Aspen’s ski season: Which way will it go? | AspenTimes.com

Aspen’s ski season: Which way will it go?

Scott CondonAspen Times Weekly

ASPEN Aspenites have been self-assured for decades that their economy is insulated from national economic crises. Turns out that was a myth.The reasoning seemed sound. Aspen operates in rarefied air, and not just because of its high elevation. The people who own swanky second homes, fractional ownership units in luxury developments, or who stay at high-end hotels here are among the wealthiest people in the world. Their portfolios can take more hits than Sarah Palin and they would still spend.But this economic crisis is different, as has become all too apparent in recent weeks. It hit the upper income brackets harder and more quickly than prior recessions. There are still a lot of affluent people with money to burn, but luxury spending can be perceived as gauche in times like these.Conspicuous spending is out of favor. People have deep pockets but they have short arms right now. They dont want to reach into their deep pockets, said David Perry, Aspen Skiing Co.s senior vice president, mountain division.And the question, of course, is will they?

Aspen and Snowmass, along with many other resorts, are buried in an avalanche of bad economic indicators as the ski season gets underway this weekend.There is general information showing just how shaky the mood is among American consumers. A USA Today/Gallup poll conducted Oct. 20 showed that 55 percent of Americans will cut back on spending because of the poor economy. Particularly troubling for a travel destination like Aspen was the surveys conclusion that 34 percent of Americans will cut their holiday travel.The negative prognostication is also specific to the ski industry. RRC Associates of Boulder performed a special study for the Denver-based National Ski Areas Association this fall that looked at the impacts of recessions on skiing. One of the conclusions was that the macroeconomic conditions that set the tone for the ski season are already locked in place. That is troubling for destination resorts like Aspen and Snowmass those that rely on out-of-state travelers coming for overnight stays.At the very least we anticipate seeing skiers and snowboarders staying closer to home, utilizing less expensive, drive-oriented, regional resorts, and taking more day trips, said RRC Associates report. Remote destination resorts that are isolated from large local population centers will be the most vulnerable if snow is poor.If snowfall is above average, the report suggested, it will increase the prospects of a decent season for the ski industry. Data in the report, in fact, showed that exceptional snow years trump a poor economy. Last year a record 60.5 million skiers and riders hit the slopes nationwide even though consumer confidence was starting to slip. Skiers still come out to ski even if the economy stinks.Ralf Garrison, the director of the Mountain Travel Research Program, isnt sure that trend will hold true this winter. It would be naive to think snow alone will solve the problem, he said.Destination resorts are facing formidable headwinds this winter, Garrison said. Reservations are down 13 percent collectively in major resorts his organization surveys in the western U.S. and Canada.

Aspen and Snowmass business leaders say their local occupancy projections are particularly bleak for the first six weeks of ski season.From the start of the season up through the holidays to about Jan. 10, the pace of bookings is well behind last year, Skicos Perry said. We’re behind the pace in December pretty dramatically, even through Christmas.The holiday malaise alarms veteran lodge operators. Christmas and New Years is when many resort businesses finally cash in on a year of hard work and log their profits. During a typical Christmas-New Years week, another guest cannot be shoehorned into town. This year, lodge operators are hoping they get last-minute calls from people seeking a room.There is Christmas space all over town which is hard to believe, said Warren Klug, general manager of Aspen Square Condominium Hotel.As of the Nov. 20, the Christmas week occupancy was in the 70 percent range rather than the usual 90 percent range, said Bill Tomcich, president of Stay Aspen-Snowmass, a central reservations agency.Advance reservations for the lodging industry are the cornerstone used by other businesses to project their volume for the winter. If people arent booked to stay, then they wont buy lift tickets, go out to eat or shop.Based on the reservations as of Nov. 15, the Aspen Skiing Co. forecasts that lift ticket sales to destination skiers will be down 12 or 13 percent, Perry said. (Destination skiers and snowboard riders from the U.S. and abroad, account for about 70 percent of the Aspen Skiing Co.s business, according to Perry.)The bookings will change, for better or worse, so the Skico is projecting that its skier visits will be down anywhere from 5 to 15 percent by the end of the season. International business, one of the Skicos strongest markets, will be flat at best, Perry said.Advance reservations for January, February and March are slightly behind the pace set last year, Perry said, but those months are look substantially better than December. This is going to be a very tough year, no question about it, he said. Basically from mid-September until the last couple of weeks, reservations activity for winter vacations dried up. It’s like everyone collectively hit the pause button.There is time to fill the gaps in reservations, Tomcich said, but the window is closing. Typically about one-half of the reservations for the entire ski season are made before Thanksgiving.

While the lodging industry and Skico can count on occupancy reports to gauge their winter activity, its more of a crapshoot for retailers and restaurateurs. Its difficult to predict how much Aspen guests will spend.Margaret C. Campbell, associate professor of marketing at Colorado Universitys Leeds School of Business, said the mood of travelers will be different this year as well as the psychology affecting their spending. The idea of coming to Aspen to blow a wad of money in isolated splendor isnt attractive to most people right now, Campbell said. The idea of cutting back the materialism and spending time with friends or family known as cocooning becomes more attractive in times of trouble, she said.Matthew Zubrod, chef and owner at Dish Aspen, said restaurant owners face a strategic dilemma right now: Do they stick to their pricing, or do they offer a greater mix of prices to attract business?There also is staffing uncertainty. Several restaurant operators are hiring part-time help with the option of making them full-time as the season unfolds and activity picks up. Zubrod said it is easier to find qualified help this winter. More experienced waiters are seeking jobs than at this time last season.The biggest dilemma is gauging the number of diners. Zubrod is taking a conservative approach. Were overall forecasting for a 10 percent drop in business and hoping for the best, he said.Jeffrey Gorsuch, a partner in the family-owned Gorsuch ski and sportswear stores, said these are exceptional times. A retailer cant really use historic data like gross sales and visitor numbers to forecast business this year because of the turmoil with the national economy and the uncertain effect on travel.People are making vast adjustments in their lives, he said. You see people prioritizing where they spend money.Gorsuch has stores in Aspen, Vail, Beaver Creek and Keystone. Traffic was down by varying degrees at all of them in recent months. Aspens been the most hard hit in terms of sales, he said.But adjustments by retailers at this point are next to impossible. Orders for skis and clothing were placed last winter when the industry was going gangbusters. So Gorsuch, like many stores, is full of inventory and fully staffed. Gorsuch, like the Aspen Skiing Co., is stressing to employees that now is the time to pamper every guest.

The competition among resorts for business will probably be greater than ever this season. Skicos Perry and members of Aspen lodging industry said they will offer deals on packages of lodging and lift tickets, but they wont resort to a fire sale.Lodges are careful of rate integrity. They dont want to offer such drastic discounts that it sends their average room rate and profitability tumbling. They also want to avoid alienating guests. If one couple learns from another couple during talk around the hot tub that they got a deep discount by booking late, the lodge runs the risk of alienating the customers that paid more.On the other hand, the successful resorts this winter will be the ones that offer deals. Tomcich said Aspen-Snowmass customers are savvy. They realize that in these tough times they might be able to get better deals by holding off on reservations until closer to when they want to travel. Lower fuel costs and less demand has already driven down air fares. Now prospective guests are shopping for lodging bargains.Snowmass Village lodging properties have teamed with the Skico and Stay Aspen-Snowmass to offer Recession Recovery Packages. The Skico has e-mailed past customers with special offers for the season.Garrison of the Mountain Travel Research Program said Aspen and Snowmass are better off than most destination resorts because of strong repeat business. Nevertheless, this winter will test how loyal those customers are to Aspen and how loyal Aspen is to them.Since people are going to be reluctant to spend during a recession, Aspen-Snowmass needs to find a way to entice them to get the hell out of the city and recharge, he said. Aspen needs to offer itself as a safe haven, as a place to get away and re-create. I would recommend rolling up your sleeves and engaging.scondon@aspentimes.com

Wyatt Haupt Jr.Aspen Times WeeklyASPEN Looking for a job this season at one of the local ski and snowboard shops in town? You might be out of luck.Thats because most of those shops seem to have set their employee rosters well ahead of time, and with some familiar faces. Usually we are hiring for the clothing side, said Melisa Sweet of Pomeroy Sports on East Durant Avenue. But we are pretty much set right now.She said the store is lucky; last year, they were still hiring in the weeks leading up to Christmas.We had a lot of girls coming back this time. Its a lot easier than training new people, said Sweet on the benefit of having experienced sales personnel in tow for the usually busy ski season.The situation was similar on the other side of the store, where the ski staff has been in place for a while. All told, Pomeroy Sports has about 25 people on its staff this season, with 10 on the clothing side and the rest on the ski end.We are fully staffed, said Erik Wachtmeister, who is working his 10th season at the store.And, much like the clothing side of the business, the ski shop staffers are loaded with experience. In fact, only one new person was hired on the ski side, largely a result of a job that requires a full complement of skills.Theyve got to do everything, Wachtmeister said.The winter payroll is also set at other shops, including Polar Revolution on South Hunter Street. The retailer, which caters to the snowboarding crowd, has doubled its employee count for the season, said owner Sammy Shea.He said hiring additional help this season was really no different than previous years, despite an economic malaise that could lead to less visitors coming to town at least early on.The economy played no role in my decision making, said Shea on the possibility of fewer people hitting the mountain. I have a business model in place and it works.What would also work is lots of snow.Ricky Reh, general manager of Four-Mountain Sports on East Durant Avenue, said that a successful World Cup event with lots of televised shots of snow-covered mountains would be outstanding for the town.That would, most likely, lead to more business for the ski and snowboarding shops. It would also give those stores that are not fully staffed for the ski season, such as Four- Mountain Sports, the assurance to go out and fill those remaining spots.It might also afford job hunters, like Matt De Stefano of Aspen, a shot at landing another gig in town should he not latch on with the Snowmass Ski Patrol. De Stefanos seasonal job as a mechanic at Ajax Bike & Sports on East Hyman Avenue is ending. And while the competition for a ski patrol job is tough, De Stefano seemed confident he could find other work should that not pan out.I think Aspen is pretty much recession-proof, he said. If you have $50 million and lose half of it, youve still got $25 million and you can come to Aspen to ski.whaupt@aspentimes.com


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