Aspen’s international business takes a hit
January 21, 2016
Going skiing, dining and shopping in Aspen leaves the impression right now that the annual Australian invasion is as robust as ever, but tourism experts said this week there are significantly fewer travelers from Down Under in January.
Travelplan Australia, a major ski tour operator, saw its business fall 30 percent to Colorado and 27 percent to Aspen this season compared to last, according to managing director David Withers.
Aussies aren't staying home and skipping time on the slopes. Instead many are finding cheaper alternatives to U.S. resorts in Canada and Japan, Withers said.
It all boils down to currency exchange rates. A trip to the U.S. is 40 to 50 percent more expensive this year compared to two winters ago, Withers said.
“The domestic traveler books later, has a shorter stay and leaves less money behind than an international traveler, in general, so it’s not a fair trade.”Ralf Garrison, DestiMetrics
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Aspen Skiing Co. and tourist accommodations are already feeling the sting of the loss of business. Australia is the top international market for Aspen-Snowmass. Brazil is another top market. Skico has forecasted its international business to drop this season, said Christian Knapp, vice president, marketing.
It will be tough to lure enough addition skiers from the U.S. to offset the losses, he said. "We're facing an uphill challenge," he said.
Incentives only go so far
Skico registered a 12.9 percent increase in skier visits during the first third of the season, through December. That lead could vanish in the middle third of the season because of the loss of international business. "We don't see a lot of international prior to January," Knapp said.
Joe Raczak, general manager of North of Nell Condominiums, said the complex at the base of Aspen Mountain is usually Australia Central at this time of year. International travelers typically comprise 85 to 90 percent of his business in January.
This year, North of Nell is down about 25 percent for the month. "All of it is international," Raczak said. Some of the travelers that typically would be in Aspen opted for trips to Canada or Japan, he added.
February and March look strong for North of Nell because of domestic rather than international travelers, Raczak said.
Skico, lodges and hotels saw the "headwinds" presented from the strong U.S. dollar months ago and adjusted. Skico offered incentive packages. Properties like North of Nell offered one free night for stays of eight days.
But discounts and incentives can only go so far. "If you're paying 30 percent more (than a season ago), Aspen is not a cheap vacation," Raczak said.
Australian professionals keep returning
Ian Purchas is organizing the Australian Accountants, Lawyers and Directors Conference in Aspen for the eighth straight year and 16th year overall. There are 250 conferees and family members attending, down from 275 last year, he said. He believes the decline is due to cost of a U.S. vacation.
However, the strong U.S. dollar probably has a greater effect on "how much they spend when they're here," Purchas said.
He is constantly assessing where to hold the conference. People like coming to Aspen for a variety of reasons. Non-skiers still find lots of activities to keep them busy, he said. Japan isn't a consideration because resorts don't have enough space to accommodate his size of group. Canada is an option and some of his earlier conferences were held there.
However, Aspen has offered the financial incentives to keep returning. "The Ski Company and The Gant look after us," Purchas said.
John and Lotte Turley, who are attending the conference, were taking a selfie at the top of Tiehack Tuesday morning when a reporter struck up a conversation with them. They said group rates they get for lodging and lift tickets helped make the trip more affordable. They wanted to visit Aspen, where John worked while taking time off as a student 20 years, so they didn't let the exchange rate sway their decisions. They were able to come back in May, when the exchange rate was a little more favorable, Lotte said.
The Turleys said they had no regrets about coming and the expense isn't scaring them away. "We talking about coming back to the conference again next year," John said, qualifying that by saying they would only skip it if their dollar falls significantly farther. They plan to bring their kids next winter.
No shop 'til you drop
Melbourne resident and avid skier John Paterson, who has visited Aspen with his wife and now family since their honeymoon 20 years ago, said the U.S. dollar wouldn't deter him from choosing to return.
Paterson said he thinks the number one factor influencing whether Australians will visit Aspen despite a strong U.S. dollar is their level of passion for skiing.
"The keen skiers — the ones that really want to ski — are happy to spend the extra money because of the exchange rate," Paterson said, adding that those who choose to stay at home and ski say the exchange rate has affected their decision.
"The people who know how awesome the skiing is here don't really look at the exchange rate as much as they look at the quality of skiing," he said.
Paterson said he thinks skiing in Aspen "is more bang for your buck," because skiing in Australia is also very expensive, he said.
Airfare aside, between lift equipment, passes, and lodging accommodations, Paterson said he thinks the cost to ski near his hometown of Melbourne is about the same as in Aspen.
Paterson said if he went to ski at his local mountains near Melbourne, the cost would be between $3,000 and $5,000 for a three- or four-day stay.
While these prices may not measure up to The Little Nell's nightly rates, Paterson said, they are comparable to some of Aspen's more affordable lodging options – like The Limelight Hotel, where he reported his Australian friends recently shelled out about $400 per night.
There is, however, one area of Paterson's stay that may be taking a hit due to the strong U.S. dollar: retail.
Paterson, who has two teenage girls "that love to shop," said he isn't making as many purchases in town compared with previous years.
"It used to be 30 percent cheaper to shop here, whereas now it's about the same price as back home, or maybe slightly less expensive," Paterson said.
Foreign travelers stay longer
Withers concurred that many Australians will continue coming to Aspen. "The good news is that, even with this drop, Aspen is still our number one resort, and is likely to remain that way," he said. "We anticipate moderate growth for the 2017 season, as Aspen is still the preferred destination for Australian skiers, and we expect our clients to get used to the idea that the U.S. is a more expensive ski destination."
The loss of international guests can have a major impact on the season outcome for ski resorts that depend on overnight visitors rather than day skiers, said Ralf Garrison, president of DestiMetrics, a Denver research firm that tracks occupancy and bookings trends for resorts in six mountain states. And Aspen is one of the resorts relying more heavily on international business, he said.
It is tough to offset the loss of international travelers with skiers from the U.S.
"The domestic traveler books later, has a shorter stay and leaves less money behind than an international traveler, in general, so it's not a fair trade," Garrison said.
Raczak estimated the average stay for Australian travelers is 10 days. Purchas said most of the individuals and families attending the professionals' conference stay long than the week of the event.
Garrison said most of his firm's clients have experienced very small growth in overall bookings rates for the winter over the last four or five months. The double digit gains posted in the years following the end of the recession have disappeared.
"You would say in economic terms the market is not well behaved," he said.
The strong U.S. dollar won't help that situation, but Garrison saw some possibilities for help for western resorts. Europe has generally poor snow conditions, so U.S. resorts could pick up late bookings and not lose domestic skiers to European trips. New England resorts are experiencing a "rough start" so its possible to lure more travelers from major markets such as New York.