Slow going with no snow

Colorado ski resorts learn painful lessons in dry season

A skier tries to maneuver around patches of mud in early April at Vail. One of the worst ski seasons on record in terms of snowfall has forced resorts to cut costs and consider new strategies for the years to come. Enlarge photo

The Denver Post

A skier tries to maneuver around patches of mud in early April at Vail. One of the worst ski seasons on record in terms of snowfall has forced resorts to cut costs and consider new strategies for the years to come.

Low tide can be painful. And the 2011-12 ski season – one of the three worst ever in terms of snowfall in most every U.S. resort region – is spreading the sting from coast to coast.

“When the tide recedes so suddenly, you get to see the true nature and character of companies,” said Andy Wirth, the second-year CEO of California’s Squaw Valley, which saw a record 800 inches of snow in 2010-11 and barely 170 inches – a record on the opposite end – this season. “I would say this season has been humbling.”

U.S. ski resorts posted record visitation in the last few years, reaching more than 60 million nationally and more than 12 million in Colorado. Diversified resort operations – from real estate to lodging to lessons to dining – buoyed bottom lines, and aggressive snowmaking pushed resorts away from a live-or-die reliance on bountiful snow.

Then came this season, with snowfall so weak that Colorado’s snowpack is half its normal level. Skier visits were down around 7 percent before a record dry March effectively killed the season.

“This year certainly puts the perspective back on how much we really do rely on snow,” said Ethan Mueller, general manager of Crested Butte Mountain Resort, which expects to see visits fall 10 percent. “Maybe the industry can trump the economy, but snow is king.”

Final state and national skier visit numbers won’t be released until June. An 8 to 10 percent decline in visits would push the state’s 26 resorts to levels not seen since the 1990s.

Nationally, it looks like the ski industry will dip more than 15 percent, with visits plunging to near 50 million for the first time in 20 years.

Michael Berry, president of the 321-resort National Ski Areas Association, said the nearly 10 million-visit drop nationwide mirrors the season of 1980-81, when a dearth of snow in the Northeast, California and central Rockies rocked the industry.

“Usually, it’s just one or two (regions),” Berry said. “This is the first time in what, 30 years, that we’ve seen a line through all three. Our fundamental strengths remain strong, but this certainly was a weather-impacted year.”

Bob Knous was president of Colorado Ski Country USA in 1980-81. He remembers the state’s nearly 40 percent decline in lift-ticket sales triggering massive investment in snowmaking.

“There was a big movement in capital investment away from lifts to snowmaking. It was a major shift,” Knous said. “I used to say back then that we really are snow farmers, and sometimes you get a bad crop.”

Berry said this season also likely will prod resorts to strategically invest in snowmaking.

“We may not be as dependent on weather as we used to be, but we are certainly reliant on weather,” Berry said. “I think we will see a careful evaluation of particular snowmaking capabilities.”

It’s difficult to estimate how much the drop in visits will cost resorts. Skier visits, especially in today’s age of discount season passes, can range in worth from a few bucks from the ski-area local who logs 120 days to several thousand from the vacationer who stays in a luxury slopeside hotel and books private lessons.

Boulder research firm RRC Associates’ annual Snowsports Economic Analysis Report showed revenue per visit at resorts in the Rocky Mountain region was $84.51 in 2010-11.

Net income for ski-industry giant Vail Resorts’ fiscal second quarter, which ended in January, dropped 15 percent on a 5.5 percent fall in revenues.

Skiing is the largest engine for Colorado tourism, which is the second-largest industry in the state. A steep decline in skier visits could set back the state’s mission to climb its 2.6 percent share of the country’s overnight vacationers to 3 percent.

“It’s just one year,” said Al White, director of the Colorado Tourism Office, who years ago ran a ski shop at the base of Mary Jane ski area. “Not much we can do about weather.”

After nine straight winters of 300-plus inches, Monarch ski area’s longtime chief Rich Moorhead wouldn’t say his snow-drenched crew was complacent.

“We knew it could happen, but it just wasn’t happening,” said Moorhead on a recent balmy day as he crunched budgets for the next season and begrudgingly moved up his closing date a week because of lack of snow.

Asked how much he’s going to be down this year, he exhaled deeply.

“Oh, it’s going to be substantial,” he said, walking to his desk and banging on a calculator. “Without the final week, 17, 18 percent.”

Not every ski area lost visitors and money in 2011-12. The few resorts that harvested even average snow this year fared well.

Aspen Skiing Co.’s four ski areas were pacing slightly ahead going into March, thanks largely to loyal vacationers and international visitors who tend to view an Aspen holiday as more than just powder skiing.

“We are less reliant on big snowfalls,” said Aspen Skiing Co. spokesman Jeff Hanle. “We love to have them, but it’s not a make or break for us every weekend where there are 5,000 skier visits hanging on whether you get 2 inches or 12 inches.”

In Colorado, the Front Range’s Echo Mountain and Eldora saw strong gains in part because of heavy upslope storms that missed every other hill in the state. Still, Echo closed for the season last weekend because of warm weather.

“As our owner says, it’s better to be lucky than good. I don’t think it’s anything special we did. The snow came at the right time,” said Rob Linde with Eldora, which saw huge storms in February that forced the ski area to turn away visitors for lack of parking. “We know it can be feast or famine. It might be the reverse next year.”

Farther south, where La Niña delivered some of Colorado’s healthiest storms, Wolf Creek is expecting to be up 17 percent. Silverton Mountain will be up and Durango Mountain Resort also is expecting visits to climb.

The silver lining of the down year is how the low tide allows resorts to address issues that can be buried in big snow years.

“So many little things – inefficiencies – are hidden by volume,” said Monarch’s Moorhead.

Low snow proves the inflexibility of fixed costs such as chairlift power and labor. While many resorts were forced to lay off employees and cut hours, operators unearthed fresh strategies for pinching pennies and keeping employees working in the extraordinarily arid winter.

“This season forced us to new levels of efficiency and new levels of flexibility,” said Crested Butte’s Mueller, who staggered occasional lift closures and moved events to keep costs low.

“It certainly forced us to be more creative,” said Squaw’s Wirth. “You get to test people in this kind of environment. In that sense, we looked at this year as an opportunity.”

Optimism in the ski industry is perpetually rampant. It’s part of the DNA of resort operators. Even after a season that shakes foundations.

Look back at the worst seasons of all time – 1976-77 and 1980-81 – and both were followed by blustery winters of well-above-average snow. At Crested Butte, for example, the 1976-77 season’s record-low 61 inches of total snowfall was followed by a record 381 inches in 1977-78.

“One thing I’ve learned in my time in this business,” said Davey Pitcher, the 50-year-old owner of Wolf Creek whose family has run ski areas since he was an infant. “Every year you have a really bad year, you are one year closer to a record season. And every record season means you’re one year closer to a bad one.”