Diamond offers reasons for optimism

Ski Corp. president says most market indicators are positive

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— Chris Diamond kicked off Thursday morning's Business Outlook Breakfast with a dose of optimism about the approaching ski season.

"As distressing as some of the news is, it's hard to find a metric this time of year that isn't positive compared to last year," the Steamboat Ski and Resort Corp. president told a crowd at Rex's American Grill & Bar.

Some ski season flights are 60 percent to 80 percent cheaper than this time last year, Diamond said. Gas is more than a dollar a gallon cheaper, and consumer confidence is increasing from its all-time low in February.

"We're not headed back for boom times," Diamond said. "If you look back two years ago, I don't see any way we can get back to where we were in '07- '08. : (but) It's going the right direction."

Diamond spoke as part of a panel of business leaders at the Steamboat Springs Chamber Resort Association event. Other speakers were Bob Milne, president of Steamboat Resorts; Dean Vogelaar, president of the Steamboat Springs branch of Mountain Valley Bank; Ulrich Salzgeber, incoming president of the Steamboat Springs Board of Realtors; and John Shively, president of Shively Construction.

The numbers back up Diamond's hopeful statements. Consumer confidence was up to 54.1 in August from 25 in February, according to the Conference Board, which started measuring the index in 1967.

The average price for a gallon of unleaded gas was $3.68 on Sept. 21, 2008, according to local prices published in the Steamboat Today each Monday. The national average was $3.75, and local prices ranged from $3.93 to $3.99 a gallon.

On Sunday, the average price in the state was $2.45 a gallon, and the national average was $2.55 a gallon. Steamboat's prices ranged from $2.39 to $2.60.

"The last year, basically, the sky was falling and the floor was shaking," Diamond said.

There was "extreme volatility in the markets, and it was very hard to get a fix on what was going to happen to our business other than it was going to be awful."

Ski Corp.'s key measurements are airplane seat bookings and Steamboat Central Reservations, he said.

About 20 percent of the ski season will be on the books by the end of September. The air program has been cut by about 14 percent through planning and the exit of Frontier Airlines.

At this point, Diamond said, plane bookings have increased by 7 percent compared with 2008. But, he noted that the 2008 figure was down 33 percent compared with 2007.

However, the tourism economy in Steamboat Springs isn't out of the woods. Inflation is a concern, as is a decrease in average daily rates for lodging. Milne said Steamboat Resorts had offered steep discounts and was trying to increase its visibility to combat the economic downturn.

"In summary, I think we'll see more guests this year," Diamond said. "We'll probably see them (booking) a slightly shorter stay, we'll see hands in pockets, real pressure continuing on high-end retail."

But if the upswing continues, Diamond said, things could turn around in March.

Times still are challenging the real-estate and building arenas, Salzgeber and Shively said.

In August, 72 properties sold for a combined $33 million, Salzgeber said. That was the second highest-dollar month this year after July.

But that dollar figure is 56 percent of what it was in August 2008, he said. Volume in August 2007 was $152 million.

He said Realtors expect a turnaround in the second half of 2010.

Shively said the construction industry was still seeing few new home starts.

His business did about 75 percent remodels and 25 percent new homes when he started it in 1983.

Those percentages flip-flopped during the housing boom in Steamboat and appear to be adjusting again, he said.

"We see people who want to build that have the money not going forward because of the uncertainty in the marketplace," Shively said.

The Chamber is planning its next Business Outlook Breakfast for early December.

Comments

kathy foos 5 years, 2 months ago

Maybe there is a real psychic around to give a better projection about how much money realitors and the ski area will make.Do you call this a news story?Scott you bring up the possibility of cheaper rates,nice thoughts,in reality they are probably planning an increase and didnt do it this year to give everyone a break,watch for the increase next year and they will double the amount then to cover this year when they couldnt.

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Tubes 5 years, 2 months ago

um...they did lower lift ticket costs. season passes went from i think $999 in 2009, to, i know $879 this year--if you bought by june 1.

comparing our lift ticket costs to the I-70 resorts couldn't be anymore of a TIRED discussion. seriously, our costs will NEVER, i say NEVER, be in line with the others. get over it people.

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Scott Wedel 5 years, 2 months ago

He said Realtors expect a turnaround in the second half of 2010.

Or in other words, no turnaround for at least 6 months and then we'll hope it gets better.

I am getting more and more bearish on the immediate future for real estate. Volume is still beyond dismal. Number of transactions is still two thirds lower than the previous worst July since 1998. Nearly a year with a broken RE market is really bad. It means the situation is not a blip and is not on a path to recovery.

It seems that the only working RE market is in Red Hawk Village which has had foreclosures and has established about $300K (or $150 per sq ft) as a fair price.

Right now we have absurd situations such as something like 8% of Stagecoach townhomes are for sale and they are still looking for the price that will bring in a buyer. When "Rock Bottom" not only fails to sell quickly, but fails to sell then what next? A potential buyer can afford to wait. So I think it is going to take foreclosures and bank sales to establish prices.

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JLM 5 years, 2 months ago

The market has not yet felt its bottom. Asking prices are not the same as actual trading prices. Resort real estate in the entire country has fallen through the floor including places like Myrtle Beach, Boca Raton, Highlands/Cashiers --- SBS is right on glide slope for the same outcomes.

Resort real estate trades in season to season cycles just as school years impact selling prices and times for real estate in select school districts.

The next likely trading nexus is just before the beginning of the next ski season --- summer of 2010 at the earliest and likely summer of 2011. Time is a heartless b!tch!

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Scott Wedel 5 years, 2 months ago

JLM, Real estate trades is seasonal, but certainly not as much as commonly claimed. For instance in 2004 according to the county website, January had 129 sales while July had 189. That appears to be a normal seasonal ratio. But July 2009 had 48 transactions.

Obviously pricing is not attracting buyers. The trouble for sellers in this situation is that no one wants to be the one that sets the bottom. So they all look at comparable listings and if intent on selling then they list at the lower end of the comparables.

But the trouble is when so little is selling, comparable listings are irrelevant. So everything is listed above what would attract a buyer. How can 35 year old Stagecoach townhomes be listed at $150 per sq ft while 2 year old Red Hawk single family homes are also listed at $150 per sq ft?

Which is why I think it is going to take foreclosures to set pricing. When the seller is a bank that is going to sell it regardless then they will take $110 or so a sq ft for 35 year old townhomes. A few of those will set pricing.

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Scott Ford 5 years, 2 months ago

I hope that this will not take the discussion in a tangent direction, but why should any local business (including the ski area) give "locals" a special discount. Do we deserve one just because of our geographic location? How do define who is local and who is not?

I have trouble understanding the sense of entitlement some folks have when it comes to asking (demanding) a local discount and feeling offended if they do not receive it. Perhaps in recognition of our agriculture heritage those seeking discounts should wear permanently attached numbered ear tags. This would make it easy to identify those who want to be considered a "local". Better yet, the ear tags could be offered in the choice of two colors orange and yellow. This sure beats getting branded on the backside.

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freerider 5 years, 2 months ago

WTF ....Why don't you lower the cost of a frickin lift ticket....geeeez Vail went to $550.00 UNRESTRICTED PASS ....HELLO ??????

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Tubes 5 years, 2 months ago

i'm with scott. not sure why some feel they're entitled to something for nothing. and yeah, i just said being a local is nothing--which is what it really amounts to in that discussion.

don't you think there's a reason the i-70 resorts are in the $400-550 range, and the more remote resorts (like say, steamboat, aspen, and telluride) are more in the $900-1100 range? does it really have to be explained? do people really fail to see the reason for this? c'mon!

i, for one, find it to be a good deal to have unlimited access to that ski mountain for under $900 (or $1000 for that matter.)

just sayin'.

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Scott Wedel 5 years, 2 months ago

Mr Ford, I think the sense of entitlement comes from the ski area asking for community assistance in promoting the ski area. Also, from the ski area wanting volunteers for events held there. And from wanting (and promoting) SB as a friendly place to ski.

It comes down to whether the ski area has a role as a community organization or is it a purely commercial enterprise. That is a question of both of what does the ski area want and what the community wants.

It matters because if the ski area is seen as part of the community then tourists are also guests of the community and so there is more of a reason for everyone to be nice to tourists. If the ski area is purely a commercial enterprise then tourists with problems should not expect help from anyone other than paid ski area employees.

If I'm a local with a schedule that limits how much I can see and I'm skiing on an expensive pass calculated to be as profitable as possible then why should I take time to help some tourist that left a ski 50 yards uphill?

I remember as a child learning to ski and going to both Squaw Valley and Alpine. Alpine's ski operators and ski patrol were friendly and helpful. Squaw was the exact opposite. And so it took 10 years before we felt like spending another day at Squaw. And Squaw's reputation for that actually ended up affecting business and later on they made an effort to become friendly.

SB does not have to be a friendly ski area or place to visit. If the ski area wants to promote SB as a friendly place to visit then they need to act as if they are also part of the community.

Though, being part of the community is much more than the pricing of the ski pass. And it is complicated by the fact that the ski pass seems to increasingly be purchased by people that ski 100 days a year while more and more locals don't buy a pass, often because people with real work schedules don't have enough days off to ski to justify a pass.

Seems to me that the ski area should be able to offer a true local workers pass that is good for one day a week plus 5 bonus days. That is the sort of pass that would bring much more of the community to the ski mountain.

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JLM 5 years, 2 months ago

Seasonality in real estate is defined as much by when properties are listed for sale as much as when they sell. In this market, which is clearly a buyers' market, timing is on the side of the buyer as the precious commodity is cash rather than the supply of real estate.

To further accurately understand the seasonality of a market, it is also necessary to differentiate between new product (which comes on line in accordance with its completion rather than any real seasonal implications) and existing product as well as bank owned product. Both new construction and bank owned real estate march to a different beat than simple seasonality.

Banks sell real estate not based upon perceived real estate value but rather based upon their accounting treatment of the sale transaction itself as well as the carrying cost (property taxes, insurance, maintenance) of the property.

A bank which has obtained a property at foreclosure is often "foreclosed" from selling it for more than the price at which it acquired it through the foreclosure process. This serves to frustrate the recovery as the banks are not trying to meet or measure the market or even to resist falling prices.

Banks are further under pressure from bank regulators to show progress from inspection to inspection in dealing with their REO (real estate owned) account. This often creates seemingly illogical sale transactions simply to placate the bank examiners.

Upon reflection I suspect that a resort like SBS which arguably has two distinct tourist seasons probably has a bit of a leavening impact rather than a more pronounced single season marketplace. Properties whose unique selling advantages are focused on skiing may feel a more pronounced impact --- a further subdivision of the market.

Resort property selling prices are still searching for the bottom and will be for some considerable time.

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seeuski 5 years, 2 months ago

Wow Scott, real nice. You adjust your attitude towards your fellow man based on what you had to pay for a season pass. A few questions or food for thought.

Which pass is of greater value, the season golf or the season ski? Which is cheaper? Which operation carries the larger cost to maintain? Which requires the most employees to run? Which costs more for liability insurance? Does this ski area draw from as large a purchasing populace as the front range resorts that are continually compared to Steamboat in price? If the ski area shut down the lifts and all of it's operations for the season and said go ski for free would all the complaining go away? As a local the price of a season pass at $879 is a bargain to me. The resort does have openings for part time and full time employment for locals like yourself which gives you a pass for free. I say go and enjoy the skiing because if we do suffer from what some have said is coming we will lose the snow cover on the bottom half of the mountain, hey wait, then we may get a 50% reduction in the cost of a ski pass. Come on, laugh a little.

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Scott Ford 5 years, 2 months ago

From my perspective, Ski Corp is a good corporate citizen. Better than most and likely worst than others. Could they do more? Of course! However, the suggestions on what they could do better - often are rooted in one's own best interest. Agree? How does doing even more for locals benefit the Ski Corp's business model?

If they have to compensate locals to be friendly - or at least fake being friendly, I think there is a name for this very old profession. I am not sure I have the necessary skills.

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freerider 5 years, 2 months ago

CMON FOLKS almost $ 100.00 FOR A LIFT TICKET in Steamboat , YOU GOTTA BE KIDDING ME ....VAIL is smart for their marketing plan , I was over there last year and it sure didn't look like there was a recession going on , no parking because the lots were full , long lines etc. etc. people would buy a pass instead of day tickets and return for more , which means more for everybody , hotels , restaurants , all the shops , lowering prices makes sense in a downturn .

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Scott Wedel 5 years, 2 months ago

I was just making the argument. I have not had a ski pass for years.

As for my idea of designing a ski day a week pass, I mention that because I know of more people that do not have a pass than have a pass. Virtually all of the people without a pass say they are too busy to justify buying a season pass. I suggested the day a week pass as something of interest only to locals so it would not affect their tourist income and as a way to get more locals skiing at the mountain.

A person already working 5 full days a week is not that interested in working another day a week in order to ski free that last day a week. The current ski area pass options are designed for people with lots of spare time.

I think there is a risk that over time that a smaller and smaller subset of the local population actually ski at the mountain. And then the ski area becomes only part of the local economy and not a community recreational resource.

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seeuski 5 years, 2 months ago

Ok yea sure Vail, Vail is on the Rt.70 Denver corridor. Geez. And Scott, aren't there some short term passes available like 20 day?

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