By Karen D. Lorentz
Approximately 73 percent of the nation’s major winter resorts are open this summer, according to information provided to the National Ski Area’s Association (NSAA) in the Kottke National End of Season Survey for 2013/14.
In the Northeast, 61 percent of the respondents offer lift rides, 45 percent offer zipline/canopy tours, and 40 percent offer mountain biking as the top three activities. (See detailed Kottke Survey Chart for specifics by activity at mountaintimes.info.)
They are part of a new “summer” trend, offering a variety of activities that have expanded beyond traditional chairlift rides and hiking to mountain biking, ziplines, and ropes courses. Many of the areas are relatively new to expanded summer offerings, especially those on federal land where federal legislation in 2011 made more activities possible.
Killington summers, past and present
Killington was one of the nation’s first ski areas to be interested in offering summer activities, starting with chairlift rides and hiking in 1960.
At its inception, the goal was to offer four-season activity and to retain experienced workers by offering year-round employment.
Summer camps, horseback riding, tennis courts, boating and fishing on Snowshed Pond, summer theater (Green Mountain Guild productions), gondola rides, tennis school program, golf course and golf school, hiking programs, water slides, mountain biking, and disc golf were all among the attractions added over the years.
The area also hosted special events like occasional big-name concerts and horse shows as well as the ongoing Killington Music Festival.
However, over the years, Green Mountain Guild disbanded, the tennis complex was torn down to make way for the Grand Hotel, and the water slides were removed.
Today, Killington Resort offers disc golf; newly expanded mountain biking; kayaking, stand-up paddle boarding and fishing on Snowshed Pond; golf course and instruction programs; hiking; and gondola rides.
It also hosts special events like the Wine Festival, Jeep jamboree, free Cooler in the Mountains weekly concerts, and cross-training camps for athletes ages 9 through 15 among many other events.
With mountain biking a popular summer anchor — Killington’s terrain is considered tops in the East among serious bikers — the program has been expanded to include more beginner/learner terrain and a larger fleet of mountain and cross-country bikes this year.
Already, Killington Resort has seen an “80 percent increase in mountain biking to date,” noted spokesman Michael Joseph, attributing the increase to the expanded fleet and new lift-served learner terrain at Snowshed.
Killington officials recently shared a five-year plan to join the national trend of increasing summer visitation at winter resorts. The goal is to attract 45,000+ visitors in the summer by 2019.
Plans include a Soaring Eagle two-seater zipline to be operational by this September and an Alpine Mountain Coaster, BigZip, Arial Park, downhill race trail, and relocation of mountain biking facilities to a Snowshed headquarters in 2015 (a $3 million investment.)
From 2016 through 2018 an indoor arena for music events and summer camps, Beast of East three-stage ziplines from Killington Peak to Snowdon, and more major enhancements to mountain biking per the Gravity Logic 5-year planned development.
The Mountain Times asked Rob Megnin, director of sales and marketing for Killington and Pico, why the resort is going in this direction when the return on investment is less certain in summer than in winter.
He cited several reasons, including: driving a revenue stream to balance cash flow; employing people year round; and providing more incentives for real estate sales.
In noting the potential to add to resort revenues, which currently run about 90 percent from winter and 10 percent from summer, Megnin said a 10-percent increase on the summer side is doable. Based on the taxes collected through rooms, meals, and alcohol sales, which the state takes in (see chart), Megnin said there is definitely potential to do more in Killington.
“The numbers for Stowe are significantly greater than for us and show the opportunity we have here… There is a significant upside,” he added, explaining that the greater Killington area offers “a particular lifestyle and the key [to realizing the potential] is to find a unique balance of more activities that will draw people to the area in summer.”
Finding the right mix
Acknowledging Stowe’s village appeal to tourists with its many shops to explore, the walking/biking path that departs from the village, and the Stowe Mountain Resort, Megnin said, “Killington has different attributes and assets but if the right combination of activities is found, it certainly can grow its visitation just as Stowe has.
“We are looking at every option to find the right mix of activities that would create the critical mass needed to make summer successful for us and the town,” he said.
Asked if a water park, which has proven hugely successful at Jay Peak, were among those considerations, he said, yes! adding that a consultant had already come in to advise on such a possibility.
In addressing what he meant by a “particular lifestyle” being found in Killington, Megnin noted the emphasis on “active lifestyles and health” for all ages, which is currently becoming a national trend. (Exercise and being active are touted as “medicine” by doctors and fitness experts alike, and Fortune Magazine’s Aug. 11 issue featured an article called “Wellness is the New Green.”)
“There is an active combination of events that the town puts on and events that we put on. Together, it’s a bundle of cool youth-oriented activities,” Megnin said, citing the Spartan Race as a “shining example of town support and resort hosting efforts.” Alluding to participants who put “a premium on being in good physical shape,” he said that this fits with the national active lifestyle and health trend.
Noting that summer plays a role in getting into shape for winter, he said an active lifestyle is important to participation in winter sports and in family life.
Using an example from his own life, he said, “In choosing my career path, one of the things I decided to do was to take care of my body,” adding that he runs, hikes, and bikes in the off-season to stay in shape for winter. It’s a commitment the entire family has made so they enjoy those activities together as well as skiing in winter, he continued.
Megnin sees a convergence of the active outdoor activities appealing to more people, which will lead to an increase in summer visitation and year-round employment opportunities as well as better real estate investments. Being a destination-caliber resort means having more to offer second-homeowners, Megnin added.
However, one of the challenges the area faces in choosing activities is that the mountain must work within the framework of the proposed Killington Village. Because it involves rerouting the Killington Access Road as well as changes to the Snowshed and Ramshead areas, any new attractions must be placed so as not to interfere with Village plans.
Another challenge is to fund the construction of any new attractions.
This is where many resorts have gotten creative in times of tough bank lending over the past seven years. Some areas have turned to EB-5 funding (an foreign investment program that gets an investor of $500,000 a Green Card for his family if 10 American jobs are created) as Jay Peak Resort has done. Others have sold to the CNL (Commercial Net Lease) family of resorts and lease back their areas from CNL, which is a REIT (real estate investment trust). Still others have developed partnerships regarding various attractions they have installed.
Megnin noted that EB-5 investments are really loans that must be paid back at some point and that there are some questions about the program continuing as standards are changing. Furthermore, it involves an expensive application process that also takes time (to be designated an EB-5 program). With a more conservative approach to finance, it’s a situation that Killington prefers to avoid, he noted.
Other areas have financed attractions by going into partnerships and this presents “a more realistic mechanism,” Megnin said. Some areas have attractions that operate as concessions. Others fund part of an attraction with the installing company funding part by taking receipts from ensuing ticket sales.
The partnering route would mean raising capital that could be leveraged to add new attractions like the new Soaring Eagle zipline, mountain coaster, and Beast ziplines, which can operate year-round. Megnin added that if the 1 percent options tax is repealed on Killington lift ticket revenues and retail sales, that capital could be used as seed money to “access the further assets we need to grow summer.”
While Killington’s corporate parent Powdr Corp has been supportive of winter business at Killington through the investment of some $35 million for improvements over the past seven years (with an additional $3 million slated for 2014-15 upgrades), Megnin said Killington needs to continue to use its capital resources for its winter business. That makes the partnering approach and revenues realized from the repeal of the 1 percent options tax a good avenue that leverages existing assets to benefit resort, town, and businesses.
Future can be bright
Megnin has been enthusiastic about the potential of summer since joining Killington in 2010. He noted that the town has also been desirous of capitalizing on the opportunity that summer presents and praised collaborative efforts between the resort and town groups.
“Since summer 2011, the Economic Development and Tourism Commission has focused on providing more summer events like the hay festival and have worked collaboratively with Killington’s Wine Festival and the summer concerts. It’s a cooperative effort,” Megnin said, noting the resort and town, including its Chamber of Commerce, continue to work together to further expand events.
With a five-year plan in the works on Killington’s part, Megnin is hopeful that residents will realize the potential it brings not only to Killington Resort but also to local businesses, which will benefit from increased visitation.
Reiterating the potential that can be seen in the state’s Gross Receipts chart for rooms, meals and alcohol taxes for June, July, and August, Megnin is optimistic that resort and town can capitalize on summer’s potential.