DENVER (AP) – For the third season in a row Colorado ski areas operating on public land paid record-high rent to their federal landlord, revealing the state’s resort industry is making more money on the hill than ever before.
Revenue-based permit fees from 22 Colorado resorts operating on U.S. Forest Service land climbed more than 11 percent to $23 million for the 2014-15 season, a record marked by the highest-ever annual rent payments from the largest destination ski areas.
That bounty of rent – $17.7 million of it coming from the 11 resorts in the White River National Forest, the most skied national forest in the country – goes directly into the U.S. Treasury.
That bothers both resort operators and local Forest Service workers who could use the surging fees to address the impacts of growing recreation.
There are efforts in Washington, D.C., to help individual forests retain fees its collects for use on its land, led by proposed legislation from Oregon Sen. Ron Wyden. As the Forest Service budget dwindles and the cost of firefighting gobbles a larger share, “there is growing interest” among lawmakers to help direct fees back to the forest where they are collected, said Melanie Mills, chief of the 21-resort Colorado Ski Country trade group.
“We have some of the most intensely visited recreational forests here in Colorado, and we are painfully aware of how much the agency is trying to do with a dramatically reduced budget,” Mills said. “Helping to keep some of those dollars on the ground would help relieve that pressure.”
That pressure shows no signs of abating. Especially as resorts, flush with cash, reinvest and upgrade facilities. Each new restaurant, renovated snowmaking system and replaced chairlift requires deliberate review by the Forest Service.
So does the exploding development of summer amenities, further burdening the overworked, understaffed and budget-strapped district rangers tasked with studying each resort plan.
“We are expecting some pretty heavy implementation of summer uses at Vail and Breckenridge,” said Don Dressler, who manages ski resorts for the Forest Service’s Rocky Mountain Region.
Snowmass and Copper Mountain also have presented the agency with sweeping plans for summertime recreation, part of the 2011 Ski Area Recreational Opportunity Enhancement Act that was designed to stabilize year-round economies in mountain communities anchored by ski areas.
“We are just scratching the surface on summer amenities,” said Dressler. Dressler helped Vail Resorts develop the nation’s leading summer recreation program at its flagship Vail ski area, which opens this summer with an alpine coaster, zipline canopy tours and a prominent environmental education component.
“I think that’s going to be the model nationally for how we engage the public in the summer,” he said. “It will be interesting to see how the public reacts and how it gets utilized this summer.”
The boom in summer recreation promises to grow resorts’ revenue-based rent checks to the Forest Service. But don’t expect resorts to sit back and bask in their windfalls.
Every resort manager knows they are one season away from acute pain. A surging dollar, a terrorist attack, an economic downturn and, most importantly, a dearth of snowfall can derail a record season in short time. Colorado has enjoyed a stretch with both a strong economy and solid snowfall, but that could change.
“We’ve had the planets in alignment for the last couple years, but you recognize when you work in this business, you are only a season away from trouble,” Mills said.
So watch for Colorado resorts to continue aggressive winter and summer investment – not just as a hedge but to gain a competitive edge in the country’s cutthroat resort industry.
“The benefit to the skiing public of all that investment is incredible,” Mills said. “Our game has never been as good as it is right now in terms of what kind of product we put out there.”
Rent payments typically are tallied and collected several months after the season ends, but early reports from Colorado resorts show the trend toward visitors spending more on lift tickets, season passes, on-mountain dining and lessons is continuing in the 2015-16 season.
But the strength of the U.S. dollar, which is sending international visitors elsewhere, coupled with back-to-normal snowfall at drought-plagued California resorts could slow the revenue growth at Colorado ski areas.
Still, resorts are trying to keep skiers spending.
Winter Park, for example, replaced a 40-seat warming hut with a 278-seat fine dining restaurant atop Mary Jane in 2014. Winter Park’s revenue-based payment to the Forest Service in the 2014-15 season grew 21 percent to a record $1.5 million – 50 percent higher than its 14-year average payment.
Now in its second season, the lines for $18 sandwiches and $14 soups at the swank Lunch Rock are longer than ever.
“I really thought this being the second season, that it would start to moderate up there,” Winter Park’s longtime boss Gary DeFrange said. “But it’s as busy now, if not more, than ever.”
Ski area rent increases
Colorado’s 22 ski areas operating on public land logged big increases in rent payments to the feds:
Growth in total Colorado ski resort permit fee payments in 2014-15 versus the 14-year average: 49.6 percent.
Growth in payments by 11 White River National Forest ski areas in 2014-15 versus 14-year average: 52.9 percent.
Growth in 2014-15 payment by Breckenridge versus 14-year average: 72.9 percent.
Growth in Breckenridge’s payment versus the year before: 22.3 percent.
Total 2014-15 permit fees paid by Vail Resorts for Vail, Breckenridge, Keystone, Beaver Creek: $13.85 million.
Total 2013-14 permit fees paid by Vail Resorts for Vail, Breckenridge, Keystone, Beaver Creek: $12.25 million.
