Heading to the slopes for some skiing? Don't forget your bathing suit.
The multi-billion-dollar ski industry is on the rebound, and it is charging forward with a slew of new snow-less, slope-less offerings in an effort to boost year-round profits and attract even the most unlikely customers: non-skiers.
While numbers for the industry as a whole are trending upward, ski resorts have not escaped completely unscathed from the recession. Some have been forced to contract, some post consistent losses, file for bankruptcy or even launch initial public offerings in an effort to raise money and pay off debt.
Amid the financial woes and consumers’ lingering hesitancy to spend big on expensive leisure activities, resorts are now looking at creative and innovative ways to attract not only traditional skiers and boarders, but also those who typically shy away from the frigid weather and high-speed descents.
Ski resorts across the country are trending toward luxury hotels, village shopping, classy dining, and non-skiing activities both on and off the mountain.
Consumers have become more selective than ever in their discretionary spending, according to Ken Schapiro, president of Condor Capital and manager of more than $600 million in portfolio assets. While many consumers have cut back on large purchases, luxury items have been surprisingly resilient, prompting resorts to “compete with each other on grounds other than the mountain itself,” he said in a note.
Vail Resorts (NYSE:MTN), for example, opened two such hotels last year, The Ritz-Carlton and the Marriott, and restructured its Lionshead Village at its flagship mountain in Colorado to include restaurants, shops and multi-million-dollar condos.
On the West Coast, meanwhile, Kirkwood Mountain Resort in Lake Tahoe has been trying to think outside the box, having rolled out many new initiatives over the last two years intended to provide more activities for vacationers and those who may not enjoy back-to-back days of skiing, according to the resort's chief executive, David Likins.
Kirkwood recently introduced a first-of-its-kind wintertime tree-to-tree canopy tour, an eight-zip system with suspension bridges that whisks passengers 90-feet above ski trails. The resort also offers snow cat tours, bringing visitors to the top of the mountain during sunset for dinner and drinks.
The California resort has seen 100% turnaround on its avalanche and snow education and rescue courses, which it launched two years ago, according to Likins, as well as climbing demand for its newly rolled out kid’s snowmobiles. Mountain tubing and snowshoe rentals have also been on the rise, he said.
“We are seeing folks that don’t intend to ski at the resort but are coming in for these programs,” he said. “We’re making it a well-rounded wintertime vacation, giving them more to do then just ski.”
The alternate services have helped boost the company’s ancillary revenue, which has seen an 16-17% jump since last year, according to Likins.
Michael Berry, President of the National Ski Areas Association [NSAA], said resorts are launching initiatives in an effort to attract customers on a year-long basis. Stowe Mountain in Vermont, for example, recently opened its Spruce Peak Performing Arts Center, and other resorts are upgrading summer facilities.
Resorts in the Northeast have rolled out initiatives to better appeal to entire families, expanding kids clubs and activities both on and off the mountain. Bolton Valley has a sports center in its base village that houses an indoor pool and amusement center with video games and moon bounces.
New Jersey’s Mountain Creek, meanwhile, which was sold by Intrawest to a nearby resort and group of investors in May, has pondered a slew of new initiatives intended to attract customers, including new hotels, luxury retail stores as well as a revamped mountain base that could potentially house a craft village and indoor water park, according to The Star-Ledger, which cites one of its developers. The resort already operates an outdoor water park during the summer.
Not all new initiatives, of course, have stemmed from the recession.
Despite inevitable slumps in 2008 and 2009, the industry has actually been trending upward over the last decade, according to NSAA data released in July.
“It’s a good positive upbeat story here,” Berry said. “We saw a little downturn two seasons ago, but the general consensus is the industry is doing very, very well.”
The ski industry recorded its second best season by total visitations last year, reaching 59.8 million, which is just 1.2% below its record high visits of 65 million in the season started in 2007, and a dramatic increase from 55.6 million at the heart of the recession.
Berry said that the current ski season in on track for “another very good year,” noting it will either exceed or match last year’s results, helped by resorts’ continued effort to diversify and upgrade facilities.
The industry may be associated with slower growth patterns, but Berry said it has never had more enthusiasm, and has never been in better shape than it is today.