Fernie and other resorts that Ski Industry Management’s Kahl describes as the “brave new frontier.”

This Canadian push, says one ski industry executive, is a “big deal.”

Internal causes

But the causes for the decline can also be found within Colorado. Officials point to the minimal government subsidy for tourism promotion since a state sales tax was scrapped by voters in 1992.

“In the early ’90s, people were pretty cocky, and the attitude was, “Look at this beautiful place, do we need to market it?'” says Jack Taylor, executive director of the Summit County Chamber of Commerce.

“So the dollars went away and our market share immediately dropped because we weren’t out there marketing our product. The recovery process is now probably more extensive than it needs to be,” says Taylor. He wants a dedicated funding source.

Not least, many believe Colorado got too pricey.

“I think cost is one reason for Colorado’s loss of destination skiers, and it’s not necessarily the price of lift tickets,” says Harry Frampton, a former executive at Vail and Beaver Creek who now heads East West Partners, the land development company.

“For example, we have a problem of not enough moderately priced hotels close to the ski resorts. In Whistler, you can get a new hotel near the slopes for $150 a night. You can’t do that in the Vail Valley,” Frampton said.

This slackened demand may have other, more diffused causes. People have been more inclined to vacation closer to home. There is a perceived and growing “time poverty,” which means people don’t want to spend two days traveling during the five days allocated to a vacation.

And finally, more choices are competing for vacation dollars. “When you’re dealing with people who don’t have the passion (for skiing) running through their veins, it is very easy to shift to another vacation alternative,” says Vail Mountain’s Jensen.

Added altogether, this doesn’t sound like a ringing endorsement for destination tourism.

Causes for confidence

But there is ample testimony to a strong belief in the future of Colorado’s destination business. From Breckenridge to Snowmass, ski area operators and others are preparing to invest what collectively is billions of dollars in housing intended to lodge vacationers. As well, lodging prices at some resorts seem to have been adjusted in the wake of Sept. 11. In Breckenridge, for example, Town Manger Tim Gagen explains that the number of rooms has remained more or less constant, but the amount of taxes collected on that lodging has declined 5 to 8 percent.

“That’s a pretty good indicator that the price point on the rooms is a little bit lower than it was just a few years ago,” he says.

Many see this as a badly over-needed correction in ski towns, where lodging prices steadily rose even as the quality eroded. Also pushing prices down, explains Jensen, has been the broadened use of the Internet by all consumers, leading to more bargain hunting for ski, lodging and travel.

Among those adjusting their prices has been Vail Resorts.

“If you look at Vail’s advertising this year, we did not do branding ads. We did retail ads. We talked about price,” Jensen says. “It was a very focused advertising campaign on our part to establish that you can come to Vail for a four- or five-day vacation at prices that are affordable. We’ve enjoyed success as a result.”

Rob Perlman, president of Colorado Ski Country USA, the trade organization, says that while vacationers may check out other resort regions, Colorado’s attributes will bring them back.

“First, Colorado is second to none in terms of offering winter vacation experiences. It has always been considered the leader and it’s still the leader. Colorado has a consistency of guest service, weather and snow. We have 350 days with sun per year and snow conditions are typically fantastic due to where we are located geographically,” he says. “And there’s a consistency of experience in terms of service, amenities and accommodations.”

Backseat drivers

Colorado destination resorts have also been working hard to recognize the more diversified market, as witnessed by the terrain parks now found at nearly all Colorado resorts. This blatant appeal to younger visitors is also an appeal to older customers.

Roger McCarthy, chief operating officer at Breckenridge and Keystone, points out that the person behind the steering wheel of the van from Texas may be a 40-something person with skis, but the person giving directions in the backseat is a teenager with a board.

But the real windfall in all this will be some years down the line, when the echo boom generation – now aged 21 and younger – begins booking vacations on their own.

That bulge is still coming down the pipeline, but the ski areas are laying the foundations now. The best example is the X Games at Aspen, of course, but other ski areas are taking similar, if smaller steps. Vail Mountain, for example, hosted the U.S. Freestyle Open and the Session snowboarding competition, and helped stage a show by Slighty Stoopid.

Staging such events allows Vail to strategically embrace the echo boom generation while continuing to provide the “Vail experience” to the resort’s traditional customers, Jensen says. “I view it as a strategy that will evolve over the next 10 to 20 years. You do not try to turn your market in two or three years,” he says.

Ryberg of the Forest Service also sees a delayed reaction at Colorado resorts to the echo boom generation.

“Colorado, by being such a destination area, is kind of out of the mainstream of what’s going on, the new dynamic of what is occurring largely near urban areas,” he observes. It will take years, he adds, for those teenagers on snowboards near Boston or Los Angeles to become vacationers in Colorado.

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