Will Skico fly high or face-plant this winter?
November 16, 2007
The Aspen Skiing Co. is taking a cautious approach to the ski season by forecasting a “modest” increase in lift ticket sales, according to Senior Vice President David Perry.
The Skico brass has budgeted a 1.5 percent increase in ticket sales above last season. The company could exceed that goal at its four ski areas if there is good snow ” and without the vicious, airport-closing snowstorms that punctuated Colorado’s winter last year, Perry said.
Rough weather in the mountains and in Denver, as well as an unusual technical problem that affected new commercial aircraft, canceled 335 flights in the Aspen-Pitkin County Airport. That affected about 15,000 travelers ” many of them during major holidays. The Skico estimates the bad weather wiped out 30,000 potential skier and snowboarder “visits,” or ticket purchases for a full or half-day.
Even so, the Skico managed to match the prior year’s performance. It logged 1,444,647 visits, just 156 fewer than the winter before.
The company had budgeted a 2.5 percent increase for last season, which it would have come close to achieving if not for the air travel woes. Staying on par with the winter before, 2005-06, wasn’t all bad. In 2005-06, the Skico logged its fourth consecutive year of increased business.
Preseason business indicators appear strong for this season. “We’re quite optimistic,” said Perry, basing his observations on advance lift sales and group bookings.
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The Christmas and New Year’s holiday period is strong as always, and January is shaping up to be solid, according to Perry. His only concern is a short stretch from mid-February through the first week of March. It is “soft” or down from last season, he said.
Fortunately, the Skico and its marketing partners have plenty of time to react. They will push that period with special promotions and discounts to try to fill beds.
Perry said the six-or-so weeks between Presidents Day weekend and the end of spring break really make or break the season for Skico. Spring break typically concludes around the end of March.
Over the last decade, the length of prime season has been compressed, he said. It used to stretch through all of February and March.
International business is also shaping up as a Skico strong suit. International travelers accounted last winter for 18 percent of the company’s destination customers ” those who include overnight stays in their trips. That was up from 15 percent the prior season.
It’s poised to grow again. The U.S. dollar is weak compared to the currencies of most of the Skico’s top international markets, including Australia, United Kingdom, Germany and even Canada. Traveling to the U.S. has rarely been as affordable for foreign visitors. Conversely, traveling overseas is getting more expensive for U.S. skiers, which may convince them to ski at home.
The credit crisis that is rippling through the U.S. economy hasn’t soured Aspen-Snowmass customers on ski trips, Perry said. There is no sign that spending on ski trips has been reduced.
The Skico is also convinced that the air travel issues that plagued the resort last winter are behind it. That is critical because Aspen and Snowmass are destination resorts, relying on customers traveling from outside the Roaring Form Valley for overnight trips. About 39 percent of Aspen-Snowmass customers flies into the Aspen-Pitkin County Airport while 11 percent uses the Eagle airport. Another 36 percent flies into Denver and takes ground transportation to the Roaring Fork Valley.
Some of last season’s problems were freak occurrences. Snowstorms paralyzed Denver International Airport at Christmastime, and bad weather also affected flights at other peaks of the season.
In addition, the CRJ 700 aircraft that SkyWest operated was often grounded early in the winter because the barometric pressure was lower than the level at which the equipment was certified to fly. SkyWest and the manufacturer worked with the Federal Aviation Administration to fix the regulatory issue by February.
Some problems are more controllable. Last winter was the first that SkyWest Airlines operated at the local airport. It handles the majority of United Express flights. SkyWest officials acknowledge they underestimated the challenges of hiring and retaining enough employees at Aspen. They are beefing up their staff this year. The air carrier secured affordable housing that it can offer to about 24 workers this winter.
There is also an increase in service. At this point, there is a 12 percent increase in the number of available seats into Aspen, Perry said.
Of course, the wild card for this and every other season is the weather. Warm temperatures and dry skies have had many locals shaking their heads and wondering how the slopes will open on time. The wacky weather dominated conversations throughout the valley during the week before Thanksgiving.
Aspen and Snowmass are scheduled to open on Thanksgiving Day, Nov. 22; Aspen Highlands and Buttermilk open Dec. 8.
“All it takes is one storm,” noted a longtime veteran of the Aspen business community. He wasn’t ready to panic.
Mother Nature is teasing skiers and riders this fall. A dump in late September spurred the Skico’s public-relations department to send images to the media of all the snow gracing the mountains. Since then, it’s been as dry as a Bible Belt county during Prohibition.
“As every day ticks by, we get a little more nervous,” Perry acknowledged less than two weeks before Thanksgiving.
Skico officials said Nov. 13 that natural snow and cold temperatures to allow snowmaking would be needed to open the slopes on time.
Ski areas benefit from early snow, not just on their slopes but across the country. Early snow around the country, in travelers’ hometowns, gets them interested in vacations; early snow at the ski areas reassures them.
Sure, it’s largely a head game. Good early season snow doesn’t equate to quality conditions in February or March. Ski season will take more twists and turns than a John Grisham thriller. But perception is everything.
“Getting early season momentum is important,” Perry said.
Nationally, poor snow conditions in some parts of the country dragged down ski industry business overall last season. There were 55.07 million skier visits during 2006-07, down about 6.5 percent from the prior winter. Business tumbled in the Pacific West, Southeast, Midwest and Northeast. The Rocky Mountain region managed a slight increase, according to the National Ski Areas Association, a trade association based in Lakewood, Colo.
Colorado ski areas eked out a record in 2006-07. The total visits at 26 ski areas were 12.57 million, an increase of 0.26 percent over the prior season.
Scott Condon’s e-mail address is email@example.com.