Snow could balance bleak economy
October 29, 2008
Consumers are sitting on the sidelines and discretionary spending is down – neither is good news for mountain resorts eyeing the 2008-09 ski season. However, there is one variable that could change everything: snow.
“Snow trumps all evils,” Ralf Garrison said Wednesday during the Mountain Travel Symposium’s 2008-09 Travel Outlook.
Despite the gloomy economic indicators, if there was a choice between a good economy or snow, choose snow, said Garrison, principal of the Mountain Travel Research Project, which provided data for the symposium.
Snow is vital, as last ski season, the National Ski Areas Association reported its highest ever, 60.5 million skier and boarder visits, despite a weak economy.
“Snow is the key that unlocks the paradoxes,” Garrison said, adding that it is not just the cold, white stuff on the ground which is the attractant, but the “snow mentality.”
“Snow is more than weather, it is a state of mind,” he said. “As people decide what to do with their time and money, they are going to do what they are passionate about.”
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The key for ski and mountain destinations trying to survive in what is shaping up as a flat year is to change skiers’ perceptions and convince them that their vacation is needed.
Arthur Cassidy, a social psychologist, said there is an idea that when you’re not feeling good about life, you need to take care of yourself, then vacations become a “doctor’s orders,” Garrison explained.
As spending drops, discretionary spending is hit the worst.
“We fall prey to that at least as long as we fail to challenge that a ski or mountain vacation is discretionary. We might organize ourselves as a want or even a need,” Garrison said to mountain travel industry leaders at the seminar.
With the subprime mortgage problem beginning the economy’s woes, the result today is an all-time low in consumer confidence, Garrison said. The Consumer Confidence Index, released Tuesday, is 60.8 percent below October 2007 and dropped 23.4 points since last quarter, the largest drop ever.
“Consumers are extremely pessimistic … and this news does not bode well for retailers who are already bracing for what is shaping up to be a very challenging holiday season,” the Consumer Confidence Conference Board said.
Seventy percent of the nation’s Gross Domestic Product is consumer spending.
“In the last eight months, we’ve begun the death spiral (in spending),” Garrison said.
For mountain resorts, as of Sept. 30, the Mountain Travel Research Project shows that occupancy is down 11.1 percent for November through March. Last year, it was down 2.7 percent in those winter months. However, October and November are the most telling months for bookings, he said. In good news, occupancy in high seasons when children are out of school are coming on stronger than other times of the year, and there is a segment looking for bargain resorts, even if it is lower season and cheaper resorts farther away.
Dirk Beal, who is the director of sales and central reservations for Deer Valley, said higher-end lodging properties are lowering prices. Some prices have been inflated, so this is good for consumers, but he added that occupancy is not good for the higher-end demographic resorts. “We’re almost getting to a fire-sale mentality in our lodging industry,” he said.
In this type of economic climate, value and loyalty are two key factors for resorts. “Consumers must spend to support the economy, and our carrot is the ski vacation,” Garrison said.
Beal queried, “Is a ski vacation discretionary? Does snow trump all evils?”
The answers will be evident after the 2008-09 ski season: “What we don’t know is what the winter holds,” Garrison said.