New England's $1 Bln Ski Industry Squeezed by Fuel, Warm Winter2006

New England's $1 Bln Ski Industry Squeezed by Fuel, Warm Winter

2006-03-23 00:05 (New York)

By Danielle Kost March 23 (Bloomberg) -- On a February Friday, CannonMountain braced for the three-day President's Day weekend,usually one of the busiest for New England ski resorts. Theweather had other plans. Rain and sleet pelted skiers' faces as they navigated hardsnow, ice and, in some spots, grass at the Franconia, NewHampshire, resort. By 3:30 p.m., there were no skiers left andthe mountain closed early. Warm weather and high fuel costs are squeezing the region's$1 billion ski industry, already a distant second in the U.S. toskiing in such Western states as Colorado and Utah. Visitors arestaying away as resorts struggle to keep snow on the slopes.Maine Governor John Baldacci last week announced plans forreduced-interest-rate loans to businesses that have been hurt. ``Energy costs combined with lower visitation made it atougher season for many,'' says Nolan Rosall, president of RRCAssociates, a Boulder, Colorado, consulting firm. Resorts willprobably report attendance figures at least 10 percent below lastyear, he says. About 13.7 million skiers visited resorts in the Northeast,including New England and New York, last year, according to theNational Ski Areas Association, an industry trade group. That was30 percent fewer than the 19.6 million who favored the RockyMountain slopes, where the season can be five days to two weekslonger than in the Northeast. Resorts in the Rockies also boast the largest amount ofskiable space in the U.S. and the most snow, helping them attractmore overnight visitors, according to the trade group.Inexpensive airline flights have made the slopes accessible toskiers from all over.
Colorado Record
Ski resorts in Colorado may attract the most visitors everthis season, according to Colorado Ski Country USA, a trade groupin Denver. The state is aiming to draw more than 12 millionskiers and snowboarders this year. From Oct. 15 to Feb. 28, 8.29million hit the Colorado slopes. Weather makes attendance more volatile in the Northeast thanin the western states, says Rosall, 60. He expects the RockyMountain region's $2.8 billion ski industry to report an increasein visits, though he declined to be more specific with more thana month left in the season at some resorts. Heading west was the only solution, says mortgage broker RobVeneziano. The 37-year-old snowboarder from Marlborough,Massachusetts, says he visited New England resorts three times,compared with about nine visits last year. ``If I brave the New England lines and prices, I want thesnow to be fresh as possible and not manmade,'' he says.
Higher Than Normal
With temperatures about 20 percent higher than normal,snowfall in parts of New Hampshire, Vermont and Maine was down asmuch as 31 percent from December through February, according tothe Northeast Regional Climate Center at Cornell University inIthaca, New York. There was as much as 39 percent more rain. American Skiing Co., the Park City, Utah, company that runssix resorts in New England, said in a statement last week thatskier visits were down 3 percent from October through the end ofJanuary. Its sites include Sunday River in Newry, Maine; Attitashin Bartlett, New Hampshire; and Killington Resort, theNortheast's biggest ski resort, in Killington, Vermont. Mad River Glen, a Fayston, Vermont, resort owned by a 1,800-person cooperative, expects visits to fall 20 percent this year,the mountain's worst showing in 10 years, says Jamey Wimble, 41,the cooperative's president. Sites, including Pats Peak Ski Area in Henniker, NewHampshire, and Okemo Mountain Resort in Ludlow, Vermont, predictvisits to be unchanged from last year. Stowe Mountain Resort inVermont, owned by American International Group Inc., the world'slargest insurer, is also mirroring last year's attendance.
`Up and Down'
``The ski season was up and down,'' says Lori Cayouette, 31,director of marketing at Pats Peak. The closely held resort hasreceived about 5 feet of natural snow so far this season, half oflast year's 10 feet, Cayouette says. Ski areas have been forced to make more snow using machines,an energy- and water-intensive process, and to groom trails morevigorously. The Vermont Ski Areas Association estimates thestate's resorts spend about $20 million on energy a year, thesecond-largest operating expense behind employee compensation. ``There's no question that higher fuel costs have an impacton mountain operations,'' says Parker Riehle, 39, president ofthe association. That expense will likely rise this year, boosted by the needfor snow and heating oil and gas prices that are up more than 14percent. Mad River Glen will end the season with a deficit, inpart, because of higher than expected fuel costs, Wimble says.
Upgrading Amenities
Ski resorts have been trying to counter weather-relatedvisitor fluctuations by selling more tickets for the seasonbefore it starts, usually at lower prices, Rosall says. They'realso adding and upgrading amenities such as lodging by addingluxury condominiums and hotels. Okemo, which typically has about 600,000 visitors a season,has pumped 450 million gallons of water to generate snow so farthis year, about 100 million more than previous years, saysspokeswoman Bonnie MacPherson, 46. The resort is still producingsnow to try to lure visitors. Many resorts are counting on this month for a last boost tothe season. Although summer is New England's most profitabletourism season, winter is close behind, says Geoff Baekey, 44,manager at PricewaterhouseCoopers LLP's Boston office. ``It was very slushy,'' Betsy Halbert, 48, of Marblehead,Massachusetts, says of a trip this month to Wachusett MountainSki Area in Princeton, Massachusetts. With temperature above 50degrees Fahrenheit (10 degrees Celsius), Halbert says she skiedwithout a jacket. ``At the bottom of the mountain, we had to go through somepuddles,'' she says.
--Editor: Porter (cfw/scc).