It could be a record season, if …
November 22, 2005
This ski season has an eerie feeling, like the stars are aligned too well for Aspen and Snowmass Village.Even when the ski industry hype is filtered out, every bit of information and economic indicator points to a rosy 2005-06 campaign. For example:• The Aspen Skiing Co. is on a roll. The number of lift tickets sold has increased each of the last three seasons and appears poised to grow again. Company officials have budgeted a 2.5 percent increase.• Thanks to the ESPN Winter X Games and other marketing moves, Aspen seems to have shed its image as an exclusive playground for rich old men. The actual demographics show Aspen/Snowmass customers are older than those of the ski industry as a whole, but at least the perception of Aspen as a hip hangout for younger generations is improving.• The loss of the bed base has been slowed thanks to a fractional ownership craze that has gripped town. While there aren’t as many hotel and lodge rooms as there once were, at least the new properties being developed will regularly provide a fresh supply of people to buy lift tickets, dine in restaurants and browse in shops.• The Skico is priming its main pump, Snowmass ski area. A new base chairlift was added that will whisk skiers and riders off Fanny Hill and plop them down on Sam’s Knob, reducing the ride time and lift exchanges to the popular Big Burn.And the improvements will keep coming over the next two years. A gondola will be built from the new Base Village to the bottom of Elk Camp in 2006. The chairlifts serving the Big Burn will be upgraded in 2007.
Skico Chief Executive Officer Pat O’Donnell likened the improvements to Christmas. The gifts just keep on coming for Snowmass loyalists, he said. Skico officials say Snowmass could top 1 million skier visits once the improvements are finished.All the positive factors have even prompted Skico managing partner Jim Crown to drop his guard just a bit.”Most of the indicators look pretty positive,” he acknowledged. “Things are setting up fine.”Just add normal or above-normal snowfall and it looks like a winning recipe. And it’s not just Aspen that’s upbeat.If there is good snow nationwide, expect “a monster season,” said Jerry Jones, a ski industry consultant based in Eagle County.There is a “true sense of optimism” in the ski industry that last season’s 56.9 million skier visits nationwide can be topped, according to Michael Berry, president of the National Ski Areas Association of Lakewood, Colo. Last year would have been a record season if not for poor snow in the Northwest, he said.”We never, ever forget that we’re a weather-dependent industry,” Berry said.Aside from the snow, there are a handful of factors that will dictate the success of the season and the longer-term health of Aspen’s ski industry. Following is The Aspen Times’ look at those factors.
The Aspen Skiing Co. has a two-pronged mission of keeping its old, reliable customer base around as long as possible while cultivating a new crop of skiers and riders. Age will inevitably catch up to the 77 million people in the “baby boom” generation and force them out of skiing. As of this year, about half of the boomers will be 50 or older. The Skico wants to make sure the next generations, which aren’t as numerous as the boomers, will be around to buy lift tickets.Keeping the old while attracting the new isn’t impossible, it just requires diversity, according to Skico Senior Vice President of Marketing and Sales David Perry. That’s why the Skico places as much emphasis on the groomed corduroy slopes at Snowmass as it does on the Aspen Highlands steeps that make most skiers’ knees knock.Regardless of whether you are talking about young or old customers, the goal is to keep your core business – people who ski or ride seven or more days per season, said Perry.For baby boomers, that probably means meticulously groomed slopes, slopeside lodging and user-friendly equipment that enhances their abilities on the snow. Skico has one of the highest levels of repeat business in the industry, according to company officials. Marketing Director Jeanne Mackowski said 73 percent of guests return within five years of a visit.In order to retain younger skiers and riders, the Skico is offering the 48-degree pitches served by the new Deep Temerity chairlift at Aspen Highlands. An increasing number of customers are looking for that “in-bounds, backcountry experience” offered by Highland Bowl and Snowmass’ Hanging Valley Wall.Statistics do show that the Skico has reversed, or at least slowed, the steady aging of its customer base. The median age over the course of the 1996-97 season was 37 years, Perry said. That climbed to 44 years old, where it stabilized in 2002-03 and 2003-04. It fell to 41 years old last season, he said.
Along with keeping its core customers, the Skico constantly tries to tap new markets. The two biggest apples of its eye are international guests and ski groups, which can be anything from a big-city ski club to a corporate gathering.Business from overseas markets last season accounted for 105,000 skier days – or purchases of full- or half-day lift tickets, Perry said. Australia and New Zealand nosed out the United Kingdom as the Skico’s top international market. Brazil was a more distant third.All told, foreign visitors comprised 18 percent of Skico’s destination business last winter, up from 16 percent the season before. Growth is anticipated again this season because of the marketing effort poured into key countries and because the dollar remains relatively weak compared to other currencies.The Skico has five marketing executives working on international business.While international business has great potential, group business is the foundation of the Skico’s season, according to Perry. Ski groups from places like Cleveland and Texas accounted for about 100,000 skier visits last season – a figure the company wants to increase. It’s lucrative, Perry said, because it can be booked in advance and potentially used to fill in times of the season that aren’t as busy.
Skico managing partner Jim Crown said 2005 through 2007 will mark the largest capital improvement program he will oversee with the company. The Skico plans to spend $40 million to $45 million on chairlifts, restaurants and other on-mountain amenities over that period in addition to the $750 million development of Base Village, the new amalgamation of shops, restaurants, lodging and skier services at Snowmass.The Skico is replacing the cabins and much of the infrastructure in the Silver Queen Gondola on Aspen Mountain over a two-year period starting this year. The Deep Temerity chairlift has been added at Aspen Highlands to serve 180 acres of new expert terrain this season (and probably about 300 new acres within a season or two). That lift doubles the length of expert terrain in Highland Bowl and Steeplechase as well as the glades and chutes in between.But the big push is coming at Snowmass. A new high-speed, six-passenger chairlift called the Village Express will haul skiers and riders from the base area to the top of Sam’s Knob, one ride away from the top of the popular Big Burn.Next year it will be joined by a long-awaited gondola from the base to the bottom of Elk Camp. The two chairlifts serving the Big Burn are due for overhauls the following year – Big Burn chair will be spruced up with new parts and materials, and Sheer Bliss will be upgraded to high speed.These upgrades and additions are key, said Chief Operating Officer Mike Kaplan, in order to keep up with customers’ demands and expectations.”The on-the-slope experience, we believe, is better here than anywhere,” he said.Last year, Snowmass accounted for about 55 percent of the Skico’s 1.37 million skier visits. It’s already the Skico’s bread-and-butter mountain, but company officials believe they haven’t tapped its potential. Kaplan said a record 900,000 skier visits is attainable once the improvements are completed, and 1 million visits isn’t out of the question in the long run.Skico officials are confident they can increase their business dramatically without harming their four areas’ reputation for short lift lines and uncrowded slopes. For about 130 days of the typical 140-day season, Kaplan noted, the Skico accommodates about half the number of skiers and riders that the mountains could hold..”We’d like to see some growth,” he said. “We’re still not back to our peak in the late 1990s.”The record year for the Skico was 1997-98, when the company recorded 1.56 million visits to its four mountains.
Five or so years ago Aspen seemed in danger of becoming an exclusive enclave of second homes, which aren’t regularly filled with people who buy lift tickets, shop at local stores and eat at Aspen restaurants. Lodging properties were converted to private residences more quickly than believers at a Southern Baptist church.City of Aspen data shows that there were 10,000 “pillows,” or places where tourists could sleep, in 1994-95. That included each bedroom in each tourist unit. The number has sagged to 7,300 pillows.But at least the hemorrhaging has stopped. There has been an explosion in development of fractional-ownership projects – upscale timeshare properties where buyers actually own property, not just access to it for a couple of weeks per year.The Skico likes the trend because those projects provide “hot beds,” or places that regularly move potential customers in and out.Even with the current or proposed development of at least six new properties at or near the base of Aspen Mountain, the new units won’t offset the loss of 2,800 hotel and lodge rooms over the last decade, according to Perry. Meanwhile, other ski resorts have added to their inventory of tourist accommodations over that decade.”We’re headed in the opposite direction of everyone else, all our key competitors,” said Perry. Vail and Beaver Creek have added bed base. Park City’s growth after the 2002 Olympics has created sprawl problems, he said. Stowe and Crested Butte are adding to their inventory.The Skico is trying to do something rather than just sound the alarm about the problem. Base Village will add 600 condominium and hotel units when completed.
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Along with the unpredictability about the weather, a perennial problem, the only truly threatening cloud on Aspen and Snowmass’ horizon, is air access.United is severing is relationship with Air Wisconsin, so it is uncertain who will operate service between Denver and Pitkin County’s Sardy Field after the ski season.About 50 percent of all destination guests – those who come from outside the state and stay at least one night – fly into Aspen, according to Perry.Even more important than who will fly in here is what they will fly. The jets that currently serve Aspen belong to Air Wisconsin. United’s new partner will have to provide its own planes for the service.United officials have assured the Skico that jet service will continue, Perry said, so he’s counting on their word. Crown wonders if it will take a year or two to restore service to the level Aspen has now.”I think the airlines only react,” he said. “They aren’t pro-active.”If it gets tougher to reach town, Aspen’s customers in future ski seasons might be the most loyal in the country. There just might not be many of them.Scott Condon’s e-mail address is email@example.com.