Small Resorts in the West in Jeopardy (WSJ)

[wallyk]

Found this article in the Wall Street Journal this morning. Not news for most of the members of this community but the article certainly a catalyst for further thoughts about the current state of the US ski industry. With lots of talk about the Ikon and the Epic passes, the economics of owning and operating an independent ski area are daunting to say the least.

Lots of respect for those who own and operate a smaller ski area. IMHO these people and their staff represent the soul of skiing.

https://www.wsj.com/articles/anothe...&cx_artPos=2&cx_tag=pop&cx_navSource=newsReel

 

[Bill Miles]

I just read in the local paper that Soldier Mountain, in South Central Idaho, will be closing after only a six week season due to inadeqaute snow.

Things like that sure don't help.

 

[Core2]

Ski at these places because they won't be around much longer.

 

[CalG]

Ski at these places because they won't be around much longer.

The mountain will be around a long time to come.
The lift service? Perhaps not.

Perhaps I have become too disinterested, with two "abandoned" ski areas with in 15 miles of my home. Both are great, low key, places for "earning your turns".

 

[wallyk]

Spoiler: Derailed content deleted Left in spoiler for context

Sure, the WSJ can write about the small ski area going under after a bad snow season.

Only those who pay subscription can read it.

is that a list for the welthy to pick them up for cheap after this poor season?

Wow. This has to be one of the more cynical and bitter replies I've read in any forum in my brief time as a member.

Fact remains is that the ski business is an expensive industry that is laden with regulatory barriers: environmental, labor costs, and insurance, all of which suppress margins and make it more difficult for the independent operator to generate profits.

The point of the article is to highlight the difficulty that one small segment of the US economy is encountering that often goes ignored by most of the population.

 

[StuckonI70]

Great points in this post on how daily lift tickets have become devalued...
http://silvertonmountain.com/heli-skiing-walmat-and-the-epic-pass-era/

 

[MarkP]

At the risk of bringing a bit of politics into the discussion...

For as long as I can remember the "correct" thing to say is how important small/family businesses are, the backbone of America, and on and on. But our taxation/regulation/sort-of-free-market systems obviously (at least to me) favor the large. Survival of the fittest as determined by marketing budget.

BTW... I'm all for regulation and inspection. "Ski at your own risk" only goes so far with me. I expect to feel safe on a lift. When I go off-piste, I don't expect every tree branch to be trimmed above my head level; that's why I wear a helmet (retired the old one when dent area exceeded smooth... no comments about my ducking inability, please).

We all want to see the mom/pop resorts stay around, but also love the idea of access to multiple mountains at the best possible cost/day.

I don't know how to get to the proper balance, but it sure feels to me that the Dark (Large) Side of the Force is in ascendance.

Does anybody know which and when was the last independent ski resort that opened in the USA? I don't follow the industry closely, but all I can think of are expansions of existing places.

 

[Sibhusky]

There WAS Tamarack.... Oh wait, they are open again. Opened in 2004 with fanfare, but it's been a bumpy ride. https://www.seattletimes.com/busine...s-and-now-theyre-saving-the-idaho-ski-resort/

We have a local one named Blacktail that is for sale. Been open twenty years. http://flatheadbeacon.com/2017/05/03/blacktail-mountain-ski-area-listed-sale/

Down in Missoula, there's one that never got off the ground, Lolo Pass. https://www.hcn.org/issues/44.5/scars-of-an-unfinished-ski-area

 

[David]

The last few years I've been only skiing the small mom & pops! Just as much fun at 1/3 the price!!!

 

[Slide of Hans]

I think the last small independent to be built and open is cherry peak in Utah, 2-3 years ago. This year, they curtailed daytime skiing to Fri Sat Sun, but run daily at night.

 

[pete]

ref: https://www.wsj.com/articles/anothe...&cx_artPos=2&cx_tag=pop&cx_navSource=newsReel

The Story itself is fairly short and noted Donner Ski Ranch, Enchanted Forest Cross Country Ski and China Peak as examples where late and low snow amounts in recent (8 yrs or so) have hit earnings, example was 70%. This coupled with opening a month or two later ... killers on income

The long short is that other large resorts had more money at disposal to:

• invest in snow making
• create year round activites , eg: music festivals, biking, family fun, etc
• are destination resorts (my read)

noted was their considering/needing to invest in snow making.

Here in the midwest, I think that snow making has grown over the years and now simply standard that all the resorts I know of use. I could look outside just last week and note not an once of snow anywhere in town but my "local" hill Chestnut Mtn reported ~48 inch base. 50 degrees out but they like others build up their base knowing that if they didn't open every minute possible, they take a big hit.

 

[wallyk]

I think the last small independent to be built and open is cherry peak in Utah, 2-3 years ago.

When was the last major resort built in the US? Was it the Canyons?

Given how powerful and vocal the environmentalists and their lobbying arms are in the US, what is the probability that another major ski resort can be built and opened?

 

[Slide of Hans]

Tamarack most likely was the last major one from scratch. Canyons was previously Park West ski area before ASC bought it and expanded it.

I try to hit a small indy every westerm trip. I just stopped in at Pebble Creek id last week
On a JHole, targhee trip. Great old school vibe, cheap and steep, reminded me of the indy Magic Mtn VT.

 

[ChrisFromOC]

At the risk of bringing a bit of politics into the discussion...

For as long as I can remember the "correct" thing to say is how important small/family businesses are, the backbone of America, and on and on. But our taxation/regulation/sort-of-free-market systems obviously (at least to me) favor the large. Survival of the fittest as determined by marketing budget.

BTW... I'm all for regulation and inspection. "Ski at your own risk" only goes so far with me. I expect to feel safe on a lift. When I go off-piste, I don't expect every tree branch to be trimmed above my head level; that's why I wear a helmet (retired the old one when dent area exceeded smooth... no comments about my ducking inability, please).

We all want to see the mom/pop resorts stay around, but also love the idea of access to multiple mountains at the best possible cost/day.

I don't know how to get to the proper balance, but it sure feels to me that the Dark (Large) Side of the Force is in ascendance.

Does anybody know which and when was the last independent ski resort that opened in the USA? I don't follow the industry closely, but all I can think of are expansions of existing places.

I agree with your take on this 100%. Sort of nice to know that there are meaningful budgets available for maintenance and inspections on lifts, as that is not an area that is part of the known risk we assume when we ski.

 

[New2]

When was the last major resort built in the US? Was it the Canyons?

Given how powerful and vocal the environmentalists and their lobbying arms are in the US, what is the probability that another major ski resort can be built and opened?

Tamarack, Yosemite Club, Spanish Peaks, and Moonlight Basin are, I believe, the most recent. After some scary trips through bankruptcy, two of the four are still/back in business, while Spanish Peaks & Moonlight Basin have been rolled into Big Sky. All four were built on private land, which seems like the way to go in light of the federal permitting process (also potentially tribal, local, or state lands). But all four also clearly illustrate that the market is oversaturated and new destination ski developments in the US are a losing proposition.

So I don't think it's fair or accurate to blame the environmental lobby on the lack (and lack of potential) of new destination ski resorts on federal lands--by the way, I believe Beaver Creek, Colorado was the most recent, nearly 40 years ago. The Forest Service already has a huge amount of abandoned ski areas that it can't afford to rehabilitate, and this article just reinforces the idea that more are on their way to abandonment. I think there's very little appetite in the West to devote public lands to briefly enriching developers before a crash leaves the locals holding the bag (again). In the future, if things turn around to the point that there's really unsated demand for destination skiing in the US, then that demand is most likely to be met by private landholders (and there's tons of privately-owned ski country in Idaho, Utah, Colorado, and New Mexico) who can respond nimbly, or by tribes that could genuinely benefit from economic development, because the federal permitting processes are very slow and costly. And the blame for those cumbersome processes can be shared by litigious environmentalists, starve-the-beast Republicans/Libertarians who underfund the land management agencies, empire-building bureaucrats, and opportunistic lawyers.

 

[skidrew]

Tamarack, Yosemite Club, Spanish Peaks, and Moonlight Basin are, I believe, the most recent. After some scary trips through bankruptcy, two of the four are still/back in business, while Spanish Peaks & Moonlight Basin have been rolled into Big Sky. All four were built on private land, which seems like the way to go in light of the federal permitting process (also potentially tribal, local, or state lands). But all four also clearly illustrate that the market is oversaturated and new destination ski developments in the US are a losing proposition.

I assume you mean Yellowstone Club . . .

While you may be right about oversaturation, I don't think the bankruptcies of YC, Spanish Peaks, and Moonlight Basin are a result of oversaturation - they all went bankrupt as a result of the financial crisis in 2008, along with some shady financial dealings.

On the broader point, one big challenge is finding new areas for development - anywhere near existing facilities (airports, towns, roads) likely is already fully developed from a ski standpoint (absent carving a few more trails). And doing a "greenfield" development is really tough because of the need for infrastructure. Even if you had a great ski hill (or potential one) - how do you manage to get flights to somewhere nearby if the best airfield is tiny.

 

[skidrew]

Great points in this post on how daily lift tickets have become devalued...
http://silvertonmountain.com/heli-skiing-walmat-and-the-epic-pass-era/

Really interesting article . . . how does the revenue from multi-resort passes get divided up? Is it done on a per-use basis (i.e., if you use your X pass 5 times at one place and 10 at another does the first place get 1/3 and the second 2/3 of the pass cost)?

What I'm really wondering is why a smaller place can't join the pass groups and get some revenue that way.

 

[wallyk]

Tamarack, Yosemite Club, Spanish Peaks, and Moonlight Basin are, I believe, the most recent. After some scary trips through bankruptcy, two of the four are still/back in business, while Spanish Peaks & Moonlight Basin have been rolled into Big Sky. All four were built on private land, which seems like the way to go in light of the federal permitting process (also potentially tribal, local, or state lands). But all four also clearly illustrate that the market is oversaturated and new destination ski developments in the US are a losing proposition.

So I don't think it's fair or accurate to blame the environmental lobby on the lack (and lack of potential) of new destination ski resorts on federal lands--by the way, I believe Beaver Creek, Colorado was the most recent, nearly 40 years ago. The Forest Service already has a huge amount of abandoned ski areas that it can't afford to rehabilitate, and this article just reinforces the idea that more are on their way to abandonment.

Interesting thoughts..........was under the impression that the lack of major resort development was more attributed to the current federal/state regulatory climate and involvement of special interest groups and less about industry economics. Thought that I had read sometime ago, can't remember how long ago but believe that it was pre-crises, an article about California legislature suppressing the development of a proposed resort sized ski area.

So given current economics the US will probably not see another major resort built over the next 20-25 years?

 

[wallyk]

Making me think........does the US skier even want the smaller ski area any more?

What I'm really wondering is why a smaller place can't join the pass groups and get some revenue that way.

Great question. Have been looking at the listed areas on the EpicPass and reflecting about the evolution and objective of the corporate ski business model. For the moment this model, for Vail at least, appears to be about selectively identifying and acquiring smaller assets in key geographic areas to enhance revenue at the larger CO resorts. This is achieved by directing the local skier away from competing businesses in CO by incentivizing the skier with discounted options at the marque and probably high margin CO assets through the EpicPass. Vail's acquisition of Afton Alps in Minneapolis and Brighton in MI, seems to epitomizes this. Enhance the local ski experience and increase margins by leveraging the corporate marketing and hospitality arms into the local areas.

So looking at the assets owned by Vail, in order for the smaller area to participate in these broader more inclusive pass schemes, does the smaller area have to be owned by the entity issuing the broad pass?

 

[Itinerant skier]

It's not the regulatory climate, much less the environmental lobby. It's the snow. A quick perusal of any of the websites cataloging lost ski areas will find the words "......after several lean snow years" in almost every listing. Snowpack across the American West is down massively since 1915. This study was just published with some new, scarier data.

http://www.oregonlive.com/environment/index.ssf/2018/03/snowpack_in_western_states_dow.html