Steamboat Springs Steamboat Ski and Resort Corp. executives say Friday's layoffs at the ski area are symptomatic of national trends that could see paid skier days in the United States declining by a percentage point annually for the foreseeable future.
They say it became clear to them the trend isn't going to reverse itself, and they were obligated to adjust their business plan accordingly.
But Steamboat could see the drop in skier days come even faster than the national average, as the baby-boom generation ages, Steamboat Ski Area President Chris Diamond said. That's because Steamboat relies heavily on families and because the typical guest is 44 years old.
"My sense is, because of the age of our market, we may see the drop quicker," Diamond said.
The need to pull back personnel costs isn't coming just from declining revenues, Diamond said. The increasing impact of deeply discounted seasons passes offered by ski areas along the I-70 corridor is hurting Steamboat, and the ski area will have to accept "reduced yields" next winter on weekend packages for Front Range skiers. That's ski industry code for reducing the price of ski trips to Steamboat for Front Range skiers.
Those measures, yet to be worked out, are becoming necessary in order to lure skiers from Denver past the invisible barrier put up by Vail Resorts-owned ski areas like Keystone and Breckenridge, and the alliance formed by Copper Mountain and Winter Park. Their discounted season passes allow skiers to purchase passes for as little as $250 at Keystone/Breckenridge or $199 at Copper Mountain.
One skier area veteran, who didn't want to be identified, declined to discuss the specifics of the layoffs, but said the work force reduction in its various forms, affected most of the departments at the ski area. The employee added it was apparent a lot of effort went into trying to make certain the employees who remained would be able to pick up the functions formerly carried out by the people who had been laid off, and that those remaining wouldn't be overly burdened by taking on new responsibilities.
The health of the ski area is of concern to most businesses in Steamboat and the news of the layoffs was being observed closely by business owners large and small. Brett Lee, who runs Straightline Sporting Goods on Lincoln Avenue, said he reacted to the news of the layoffs on two levels.
"When I saw it, I said 'What's going on here?'" Lee said. "They got rid of (Les) Otten and now the new guy seems to be continuing the same trend (a reference to 1999, when the ski area encouraged a number of long-time employees to accept early retirement)."
However, Lee said as a businessman, he could understand the actions taken by ski area management, especially if the layoffs were necessary to remain economically healthy.
"If I was struggling, I'd be doing the same thing," Lee said. "You can't keep people just because they've been with you for a long time. I'm sorry it has to be that way people are hurting. But if our ski corp. goes down, we'll all be hurting. It's a tough world out there, and Steamboat's not immune from that."
Diamond said this spring's layoffs and other workforce reduction measures have been carried out far differently than those of 1999. The layoffs this year were not on the basis of job performance, nor were they made on the basis of seniority, he said. Instead, a careful study was undertaken to determine which positions could be most easily sustained, given their relative importance in light of declining business.
Paul Clavadetscher, president of Community First Bank, and a former chamber resort association president, said in light of similar layoffs at Aspen and Vail, the actions taken at the Steamboat Ski Area this week seem to be consistent with what's going on in the industry.
"It's an extremely tough decision, and extremely tough on those people who are affected," Clavadetscher said.
Clavadetscher said this week's news should get the attention of the broader community.
"The ski corp. is not the only company in town that has had layoffs," Clavadetscher said. "This is a trend we as a community need to understand and listen to. We need to understand how a decline in tourism affects our community and affects our neighbors and their families. We are starting to feel the effects of a decline in the tourist industry and we're seeing the impacts on our neighbors."
Diamond said the Steamboat Ski Area is being forced to react to the buddy passes being offered by its neighbors in order to preserve its share of the Front Range skier market.
Ski Area Vice President of Marketing Andy Wirth said the Front Range represents between 12 and 14 percent of Steamboat's "paid skier days" (that figure excludes people skiing and riding on season passes), and that Steamboat absorbed a roughly 20 percent decline in its Colorado business last season, equating to roughly 20,000 skier days.
Diamond said the initiative to shore up Steamboat's visitation from the Front Range by reducing yields shouldn't be mistaken as an across the board cut in lift ticket prices. Instead, he said Steamboat will look closely at how to attract new skiers and riders from the Front Range to Steamboat. They'll also target families, which typically aren't as attracted to the discounted buddy passes.
One veteran Steamboat employee, who preferred not to be named, said the reduction in lift ticket prices should go further. The declining skier days that are leading to layoffs throughout the Colorado ski resort industry are precisely a result of lift ticket prices that are too high, the employee said.
He said he's felt for a long time that ski vacations are growing too costly for American families.
"I saw it coming 10 years ago," he said. "It's too damn expensive. "I've had friends that came up here but they won't be coming back because it cost them $7,000 to $8,000 to bring their families on vacation. Lift tickets cost $59 and every time Dad's turning around he's shelling out another $50."
Acknowledging that few vacationers actually pay the open price of $59 for a daily lift pass, he said all of the deals are too complicated, and if ski areas simply reduced the price of a daily ticket, they could attract more skiers, and have an opportunity to make the money back in other ways.
Wirth said it's important to understand that the Steamboat Ski Area has a different business structure from Vail Resorts and other ski areas closer to Denver. Vail offers its buddy passes primarily at Keystone and Breckenridge but allows pass purchasers to buy 10 days at either Vail or Bever Creek as an add-on. The option of having a top-draw ski area like Vail in conjunction with other ski areas, is a powerful tandem, Wirth said. Steamboat has the premier skier area but not the others.
Steamboat is also at athat regard because it is roughly 90 minutes further form Denver than the I-70 ski areas.
Still, the increasing pressure to compete with the buddy passes means Steamboat will have to try some new programs and reduce the cost of skiing here for skiers in Colorado's competitive Front Range market.
"Looking forward, we're going to be getting very creative," Wirth said. "We're going to have to drive our yields (on the Front Range) down to hold our business share."
To reach Tom Ross call 871-4210
or e-mail firstname.lastname@example.org