It's the economy stupid!

[Lifty@50]

I stopped in my local ski shop yesterday to return my daughter's seasonal rentals and noticed that the shop did not have their usual close-out rack of skis and boots. I asked the store manager why and was told that the owner is going to wait until the fall to put them out because he will need them to fill the wall. He said that they are going to be ordering a fraction of what they have in the past, based on what they see as a disasterous ski retail season in the NE. He said that many of the shops are cutting back on the orders they placed last winter at the ski retailers show. I've read that the price of fuel will preclude many families from traveling to ski areas and the loss of "paper wealth" will prevent people from spending much on the non-essentials. I wonder what shops and ski areas will be left after this year's prejected lackluster ski season?

 

[icelanticskier]

to me it's a great economy for skiing, less crowded slopes, closed ski areas for bc access. maybe i'll start skiing jay again as maybe less folks will drive there. high fuel prices, it's about time. the more people have to pay, the less they'll buy and the more we'll have in the future.
just my 1 cent.
rog

 

[Lifty@50]

to me it's a great economy for skiing, less crowded slopes, closed ski areas for bc access. maybe i'll start skiing jay again as maybe less folks will drive there.

Glad to see that the old New England spirit of independence is still alive and well. True that higher fuel prices means less skiers, but what about all those folks in VT, NH & ME who rely on the winter tourists to fill their bellies and woodstoves, not to mention the mortgage. Ain't much money in maple syrup anymore.

 

[Patrick]

Glad to see that the old New England spirit of independence is still alive and well. True that higher fuel prices means less skiers, but what about all those folks in VT, NH & ME who rely on the winter tourists to fill their bellies and woodstoves, not to mention the mortgage.

Although I agree on some of your concern, a good part of skiers (not necessarily ski forum junkies like us) are pretty much is the well off crowd, so I don't know how much the ski areas will take a hit?

For us Canadian folks going to the US, the price of gas will have less impact that the old 50% exchange rate. Even if the gas prices are high, lodging and travelling in the US East coast is real big this Summer again. However this not might apply to Jay as they accepted Canadian dollar at par. :wink:

Ain't much money in maple syrup anymore.

Well, actually maple syrup is a bit like oil...demand is much higher than supply. $$$ Maple syrup producers (at least in Canada) are producing much less due to the last few Spring and less than ideal weather. Blame it on Global warming. :shock: #-o

 

[salida]

Just do some carpooling. Really brings the gas down to more reasonable levels. I didn't think the NE ski areas/shops were hurting after last season. I was under the impression times were good from most of the dealers I spoke with.

 

[Harvey]

Carpooling will help a lot. (Although my car is already full with family and my 2 year old never seems to chip in for gas.) But it's not just the cost of gas to get to the mountain. Winter fuel costs are going to be incredibly high in the northeast this year, especially for those using fuel oil. Food costs are higher. And unemployment is creeping up.

I'm trying to figure out how we are going to deal with it. One thing that would really help us would be for me to take the Civic (42 mpg) versus the CRV (28 mpg) when I go solo. It means parking at the bottom of the driveway and walking 600 feet, but hey. It also probably adds some excitement to those trips made to the mountains when it's storming. Fewer, longer trips cut down the fuel cost but decrease the flexibility to get the goods.

Somehow I get the feeling I'll get my days in. [-o<

 

[Geoff]

In my opinion, the people who would be paying retail at a shop near a ski resort aren't going to be particularly impacted by higher gasoline prices. The people on the margin are likely outnumbered by the Brit and European bargain hunters who started showing up over the last few years buying complete packages because everything is half price compared to Europe.

A ski shop at a budget/family-oriented ski area has more reason to be concerned with the regional economic conditions. If you cater mostly to day trippers and people staying in inexpensive motels well off the mountain, a slice of that customer base is likely to be busy paying for their home heating oil and gasoline to commute to work.

The gasoline and crude oil price bubble may have burst by the time the lifts spin next November. I don't think the sky is falling yet.

 

[rfarren]

The gasoline and crude oil price bubble may have burst by the time the lifts spin next November. I don't think the sky is falling yet.

I don't expect oil prices to come back down thanks to china and india. I do however, expect snow to fall, and skiers to ski.

 

[riverc0il]

Being in the business of retail management myself, I am always surprised by how much inventory gets held over for clearance during the summer. Clearance is a part of the business and a good part if purchases are done correctly. But large clearance of normally full priced items being held over for longer periods is not a good thing. The idea is to move old merchandise quickly and reinvest your break even money into your better selling product. Clearance can also mean increased cash flow during a period of time that customers are unlikely to buy. While it seems like a smart idea for the retailer in question to reassess purchasing numbers to reduce potential mark downs the following spring, holding over clearance inventory for the fall would reduce summer revenues and mix new product with old product. Interesting strategy but I think reducing ordering numbers would be the better answer. The tent sale at Sport Thoma seems about the same size as last year but it still amazes me how much they over order merchandise and sell at clearance during the summer. Could be part of the business plan but from a retail management perspective, it just seemed excessive.

Any ways, the economy will hit hard. It is an issue. Yes, many skiers are affluent, but the majority are middle and upper middle class. Where there is a will there is a way. But for the average skiing family that sustains the business by taking a few expensive ski vacations every year, those families are likely to cut back. Often times, when bad economic times hit, those that feel a pinch cut back even if they don't need to and those that don't feel a pinch still cut back on general principle of not spending as much during the bad times. What effect will this have on ski areas? I would be more concerned about expenses than revenues from the perspective of the ski industry. Skier visits can often times be effected by weather and snow but energy prices and the cost of doing business will go up regardless this winter. This will likely create opportunity for certain resorts (bigger name resorts, closer to home local ski areas, metro areas, etc.) and create challenges for many (lesser known mid-sized mountains that are already struggling).

Ski shops are seeing increased competition with lower prices including last seasons new products at 50% retail. Service is becoming increasingly important and is a huge opportunity. I rarely feel serviced properly at most ski shops and am very surprised by that fact. It is becoming well known by skiers in the know to buy online if possible or wait for the end of season deals. Deals deals deals. It is no longer something skiers hunt for but rather the expectation and that can't be good for ski shops.

Challenging times for the consumer and challenging times for business for sure. If the market is over saturated with too many ski shops or too many mountains for demand during a slow time, the market will weed out the poor performers whether they are good mountains and good shops or not. I certainly wouldn't mind a place like Jay being a little less crowded but would hate to see things balance off with a place like Tenney going out of business. Besides, I expect distance locations such as Jay would benefit from the economic downturn as doing longer trips instead of day trips and weekend trips to maximize time and money could occur. Why drive three weekends when you could just take a week long vacation, if you are average joe skier? Makes sense to pick a bigger destination mountain with better snow if you only have one chance/choice. Increased bed base at Jay will also make a big difference next year and CAN to USD only benefits the Canadians. Nah, Rog. I doubt you would appreciate Jay even mid-week.

 

[EMSC]

Wrong region to discuss in I guess, but the thread is already here..., but anecdotally, I know of real estate listing prices being cut in Breckenridge recently and a claim by one real estate agent up there that year to date sales volume is running at about what they used to do in just one month... (no published facts to back that up, it may just be that agent or office having a bad year).

Though Vail Inc has a huge hole dug out at the base of Peak 8 (and the old double lift base terminal is being moved uphill a bit - no alpine slide this year, etc...). So I guess Vail inc feels confident enough to keep going on new construction - probably because slope side will always do better than average in price and sales volume.

Coupled with the bankruptcy of high end Tamarack, ID, etc... perhaps the high end is either feeling the pinch (which would indicate mtn real estate has topped out/cannot sustain much more price inflation possibly longer term), or that the high rollers are simply being cautious with their money due to all the economic uncertainty (which would indicate just a pause for a year or two before prices in the mtn resorts climb rapidly to ever more stratospheric heights). Either way, it'll be interesting to watch.

 

[Skidog]

high fuel prices, it's about time. the more people have to pay, the less they'll buy and the more we'll have in the future.
just my 1 cent.
rog

wow thats a really nice outlook for families that need to put food on the table and get to work daily...lets not worry about how high the gas prices go as long as the skiing is less crowded?? :roll: #-o

M

 

[icelanticskier]

hey,
everyone makes choices in life and some make choices without thoroughly thinking about the consequences. people get married and have kids and that costs money and many have more kids and don't have the increased income to adjust to the choice made. if folks can't get to work or put food on the table cuz gas and food prices have gone up well, they obviously didn't plan ahead for potential economic downturn that we are now experiencing. les and i were out riding yesterday and saw a for sale sign in front of a house and the young 30's guy said he and his wife moved out here from oregon a year ago and bought the house sight unseen. when they came out with a young child they realized making ends meet would be tough so, what do they do? they just had another kid and have to sell the house which is way over priced imho to move to a larger home cuz of the increase in family size. the market here sucks right now and the taxes are stupid so even if they rent it out it'll only cover like half of the mortgage so he then says if it sells they may have to move back to oregon. people do this crap all of the time, living on the edge or above their means. we're an overly consuming society. can i afford to ski whenever/wherever i want and drive to work and eat good food-hell yes! throw a kid into the mix with my income and i'd never be able to leave town. that's the choice i make. everyone makes choices, some good and unfortunately many not so good.
rog

 

[Tony Crocker]

Interesting tie to the other thread. Icelantic's comments may sound harsh, but they are realistic. It's a pipe dream to think you'll have 80+ day ski seasons with young kids. I did well enough to average 25 or so.

I'm very reluctant to make economic projections. Over the past 25 years downturns have tended to hit selected sectors hard while many others are business as usual. So it's particularly speculative to project some industry like skiing. Housing being the bad sector now does have high negative potential, but overall economic numbers aren't showing it much yet.

While we all enjoy uncrowded skiing, we most definitely do not wish that upon the industry as a whole. Because a contraction will result in more closed areas, fewer expansions and improvements. And more crowding when the economy revives. It's not so easy to resuscitate a dead area, as the Waterman saga demonstrates.

 

[Geoff]

Interesting tie to the other thread. Icelantic's comments may sound harsh, but they are realistic. It's a pipe dream to think you'll have 80+ day ski seasons with young kids. I did well enough to average 25 or so.

80+ ski days is tough for anyone to achieve with a full time job. I can think of an awful lot of people in my social circle who averaged 50+ with kids. Their income level runs from "more money than god" to school teachers, truck drivers, and state social workers. If you live in LA, it might be a problem. If you live in New England, it's no big deal.

 

[J.Spin]

Interesting tie to the other thread. Icelantic's comments may sound harsh, but they are realistic. It's a pipe dream to think you'll have 80+ day ski seasons with young kids. I did well enough to average 25 or so.

80+ ski days is tough for anyone to achieve with a full time job. I can think of an awful lot of people in my social circle who averaged 50+ with kids. Their income level runs from "more money than god" to school teachers, truck drivers, and state social workers. If you live in LA, it might be a problem. If you live in New England, it's no big deal.

I very much agree with ice in that many people live right at or above their means, and there’s just no room to give when conditions change. A lot of people love that stuff though, they enjoy keeping up with the Joneses and dealing with all the associated hassles. It’s just their way of life. It’s not really “natural” to live well below your means, and the concept of actually putting more effort into your finances just so you can lower your standard of living is pretty much lose-lose, so why would anyone do it? I also think it’s far more than a pipe dream to have “big” ski seasons with young kids. It may not be as practical if one doesn’t have ski areas close by, but there are several people on SkiVT-L with kids putting in substantial seasons that appear to be well into the range of what Tony is talking about above. Wes Wright, the administrator of SkiVT-L, has a young son and even managed 100 days for the ’06-’07 season. Even if you have regular 9 to 5 full-time job like most if not all of these guys do, if you live near the slopes, it really takes little more dedication that being able to put in your daily time at the gym. You head up for a run, or two, or a few before or after work (or both) and there you go. You got your skiing in for the day and you got your workout as well. Some people might raise the issue of what constitutes a ski “day”, but it's tough to make really convincing arguments about such an arbitrary designation. Personally, Erica and I heard time and time again: “You’d better enjoy all that skiing and outdoor stuff that you like to do now, because once you get married and settle down, that’s the end of that.” And then came the inevitable “You’d really better enjoy all that skiing and outdoor stuff that you like to do now, because once you have kids, that’s the end of that.” I'm not convinced that's the case.
-J

 

[Skidog]

Interesting tie to the other thread. Icelantic's comments may sound harsh, but they are realistic. It's a pipe dream to think you'll have 80+ day ski seasons with young kids. I did well enough to average 25 or so.

80+ ski days is tough for anyone to achieve with a full time job. I can think of an awful lot of people in my social circle who averaged 50+ with kids. Their income level runs from "more money than god" to school teachers, truck drivers, and state social workers. If you live in LA, it might be a problem. If you live in New England, it's no big deal.

I doubt ill ever see the 85+ days (and still going) this season and i DO WORK FULL TIME (avg 50hrs a week) as there is a little bundle of joy arriving in October, but I am still on target for roughly 50+ even with the kid. Its doable if you live close to a resort that has a long season, but not "easy" by normal means.

M

 

[Harvey]

I very much agree with ice in that many people live right at or above their means, and there’s just no room to give when conditions change. A lot of people love that stuff though, they enjoy keeping up with the Joneses and dealing with all the associated hassles. It’s just their way of life. It’s not really “natural” to live well below your means, and the concept of actually putting more effort into your finances just so you can lower your standard of living is pretty much lose-lose, so why would anyone do it?

I'm amazed at the pressure we get from people to increase our spending. The one we get most often is "Your house is too small." In general the "Joneses" think I'm cheap. I think they are right.

I was blown away at a recent cocktail party to learn that three guys I had met were taking some kind of sleep medication... ambien or something else. I asked why....all three said basically it was financial pressure. I couldn't believe it. I know for a fact that two of them were what I would call spenders, and (to Rog's point) never really thought about the cost of having a big family. One guy lives in Northern VT, loves to ski, and never does because he's traveling all the time, on business, to pay for it all.

 

[Tony Crocker]

Some people might raise the issue of what constitutes a ski “day”

I would be one of those people. Or rather would point out that vertical is a less imperfect measure of how much skiing one is doing. Nonetheless I'm quite envious of those who

live [so] near the slopes, it really takes little more dedication that being able to put in your daily time at the gym.

I think that's a good way to look at it, actually. A couple of hours at a local molehill is a good substitute for gym time, a run or hike, etc.

I'm amazed at the pressure we get from people to increase our spending.

That depends on one's social circle I think. Is there no implied pressure on FTO to increase one's spending on skiing?

To each his own. Most people would consider a 5-digit ski budget wildly extravagant. The fashion police have noted that I can be frugal in other areas.

 

[rfarren]

I'm not sure how my business (teaching and private tutoring) will be hurt by the recession. I will say this: I just moved, and the cost of moving was ridiculous. Moving to a bigger place has its benefits, but you have to buy all new furniture. That said, I have to go to Italy next may for my sister's wedding, and I'm afraid I might have a year of skiing in the single digits, just due to financial constraints, and future considerations... i.e. going to italy.

 

[jamesdeluxe]

Is there no implied pressure on FTO to increase one's spending on skiing?

You mean people telling us that we should bag skiing in our region in favor of flying four hours away? Nope, hadn't noticed.