Economy casting chill on Colorado ski season

Colorado's major ski resorts -- many of them vacation destinations for most of the country and Europe -- are bracing for a rough season.

And it isn't because of a lack of snow, but a lack of visitors.

Bookings for Colorado's major resorts, Vail, Aspen and Telluride, are down from last

At Vail Resorts, investors were given a less-than-optimistic forecast for the upcoming season.

For 2008, Vail posted a loss of $11.1 million, despite a jump in revenue to $270.5 million attributed to its real estate division. The resorts acquired five chalets last year. Net income for 2008 was $102 million, but the company expects income of between $60 million and $76 million for this fiscal year.

"We have certainly begun to see the impact of the current economic softness during these unprecedented times," said Robert Katz, chief executive officer for Vail Resorts, which includes ski areas of Vail, Keystone, Beaver Creek and Breckenridge. "Whether these results represent guests delaying their purchases, or are signs of a visitation decline for the upcoming season, is not something we can discern yet."

While Katz admits sales are down 13 percent in terms of dollars, and 17 percent in terms of room nights, he said it's too early to gain very much insight.

"It is critical to remember that bookings to date represent only 15 to 10 percent of the ultimate total room nights for the season we historically have booked," he said.

Vail is right to be worried, said Fred Crowley, senior instructor at the University of Colorado at Colorado Springs College of Business and Administration.

"According to projected income, wages won't keep up with inflation," he said. "And that means less discretionary income. Wages might be higher, but the money won't go as far. In Colorado Springs, we're projecting wages to increase at about half the rate of inflation."

But some ski areas believe they are insulated from the effect of the weakening economy. Monarch Mountain, a resort in Chaffee County, reports that season pass sales are up compared to last year. Since Monarch does not have a hotel attached to the mountain, there are no figures for room bookings.

"We've seen a good summer," said Eric Ramsey, marketing coordinator for the mountain. "People are still coming here. I think it's because we're a drive-in market. People don't have to fly to get here. Locals will ski, no matter what the economy."

Crowley is pessimistic about the entire ski season, no matter where the resort is located -- and about the revenue those skiers bring to state and local economies. About 14 percent of the state's economy comes from tourism, and ski resorts are responsible for about three-quarters of that money, he said. A drop in ski vacations means a drop in airline travel, drop in employment at airports and ski resorts, and less money for local government coffers.

"We're going to see a loss of employment, lower sales tax revenues, lower revenues in the state and in the host communities," he said. "It's not that people won't have the time to ski either -- they'll have time, but they just won't have the money."

The downturn in the economy comes on the heels of an increase in spending for capital improvements at the resorts. Monarch launched an online reservations system (www.skimonarch.com), the ski school has been remodeled and a children's terrain park will debut this season. The total amount of capital improvements was more than $600,000, Ramsey said.

Destination resorts such as Copper Mountain, Vail Resorts, Aspen Ski Co., and Telluride have invested millions of dollars in capital improvements -- and they're offering major discounts and promotions to lure visitors.

Vail is offering unlimited ski rentals and a $579 Epic Season pass, deeply discounted from last year. The resort also is trying to keep its air travelers happy. As airlines increase baggage fees, the resort announced a "bail-out" for beleaguered passengers. Anyone booking four nights at one of the mountain resorts will receive a $50 voucher for airline baggage fees. They've also launched a new holiday promotion, offering one night free during the most popular holidays -- Thanksgiving, Christmas and New Year's -- with the purchase of four nights.

Copper Mountain, a private resort, also is unveiling major changes, including a multi-million dollar indoor training facility for people who want to become experts on terrain and tilt parks. The facility is open year-round.

Since Copper relies on both drive-in and out-of-state visitors, the resort also is working to draw repeat customers.

"Those 'Copper faithful' we're reaching out to, letting them know that promotions and discounts are available to them," said Lauren Pelletreau, spokeswoman for the resort. "Right now, we have a lift and lodging deal out in the marketplace, encouraging people to book before Oct. 12 to get the best rate. We want to encourage car pooling, so they'll have special parking, bumper stickers, fun things like that. We'll be offering some different incentives to get people here."

The promotions aren't unusual, she said, but they are targeting out-of-state visitors earlier than they normally would.

Crowley said those discounts and promotions will continue as the ski season nears -- and could continue through March or April.

"We're going to see some fire sales," he said. "There'll be advertisements on the radio, talking about getting 10 nights for the same price that six nights used to cost. I'd expect the ski resorts are a little nervous right now, and I think they'll be keeping some advertising dollars in reserve to do those promotions."

Even as Colorado's ski resorts brace for an off-year, they're getting help from the state. The Colorado Tourism Board has started an effort to encourage people in Colorado to stay in the state -- and try out some of the overnight destination resorts.

"We're continuing to market out of state," said Caitlin Sullivan, spokeswoman for the board. "But we shifted dollars to focus more on in-state tourists and regional tourists. We've added promotions to the Broncos Radio Network, for example. We're encouraging people who are vacationing close to home to try some new, different places."

Credit: Amy Gillentine