LIANE HANSEN, host:
Winter storms covered many parts of the nation with snow over the past week. For holiday travelers, it's been difficult. For the ski industry, however, the more snow, the merrier. Several resorts that struggled through dry holiday seasons before have opened all of their trails. But fresh powder may not be enough to lure skiers to the slopes during this economic down-slide. Will Marks tracks ski resorts for JMP Securities. He's on the phone to explain. Welcome to the program, Will.
Mr. WILL MARKS (Senior Analyst, JMP Securities): Thank you, Liane.
HANSEN: So how are the economic conditions affecting the ski industry?
Mr. MARKS: Well, it's a little bit early to tell, but Vail Resorts, which owns five resorts at Vail, Beaver Creek, Keystone Breckenridge and Heavenly, they reported in early December that their bookings - that their hotels were down 23 percent. At the same time, their season pass sales were up almost 30 percent in revenues, and a lot of that was sold by Labor Day, and so as we know, the real effects of the economy have been in the last couple of months. So the expectations are not great for this year.
HANSEN: Are the resorts doing anything to lure the skiers to kind of spring for those expensive lift tickets?
Mr. MARKS: Well, season pass sales were not - the pricing was not down. In fact, it was up in many cases, flat in others. We didn't see any real decreases. At this point, what we are seeing is hotels offering one night free if you stay three nights, and a little bit of discounting in rates.
HANSEN: Have you heard anything about how the industry might be preparing itself? I mean, they have all the powder that they need, they're ready to go, but you said they're still not sure the skiers are going to show up. Are there things they can do to kind of prevent sinking, in other words?
Mr. MARKS: Sure. And as you said, the first obstacle's been overcome. There is snow, and that's always a concern early in the year, in November and early December, but we have that now. Most resorts are making some sort of labor cuts. Either fewer people coming to run the lifts, perhaps not providing as much in benefits to employees, they'll all get their season passes, but maybe fewer free lunches. It is difficult, though, to cut back. These resorts are trying to provide a luxurious experience for the customer, and so they don't want to change that based on one season, let's hope one season.
HANSEN: You mentioned Vale, Colorado. Are there some resorts that may have a harder time than others? In other words, maybe, you know, ones in the White Mountains not do as well as those in Wyoming, for example?
Mr. MARKS: Sure. I think there are two ways to differentiate the good and the bad this year. And the first is, some resorts have borrowed a lot of money. And as with any industry, puts you in a bind right now. The second area where companies could be hurt if they are a pure focused on destination. So you can divide ski resorts into local traffic and destination traffic. And I believe that those resorts that have purely the drive-to locals, a lot of the Lake Tahoe resorts, many of the East Coast resorts, will do OK this year, whereas those that rely on fly-to, whether it's certain Utah resorts or Colorado resorts, are going to struggle more.
HANSEN: Do you have any idea how the overseas ski resorts are doing?
Mr. MARKS: Well, the last couple of years, the American resorts have benefited from the weak dollar. And it's really led to a surge, in many cases, 20 percent a year increases in foreign travel to U.S. ski resorts. And now, with the strengthening dollar and weaker economies overseas, I think you're going to see fewer people coming here from overseas - that wasn't your question - Americans going abroad. While it's a little bit more appealing for Americans going over there because of the strengthening dollar, the economy will, I think, prevent any large influx over there from American visitors, considering the situation.
HANSEN: Will Marks is a ski industry analyst with JMP Securities, he joined us by phone from San Francisco. Will, thanks a lot. Happy New Year.
Mr. MARKS: Happy New Year to you. Thank you, Liane.
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