The O'Connor family of Centreville, Va., usually goes skiing in Colorado or Utah for spring break. Not this year. Even though Ed O'Connor believes his retirement account will eventually rebound from this fall's stock chaos, he's canceling their tradition this season due to the unpredictable economy and airline costs. Instead, the family of four probably will spend a weekend skiing at Wisp, a regional resort three hours away in Maryland.
"It is time to watch our cash flow," O'Connor says. "A $6,000 to $8,000 trip can wait."
The economy's current free fall is taking place at the worst time of the year for the USA's $6 billion-a-year ski resort industry, which has only a few months to make most of its money. There's mounting evidence that despite their dedication to the sport, skiers — who tend to be wealthier compared with the average American — are rethinking when, where and if they'll ski. Some will cut week-long vacations and ski close to home. Others will travel for their ski trip, but stay fewer days, go to a lesser-known mountain within driving distance or stay in town instead of renting a plush condo at the base of the mountain, says Craig Cook, owner of Travel Organizers/American Express in Englewood, Colo.
The stakes are high for an industry that operates about 480 resorts, most of which attract skiers for one- or two-day trips, as opposed to week-long trips, and caters to a narrow portion of the U.S. population. Overall, the industry counts about 12 million Americans as committed skiers or snowboarders, with about half generating 70% of the visits, according to the National Ski Areas Association.
Business at the industry's biggest resort companies — Intrawest and Vail — already suggests a shortfall compared with a year ago. Vail Resorts, which operates Vail, Beaver Creek, Breckenridge and Keystone in Colorado and Heavenly in California, told investors that advance bookings were 17% below last year's level through Sept. 25 — before the stock market fell further. Intrawest, which operates Steamboat, Winter Park and Copper Mountain in Colorado and others in the USA and Canada, last month announced layoffs due to expected declines.
The fallout is already rippling beyond resorts.
"We're in for a very tough season," says Jerry Jones, a former resort executive who now brokers ski resorts and commercial properties.
Around this time, Vail real estate agents would usually be busy chatting up wealthy skiers from Texas, the Midwest, New York and Los Angeles about multimillion-dollar ski chalets. But this year, Jones says home sales are down by about half.
"It's a dead market right now," Jones says. "The phone doesn't ring."
Even tiny ski resorts that rely less on impassioned skiers and more on Boy Scout troops, church groups and others who'll try it for a day are bracing for a bad season. When the economy changed, Johnny Goin, the director of Ski Wolf Ridge in Mars Hill, N.C., decided to limit peak-season employment to 150, vs. 200 last year.
A suddenly bad turn of events
The season didn't start out this chilly. Initially, the industry's main worries were $4-a-gallon gas for resorts that rely more on drivers, and airline capacity cuts for those that rely more on fliers. Then Wall Street imploded, decimating retirement accounts.