Small Ski Areas Scramble to Survive : Economy: Northeast is hardest hit. The total number of resorts in nation falls from 674 in the 1986-87 season to 569 at the end of last season.
Brand-new condominiums line the mountainside on the road climbing out of town. They almost seem out of place against the backdrop of the village crossroads, the white church steeple piercing the sky, the weathered gray country store, the tiny wood-frame post office.
But for people in this town, those condos are right where they belong. They’re part of the economic lifeblood for Burke, a small mountain town that relies on the ski industry for jobs and tax revenue.
It’s an economy built on a fragile foundation, though, and Burke is one of the lucky ones. This mid-sized resort on the New Hampshire border survived both the real estate bust and a bankruptcy filing that could have shut it down two years ago.
Today it still operates under the careful eye of general manager Dixi Nohl and new owners Karin and Bernd Schaefers, New Jersey residents who bought the resort last October when it appeared headed for bankruptcy again.
For others, the story hasn’t ended as happily.
Stiff competition and bad weather have conspired to close many smaller ski areas across the United States, particularly in the Northeast. The total number of resorts has fallen from 674 in the 1986-87 season to 569 at the end of last season. Although the number of Rocky Mountain resorts has slipped just 8% in that time, the number of Northeast areas has fallen 16%.
In Vermont alone, the number of areas has dropped from about 80 in the 1970s to less than 25 this year. Many of those areas were smaller slopes with a single chair or T-bar.
But the casualty list also includes such mid-sized areas as Ascutney and Magic Mountain. Brown stubble sticks up through the snow where big-spending skiers played last year.
Ill-timed housing developments, lack of snow or snow making and too little cash have teamed up against these areas, which are struggling to keep up with hefty debt or low cash flow while battling to attract more skiers with costly amenities, like hotels and snow making.
“It’s clear as a bell to us unless we get snow making we can’t survive, we can’t compete,” said Nohl of Burke. “The standards of what skiers expect is very different from what it used to be.” Snow surfaces have to be groomed “like a carpet. Lifts have to be new and fast. Unless you do it, (skiers are) not going to come.”
Expanding Burke’s snow making adequately will require $5 million to $8 million, Nohl said.
Also working against them is competition from huge, well-funded resorts such as Vermont’s Killington, New Hampshire’s Waterville Valley or Sunday River in Maine, whose advertising and staffs are considerably larger. So are their overall budgets for this capital-intensive industry.
“The snow-making costs are extraordinary. Lifts are incredibly expensive. And grooming vehicles are almost $200,000 apiece,” said William Stenger, general manager of Jay Peak in northern Vermont. “The little guy has a hard time keeping up with those kind of expenditures.”
The failure rate is alarming to some because the little, less expensive operations were feeders for the big resorts.
“What we’re beginning to lose are the areas that the less affluent can afford,” said I. William Berry, publisher of The Ski Industry Letter. “That’s a serious problem as far as the long-range future of the sport.”
The tough financing has meant hard choices for a number of areas. Some have sought refuge with larger neighbors, like Haystack Mountain in Wilmington, Vt. Its future was uncertain until Mount Snow--owned by the well-financed S-K-I Ltd.--took it over this season.
Magic and Bromley, two modest-sized resorts about 15 miles apart, appeared well on their way to a successful partnership under one owner. The two shared lift tickets and some marketing until the owners decided they couldn’t afford upkeep on both and shut down Magic.
There were plans to consolidate the struggling but respected Pico with the mammoth Killington, which is also owned by S-K-I. But problems arose getting permits for trails to connect the resorts. The merger was called off last year, leaving Pico’s future very much in doubt.
“The industry . . . overall has experienced in large part what a lot of other industries have gone through. There’s some consolidation taking place,” said Tim Beck, president of Snow Engineering in Littleton, N.H., a resort consultant.
Those who choose to go it alone are adjusting to another world, too, one that includes such concepts as strategic planning and niche marketing.
In short, running a ski area is no longer a fly-by-the-seat-of-the-pants operation for a bunch of ski bums. Like any other big business, it requires Madison Avenue savvy and Wall Street smarts.
“Labor of love won’t do it anymore,” said Nils Ericksen, founder of Ericksen Associates, a Shrewsbury, Vt., a resort design firm. “You have to operate it like a business.”
Some areas are marketing themselves as full-service resorts competing against the Vails or ocean cruises. Others aim their magazine ads and travel brochures at the family market. Smugglers’ Notch in Jeffersonville, Vt., heavily promotes its day care and ski school program, one of the few that agrees to put kids as young as 3 on skis.
Jay Peak vies for the Canadian market by offering deals on currency exchange rates. The resort also offers visits to a local dairy farm where city slickers can take a day off and watch a cow being milked.
There is little argument the industry is changing and more resorts will fail. But most also believe the future is relatively bright.
Dave Ingemie, United Ski Industries Assn. president, said the smartest areas are now preparing for the next frontier: exploiting the “baby boom echo,” offspring of 30- to 45-year-olds.
Children’s learn-to-ski schools already are bulging, and so are youth ski clubs.
“Watch out for the late ‘90s. That will be the most explosive teen boom in the United States,” Stenger predicted.
His optimism is matched by Nohl, despite the tough times at Burke. He believes the experiences of the past decade will serve as powerful lessons for this resort, just like its many other brushes with catastrophe.
“Burke has had a history of running into problems,” Nohl said with a shrug and a smile. Take the fiasco of 1978, for instance, when a new lodge was built at the mountain’s base. It stood empty for two years because no snow making was installed on the trails leading to it, and there was little natural snow for two seasons.
Nohl is convinced that the resort’s latest strategic plan goes a long way toward avoiding such mishaps in the future. But after working at five ski areas in his 32-year career, he sees little hope for some of the other struggling resorts.
“I think Burke is going to come out of it, provided the new owners are willing to put in the capital investment needed,” he said. “I think those ski areas that are now operating, they’ll continue to operate. Those ski areas that are closed probably will never open again.”
