On July 10, 2014

Vermont ski industry alive and well

By Karen D. Lorentz posted Jul 3, 2013

Skier visits near all-time record

Vermont just recorded one of its best ski seasons ever, despite a later than usual start for most areas.

In fact, it may have been the best season ever if one examines the numbers and accounts for the actual methodology used to arrive at the reported skier visits and number of ski areas in operation today.

In that respect, what was reported, as a very good season may actually have been a great season! Great as in the high number bodes well not only for the ski areas but also for the economy. It also reinforces the $55 million in mountain improvements and upgrades happening statewide this year, $11 million of which are taking place at Killington and Pico Resorts.

The 1987 record
In 1987 Vermont reported 5.2 million skier visits for a record season, a result of a fortuitous convergence of factors – conducive temperatures, abundant snowfall, ski area upgrades, and new vacation homes – all of which created a what many considered a “near perfect winter.”

From 1987 to 2010, however, Vermont averaged just 4.01 million annual visits (4.23 from 2000 to 2010.) Over that same time, a total of $300 million was poured into mountain improvements (with hundreds of millions more spent on villages), have enabled the state to compete successfully with destination resorts in other states and maintain Vermont’s overall ranking of third in the nation in skier visits. (Colorado takes the top rank followed by California.)

Interestingly, the state has not come close to the 5.2 million benchmark, even in good snow seasons; an indication the record should be revisited and perhaps adjusted or qualified so more appropriate conclusions can be drawn.

In an 1992 interview, George Donovan, an analyst in the Planning Division of the Agency of Development and Community Affairs, noted that the methodology prior to 1992 was to estimate visits for non-reporting areas and add them to reporting areas to reach the season’s “estimated total skier days” statewide. The 1992 methodology change to “total only reporting areas” made subsequent season comparisons “apples to oranges.”

Counting “apples to oranges”
Today, the annual numbers for the state are based on reports from the ski areas to the Vermont Ski Areas Association (VSAA), the trade association of resorts, which then tallies them. (While some areas divulge their skier visits to the public via press releases – or used to – others do not. Many release their percentages of year over year, whether down or up.) VSAA maintains confidentiality of each area in presenting the state’s final tally.

Acknowledging that the two methodologies are “apples to oranges,” VSAA President Parker Riehle noted that the skier visits measure still provides a useful tool to keep track of ski industry health and is “the most acceptable way to gauge to health and success.” The National Ski Areas Association (NSAA) also uses the measure (one visit as one day) to tally the nation’s annual skier days.

Riehle agreed that the benchmark 1987 season makes today’s ski seasons look less successful than they actually are.

That is why, in part, VSAA releases ten-year averages when reporting annual visits. When he does have reason to mention 1987, Riehle said it is difficult to explain the discrepancy – which in most (later) seasons ran to one million or more visits off that record! However, he suggests the pre-1992 accuracy level (compared to today’s better accuracy and different methodology) probably contributes to that discrepancy.

Another contributing factor – besides the weather, economy, and horrific events like the 9/11 terrorist attacks – is that today, many areas use scanners which industry sources note can be more accurate rather than rely on averages, which historically have skewed high.

The 2012-13-season success
On June 4, VSAA released the news of Vermont having finished the best season since 2001 with 4,513,041 skier and rider visits.

“This year marks the second-best season since VSAA began collecting resort data in 1992 [2000-2001
saw 4,579,719 visits].

Nationally, visits had the biggest one-year leap in 30 years, with the Northeast posting the biggest gains in the country. The season tally once again ranks Vermont number one in the East and third nationwide,” noted Sarah Neith, public affairs director at VSAA.

“Our 4.5-million skier visits represents a 16% increase over the prior year and a 9.8% increase over our latest 10-year average of 4.1 million. This year brought our 10-year average up slightly, from 4.15 to 4.16.

“This season every resort without exception was up double digits – the statewide range was 10 to 30% up over the prior year,” Riehle stated.

Mike Solimano, president and GM of Killington-Pico, said, “Not only did the 2012-13 season provide more snow and skiing from October 13 until May 26, but we were also fortunate enough to increase our skier visits by 22% year over year!” Killington-Pico, the state’s most visited area.

One of the state’s fastest growing, Jay Peak Resort, also did very well. Spokesman JJ Toland said, “The 2012-13 winter was a record by every metric: skier visits, overnight visits, revenue … by whatever scale you want to use, the resort had the best year in its history.” Jay also has benefited from ongoing efforts (since 2005) to build a year-round resort – a goal that saw fruition with Toland reporting, “Our summer business levels now equal winter visitation rates. Between May 31 and September 30, 2012, we had approximately a quarter of a million visitors to Jay Peak. He credited all the village upgrades with hotels and waterpark, etcetera, as contributing to Jay reaching its 2013 record.

Top in the east; third in the nation
Asked how Vermont did in respect to Utah, which has been nipping at the state’s skier visits heels for some years now, Riehle acknowledged that they are a true competitor.

“Utah is a formidable force in the world of marketing state destinations for skiing and riding. They do have a loyal following with their impressive variety of mountains and the allure of western snow, but they really did not have a great winter for snowfall and, of course, they have little or no snowmaking to bounce back from that. Obviously, the year prior was tough for everyone, so they are now coming off of two seasons in a row where people have traveled to Utah at great expense and hassle and have come home disappointed.

“That experience may catch up with them because it’s all about the experience people have on the mountain. In Vermont’s case, we now have 80% statewide snowmaking coverage and state-of-the-art grooming equipment and techniques that virtually ensure a top-quality snow guarantee for all of our visitors. Add to that our drive time proximity of about four hours for 45 million people who are fed up with airline travel, and you’ve got the winning formula for Vermont remaining number one in the East and third in the nation.

Others echo the advantages of the drive market and the hardships of flying. Phil Dodd, editor and publisher of the Vermont Property Owners Report, observed that “airline prices have risen a lot and I hear more complaints about the hassles of flying.”

’87’s 5.2 million visits, myth or fact?
One reason to question Vermont’s 1987 benchmark is that New Hampshire visits have similar ups and downs to Vermont’s, yet, they have surpassed their 1987 record of 2.177 million visits nine times, setting a new record 2,366,706 visits in 2007-08. For 2013, NH alpine ski areas recorded a total of 2,276,370 visits, a 20.9% increase from 2012 and a 4.7% increase over the ten-year average, which is their fifth best overall downhill season.

Ski New Hampshire Marketing Director Karl Stone said, “I think we’ve done consistently well due to continued investment in our ski areas.”

Vermont and New Hampshire share in their accessibility to a large market, with the exception of the highway system, which leaves Vermont areas with less direct access since many areas are located along Route 100 – a scenic two-lane known as “the skiers’ highway” but hardly a modern interstate like I-89 or I-93, which more directly benefit New Hampshire areas.

The discrepancy between the states’ performances is most likely due to Vermont’s pre-1992 methodology. Because those visits were estimated, they were probably inflated. In fact, research into actual record years for Vermont areas indicates this is the case.
In addition, there were more areas operating in Vermont (41 in 1987 vs. 21 in 2010 and just 18 in 2013.) Although 20+ closed, they would account for only about 250,000 collective visits, as most were local community hills with surface lifts and rope tows that operated for shorter seasons than today’s state average of 132 days per area.

While areas like Killington, Mount Snow, and Sugarbush may have had their all-time record seasons during 1987 or 1988, their decreases were offset by areas like Stratton, Okemo, Stowe, and Jay, which subsequently posted new records. Okemo, for example, grew to twice its ’87 visits, doing 300,000 in 1987 but 637,000 in 2008 and 603,000 in 2010.

Other factors include the loss of five chairlift areas including Maple Valley, which closed in 1998, Magic, which closed 1992 through 1997 seasons, Bolton Valley closed 1997-1998, and Ascutney 1992-93 – before they reopened under new owners in 1994 then closed again in 2010. The former Round Top, closed in 1982, reopened as Bear Creek and operated from 2000 to 2010 when it also again closed again.

Methodology matters
Chris Nyberg, former president and GM of Killington/Pico Ski Partners, LLC and a 35-year veteran of the ski industry and now CEO of Powdr’s Resort Division, noted that the methodology used has changed and is more reliable today.

“Back in the day, most resorts would count the cars in the lots and do some math to get the number of people at the resort. Out West we used 2.5 as the multiplier to determine visitors,” he said.

“When I came East, I found that there are various methods used…VSAA uses a figure of 25 as the multiplier when dealing with season passes. That may be high though.

“When I came to Killington [2007] the averaged number of yearly visits by pass holders was 17 – knowledge that comes from actual scanning. When we raised the season-pass price, the number went up to 22 visits per year. This increase comes from an increased need to obtain value.”

Candice White, vice president marketing and communications at Sugarbush, also acknowledges that scanning is a more accurate way to measure visits. “In the 1980s and 1990s, skier visits were estimated. For example, every season pass was measured as 22 skier visits. Today, we measure every skier visit by scanners so we are able to see the actual visits – around 300,000 skier visits annually – instead of making a guesstimate,” she said.

Buttressing the value of scanning, one Colorado resort reported a decrease of about 500,000 visits when it went to scanning tickets and passes!

One theory that explains Vermont’s high cluster of visits’ from 1986 to 1992, is that a big percentage increase in 1987 visits (using data like Okemo’s 34 percent gain) was applied to non-reporting areas and inflated the state’s total. Research shows that one area’s gains can be offset by another’s loss.

Dave Wilcox and Leo Denis, former longtime vice presidents at Killington, noted that their huge ski school business and midweek visits declined during the 1990s with Killington off its 1987 and 1988 one-million+ visits records as a result. The 1990s also saw societal changes – decreasing leisure time, two-worker families, school kids increased extracurricular activities consuming more family time, and the rise of video games among them – that may have contributed to the decline, they noted.

Wilcox added that New Hampshire areas benefited from an easier permit process that allowed villages like those at Loon and Waterville Valley to move ahead while Vermont areas experienced delays due to Act 250.

A more accurate comparison
If one tallies the record-visit numbers for each area – that is their known best-ever numbers – of the areas that still operate today, the sum is around 4.6 million visits, a number that reflects more reliable accounting methods.

In 1987, it is plausible the state could have seen 4.8 million visits given the additional areas operating but it is doubtful that it ever did 5.2 million.

An adjusted basis for comparisons, as is done for inflation, considering the number of reporting areas operating today as compared to their 1987 visits would also be useful and better indicate the real success of Vermont’s ski industry.

Parker Riehle is inclined to agree. “I could never say for sure what the 5.2 would really look like in modern numbers, but I do think even 4.6 would be a fair extrapolation. As you saw in our press release, this is the first time VSAA has really gone public with the distinction between pre- and post-1992 data, but it was certainly the right time to do that, given how this year compares with all other post 1992 seasons,” he stated.

There are also other factors that are useful in gauging the success of today’s ski industry – yield and revenues, among them, White noted.

Although lift revenue is a major source of income, food and beverage, instruction, rentals, repair, retail and bed nights are also major and consistent revenue generators, she noted.

“Success is also measured by guests returning,” Nyberg added, opining that, “People prefer Vermont, because it has larger ski mountains and there is a winter mystique about it,” which helps it stay ahead of New York which has the most number of ski areas in the East.

Economic impacts
Riehle shared some good economic news for resorts. “Some tax increases were canceled – the legislature was looking at $18-24 million in total tax increases between the competing House and Senate versions being deliberated toward the end of the session, including a very harmful increase in the rooms and meals tax (from 9% to 9.5%), when the windfall of March revenues, including the 14% increase in the rooms and meals tax revenue, made up the budget gap and there was no longer a need to raise additional taxes.

“With the tourist revenues from rooms and meals tax and sales tax approaching $200 million for the winter season (without even counting gas tax, alcohol tax, etcetera), Vermont’s ski areas continue to play a significant role for the state’s economy,” he said.

They will also continue to contribute to the overall annual economic impacts to the state: $700 million in skier spending, $250 million in resort expenditures for goods and services, $2.5 million in average leasehold payments, as well as in 12,000 direct jobs, Riehle concluded.

Photo by Bob Perry

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