Economy and NE Ski Industry Outlook for 09/10

[Bluebird Day]

With the jobless rate at 10% and still rising and corporations driving earnings through "right sizing" because of a continuing drop in business, how will the NE ski industry do in 2009-10 season.

I'm no Ben Stein, but I think that we will see a few bankrupties at some of the smaller less capitalized resorts due to a drop in visitors. Let's face it... it's pay the mortgage or take the family skiing. And lots of folks can't even pay the mortgage.

 

[icelanticskier]

consumerism, it's been outta control for far too long and now the joes that have always been trying to keep up with the jones's and living at or above their means are in for, if they haven't already been, in for a rude awakening. ski indusrty outlook 09/10? eh, there will be plenty of skiing to be had. hopefully not too many folks will realize that they can get much better quality skiing in by touring for it and it costs nothing for a ticket.

rog

 

[rfarren]

Didn't Tony show some stats, in which North Easterners adjusted the skiing habits and actually skied closer to home last year?

With the jobless rate at 10%

There was an article in the NY times that said that joblessness is disproportionately affecting lower income households and minorities. From my experience, although I could be wrong, on the EC skiing tends to be a middle/upper-middle/upper class sport. A lot of the east coast traffic is from urban centers where people have money to drive up.

Let's face it... it's pay the mortgage or take the family skiing. And lots of folks can't even pay the mortgage.

I think that the west has been hit much harder with the real-estate bust than the North East was. I remember reading that the worst hit states were Arizona, Neveda, and Florida. It could affect the North East ski scene, but then again it's effect could be over stated.

think that we will see a few bankrupties at some of the smaller less capitalized resorts .

That is probably true.

 

[Bluebird Day]

Don't kid yourself. I work closely with, but not for, Wall Street. Many of the I. Bankers and structured products guys I used to have contact with are now out of work. They have scaled way back and are in a survival mode. The reason why foreclosures in West Chester County NY and Fairfield County Ct are not indicative of the loss of jobs on WS, is that many of these guys were paying cash for their multi-million dollar homes when they were making "sick money" a few years back. The ski industry, and I working it for 7 years out of college, has always relied on the upper-middle class to provide "returning customer" business. NJ Shore rentals and in the "Hamptons" were down significantly this year compared to last summer. I think that this is a good indicator of the reduction in discretionary spending among the country's wealthest households. That same households that drive up the NYS Thruway every winter to ski at the NE resorts.

With respect to backcounty access... it has no baring on the economy, as it is only a few folks who have the ability, knowledge and equipment to do that on the East Coast.

Hope I'm worng and the resorts have a great year. BTW, I cancelled a Portillo trip in August this year, and I am (knock on wood) still employed.

 

[icelanticskier]

i'll be flying down to chili in less than a month. gonna book a flight in a week or so. never been. looking forward to 7 days or so of turns. bringing the skins to get a bit further out and about from the resort.

rog

 

[rfarren]

That same households that drive up the NYS Thruway every winter to ski at the NE resorts.

Or are those the households that go out west for ski vacations, that now will have to reassess and stay on the east coast?

 

[Geoff]

That same households that drive up the NYS Thruway every winter to ski at the NE resorts.

Or are those the households that go out west for ski vacations, that now will have to reassess and stay on the east coast?

That's what we saw last winter. I expect the trend to continue. With a drive-to trip, you can control your expenses much better than when you're a captive at a western destination resort. You can stay off-mountain. You can cook your own breakfast & dinner or do cheap takeout. You can brown bag it at lunch. You can buy a 6-pack and do your own happy hour instead of shelling out dollars in the bar. In the Vermont resort towns, meals & lodging were down more than sales (lift tickets, mostly). Vermont has all the data up on their web site so you can look it up yourself.

 

[Geoff]

Don't kid yourself. I work closely with, but not for, Wall Street. Many of the I. Bankers and structured products guys I used to have contact with are now out of work. They have scaled way back and are in a survival mode. The reason why foreclosures in West Chester County NY and Fairfield County Ct are not indicative of the loss of jobs on WS, is that many of these guys were paying cash for their multi-million dollar homes when they were making "sick money" a few years back.

I'm always blown away by people who seem to think that the New York economy is nothing but investment banking. With a metro-area population of around 18 million, exactly how many of those do you think were 7 figure income investment bankers at the peak? It's not like the metro area today looks like a Will Smith post-apocalypse movie. Most people still have jobs. Are they being more conservative? Sure. That's airplane trips, not automobile or group bus trips.

 

[Bluebird Day]

Geoff, as banking goes in NY, so does the entire City's economic health. There is no other industry in NYC that comes close to Wall Street as far as infusing capital into the local NYC economy.

I agree that more New Yorkers may go to the NE than out West this year. Another reason to go out West. \/

 

[icelanticskier]

so, i guess with many folks/families driving north to ski, maybe the resorts out west would suffer a bit more. mid-week non-holiday will always be like country club skiing for us weekend workers. been 18 years/since high school, when i was last exposed to sat/sun skiing. i'm certainly not envious of the idea, but i guess it spreads the world out very nicely. \/

rog

 

[Bluebird Day]

Maybe the unemployed bankers from NYC will be flocking to Northern Vermont during the midweek..... and spending the weekends with the kids in the Catskills.... that's a more likely scenario \/

 

[icelanticskier]

now that sounds like a plan! :-$

rog

 

[rfarren]

now that sounds like a plan! :-$

rog

And ski in strip-mall land? O

 

[Harvey]

A Wall Street big wheel bought the house next door to ours for his mother-in-law in. He paid maybe $325 and probably put $100k in renovations into it.

Like many of those guys he just assumed that his "bonus" was part of his income. He got up to his a$$ in alligators... and put the house up for sale for $435. He had one offer ($415) at the beginning of last year and didn't take it.

He finally accepted around $300 for it a few months ago. The day I ran into him he made this veiled reference to the fact that congress was threatening to limit pay on wall street to 500k.

Sitting in his M5 he says...."You JUST CAN'T LIVE on $500k in Summit NJ. If they limit pay on the street they'll have to bail us all out."

Yeah or maybe MOVE somewhere else.

The whole conversation was pretty surreal. I thought those guys were the "smart guys" playing the rest of us for chumps. What a tool.

 

[rfarren]

This year Wall Street has given out record bonuses. This is because the banks are recording record profits after last years dismal start and also because the federal bail out has worked so far. The federal gov't could put a cap on it, but they would be seriously undercutting the free market.

\

Sitting in his M5 he says...."You JUST CAN'T LIVE on $500k in Summit NJ. If they limit pay on the street they'll have to bail us all out."

Yeah or maybe MOVE somewhere else.

I don't think it's unreasonable to worry about the money you make based on the community you live in. I pay well more than other males my age in health insurance, simply because I live in NYC. Should I be forced to leave NYC because the city has a certain cost? Should I be forced to cut my rates for my business? I chose those rates because I factored in the cost of lifestyle here. I couldn't at all charge what I charge if I lived somewhere else. Furthermore, I couldn't live as well doing what I do in another place. I don't think that is different than many of those who expect bonuses. The bonus is a well understood practice on wall street. It is how they attract the highest talent to a specific firm. Many people live where they live because that is where their jobs take them. If that place requires a certain way of living, and the jobs provide a means for it, what's wrong with that? If all the sudden, out of populist sentiment, the federal gov't said "your job isn't worth that," would that be right? Don't get me wrong, I'm no conservative but how are you going to knock a guy for: a) expecting to get bonus, b) being upset for not getting one, when it's an understood practice, (and that's why you took that job in the first place) c) being alarmed that the federal gov't was going to screw your lifestyle over, and D) the federal gov't wasn't taking account of your lifestyle based on your local economy.

To bring this back to skiing, I think most people who ski are more or less well off. Those who ski may make less, but I think they will still ski. They may not spend 3K on a weekend in aspen, but they'll go skiing. They'll go to Killington, Whiteface, Gore, or anyplace where they can go for $300 instead of 3K.

 

[Harvey]

My point was that you'd think a guy from wall street would be smarter about money. He bought high and sold low...riding the price of this place down to the bottom.

And It turned out that his bonuses was not guaranteed compensation. (That like being surprised that something labeled "bomb" blew up - it's right in the name.)

By assuming it to be guaranteed he was in a position where he was "forced" to put his mother in law out on the street. Still he was hanging on to his 2 million dollar home and his bimmer and complaining about it to a guy who lives in an 1100 sq foot house.

I guess it not just the stupidity that gets me. The sense of entitlement is mind blowing.

I don't advocate congress setting pay. Once you do that capitalism will stop working. But I think they played it exactly right. Rattle your sword about it and all of a sudden that bailout money gets paid back pretty darn quick.

Sorry for the drift.

My completely uneducated guess is that skier days will be ok and that all the stuff that dropped this year...the ancillary spend...will be better than 08/09 but not as good as the year before. I think things are looking up, slowly. Unemployment is a lagging indicator, but as stated earlier in the thread - it has his the lowest paid the hardest. These folks aren't skiers.

 

[Geoff]

My point was that you'd think a guy from wall street would be smarter about money.

What makes you think that? When you're pulling down 7 figures with no end in sight, there is no particular reason to be "smart" about money. It's a bottomless supply. The guy eeking out a living has to be way smarter about money than someone who is pulling in large compensation.

I guess my whole issue with investment bankers is that they provide very little value add to society. I've done a number of tech startups over the years. You can't sell one without pulling in the investment bankers. They don't identify the likely acquisition candidates. We do. They don't negotiate the selling price. We do. And for basically zero value-add, they suck 10% off the top. It's also in their interest to merge and sell companies regardless of whether it makes sense since they profit no matter what happens later. No different from a realtor or a mortgage broker but with much higher commissions and much bigger deals. You can point to the M&A frenzy of the last few decades with the lax enforcement of anti-trust policy greased by generous campaign contributions as a root cause for the creation of all these big, ponderous companies that became too big to fail and need federal bailouts.

 

[Bluebird Day]

Sitting in his M5 he says...."You JUST CAN'T LIVE on $500k in Summit NJ. If they limit pay on the street they'll have to bail us all out."

I have to say that living in NJ is quite and experience. Bravo channel recently ran a show called "Real Housewives of NJ". That show is complete nonsense. The families on that show are representative of the "wealthy wannabes" that got us into this mess. I live in a quiet Western NJ county dotted with estates and horse farms. That's were the wealthy live, except for me..... One of my neighbors is building a $30-40M equestrian facility for his daughter's 20 horses.... My point is that the wealthy will always be wealthy. Whether your net worth is $500M or $300M due to a loss of asset value, is irrelevant. Actually, it sounds like the guy from Summit was fairly responsible with his investment of only $500K on a second home. An average house at the Jersey Shore is still over $750K.

 

[rfarren]

New Jersey is the only state where (in a car) to make a left you have to turn right. O

 

[Bluebird Day]

That's because the roads are built by the MOB and that means more revenues for the MOB and kick-backs to our crooked politicians. The Russian's could learn something from NJ politics. ](*,)