Steamboat Springs The Steamboat Ski Area is heading from a soft patch into a few solid weeks of visitors, Chris Diamond said Wednesday morning.
Diamond, Steamboat Ski and Resort Corp.'s president, spoke with four other business leaders at a Business Outlook Breakfast put on by the Steamboat Springs Chamber Resort Association. In the coming weeks, flights are more than 80 percent booked, the highest since the after-Christmas period, he said. It's not unusual for the ski area to experience a lull at this time of year, Diamond added.
He expects the ski area to be down about 3 or 4 percent overall compared with the 2007-08 season. But he expects destination traveler numbers to be off 10 to 20 percent. Destination travelers are those who fly to Routt County or make an extended trip specific to this location rather than a day trip or shorter visit.
Bookings bounce up and down through the April 12 closing date, Diamond said.
"At the end of March, it's going to fall off a cliff - I'm not sure why," Diamond said. "Then in April, it picks back up."
Steamboat has gotten high marks from visitors in surveys, he said. But tourists have given resorts low marks for overall value. The ski area, like other businesses, is looking carefully at places where it can reduce prices.
Visitors are cutting back on retail spending and previously popular services such as children's ski lessons. The restaurants haven't taken much of a hit, Diamond said.
"What we're doing is right, and that's going to drive intent to return, and that's going to solidify business for next year," he said.
Although the ski industry is just one business in town, it affects all others, speakers said. Karen Schneider, of the Steamboat Grand Resort Hotel, spoke about the hotel's conference business, Board of Realtors President Lori Thompson discussed real estate, Tom Fox of Fox Construction addressed his industry, and local Vectra Bank President Bob Kuusinen spoke about finance.
The Chamber has held a couple of other breakfasts this winter. Today's was the last until summer, Executive Vice President Sandy Evans Hall said.
"I think it's important to keep all this information out front," Evans Hall said.
Ups and downs
Some of that information is negative, though presenters tried to remain optimistic.
Fewer companies are booking conferences at the Grand, Schneider said. Groups are hunting for bargains and are taking longer to book, she said. And for the first time in Schneider's 30 years in the industry, luxury hotels such as the Ritz-Carlton are courting conference planners.
She said some companies were wary of creating an appearance of luxury, however.
"We are right in the middle of that," Schneider said. "We are not a Ritz, and we are not a Super 8, so we're in a good position."
Because conference planners are shopping, service is crucial, she said. The Grand has people interested for summer and winter, Schneider said.
"We are working with people who have had their budgets cut," she said. "We know that if we show them we care now, when their green light does turn on, they'll think of Steamboat and the Steamboat Grand."
Most people know real estate sales have slowed, Thompson said. There are 1,994 residences listed in the Multiple Listing Service, she said. There are 94 pending listings.
"Of those 94, we see that many of them are the downtown projects that have not closed yet," Thompson said. "So not very many pending sales yet."
She attributed the slowdown partly to a gap between sellers and buyers. Sellers are pricing high, Thompson said, and potential buyers are expecting major price cuts.
"Historically, we've seen the prices in Steamboat have continued to increase, and this year, in 2009, I think they'll start to stabilize," she said.
The builders of those homes are being battered, Fox said. News has been grim in construction. However, he said his company has three projects confirmed for spring. Fox hasn't been able to increase wages, but he hasn't had to cut them, either.
Contrary to local myth, Fox said, construction costs haven't decreased 30 or 40 percent. They're not going to, he said. Most material costs have been steady, and wages aren't decreasing, Fox said. The cut in costs is going to come from contractors' profits, he said. He expects building costs to decrease 8 to 15 percent.
People still want to build in Steamboat, he said.
"The reality of it is there appears to be some pent-up desire. ... We have an awful lot of people who are ready to go or getting themselves ready to go," Fox said.
Kuusinen addressed financing for many of those projects. It has been tougher to get, but mortgage rates are great, he said.
Kuusinen added some good news from the Front Range. He recently heard a talk by Tom Clark, executive vice president of the Metro Denver Economic Development Corporation.
Clark "thinks that the Front Range will turn around in third quarter," Kuusinen said. "I'd love to see that, though he's probably paid to be optimistic."
Diamond said, as he has before, that he expects the next season or two to be challenging. He predicted that this season would set a standard after the boom of the past few.
"I would say for most of us in Steamboat, this is going to be kind of the base year," Diamond said. "I'm not counting on any gains in business going forward for next year, possibly two years. And of course the big question is, 'How fast are you going to come out of that?' And I'm not going to talk about that."