Aspen Skiing exec: ‘Brace for tough December’
Reservations down for the first six weeks of the season
November 26, 2008
Aspen — December will be tough for businesses in Aspen and Snowmass Village unless there is a miraculous surge in the number of tourists coming to town, business leaders agreed Tuesday.
Advance reservations on the books as of Nov. 15 show numbers are way off from Dec. 1 through Jan. 10, according to David Perry, Aspen Skiing Co. senior vice president, mountain division.
“The biggest negative we see is early season,” Perry said at an Aspen Chamber Resort Association board of directors meeting Tuesday. “Brace yourselves for a tough December.”
Christmas and New Year’s are the bread-and-butter time for the resorts. Lodges usually turn away last minute callers. Diners without reservations better have some pull or they will be out of luck. Shop owners count on consumers making a big dent in their inventory. But the bread isn’t buttered this season, at least not yet.
“There is Christmas space all over town – which is hard to believe,” said Warren Klug, general manager of Aspen Square Condominiums. He is hopeful that last-minute callers will materialize again and the holes in occupancies will be filled.
Double-digit drop possible
Roughly a dozen members of the chamber’s board of directors – representing the lodging, restaurant, retail, real estate and skiing industries – reported similar gloomy prospects. Restaurateurs are contemplating different strategies – sticking to their pricing or offering pricing options to spur business, reported Matthew Zubrod, owner and chef at Dish Aspen.
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“We’re overall forecasting for a 10 percent drop in business and hoping for the best,” he said.
Perry said a Skico analysis determined that the current level of bookings will produce a 12 or 13 percent drop in lift ticket sales to destination guests – the skiers and snowboard riders who come to Aspen/Snowmass for overnight trips. Those occupancy numbers will likely change one way or another, so the Skico is figuring on a drop of business ranging from 5 to 15 percent, he said.
It appears the Skico’s string of five seasons with increases in skier visits will end.
If Aspen experiences a poor start to winter, it won’t necessarily ruin the entire season. Reservations on the books as of Nov. 15 were reasonably close to levels at the same point last season for January, February and March. “There is plenty of time to recover,” Perry said.
The calendar is providing a couple of advantages. Mardi Gras and President’s Weekend are separated this winter, unlike last year, so that produces two busy periods. Easter is in April this season, further separated from most spring break periods.
No ‘fire sales’
Those advantages on the calendar have been offset by the volatility of the stock market, the collapse of major business institutions and the erosion of consumer confidence.
“About mid-September, our guests collectively put their fingers on the pause button,” Perry said. The telephones at Stay Aspen Snowmass, the central reservations agency, stopped ringing about then, reported Bill Tomcich, the agency’s president. But the stock market gains this week have resurrected the rings, he said.
Consumers are smart, Tomcich said. They know the economic climate creates the potential for deals, so they are shopping. Klug said that offering deals is good, but a “fire sale” would be bad for the lodging industry.
Aspen has created a brand image for itself that touts top-notch service at higher prices. Offering drastic discounts is also bad for “rate integrity.” Customers will become conditioned to expecting, and demanding, lower rates.
Perry said “strong, timely and strategically appropriate marketing” is needed. Promotions with special deals can “get people off the dime,” he said. But other resorts have over-reacted with too deep of discounts. “No fire sale,” Perry said.
The consensus at the ACRA board meeting was the need for Aspen/Snowmass businesses to stick to the high quality service that the resorts are known for. Now isn’t the time to skimp on service, several directors agreed.
Snow: The wild card
Snow remains the wild card. Ski industry officials insist that average and above-average snowfall will cure many of the ski industry’s pre-season ills. Michael Berry, president of National Ski Areas Association, said from his Lakewood, Colo., office Tuesday that he still feels the industry will log a strong season if there is snow throughout the country.
“If we have good snow, history tells us people will ski,” he said.
A Boulder firm called RRC Associates prepared a special report for the NSAA that plotted consumer confidence, snowfall and skier visits from 1978-79 through last winter. The ski industry had record levels of business, for the time, during the 1981-82 recession and last year even as consumer confidence started sagging.
Berry consistently preaches that good snowfall will bring out the skiers. Perry and Tomcich agreed. They anticipate a “snow push” – or uptick in reservations once the snow starts falling.
And if keeps falling, the season will be respectable, they claimed. “Every single time, a big snow year trumps economy,” Perry said.
For The Aspen Times’ version of this story, click here.