Vail, CO, Aug. 3–After three straight years of declining snowfall and reduced skier visits, many ski resorts are exploring the idea of purchasing reduced skier-day insurance policies.
“Based on the response that we’ve had so far this year, I would say that the number of ski areas with this type of policy will grow,” said Joe McNasby, president of MDM Group, which insured 18 ski resorts last season with a reduced revenue policy.
This past ski season Vail Resorts collected $10.6 million from a reduced skier-day insurance policy purchased through the MDM Group of Steamboat Springs, CO.
“It was something that we had looked at before and decided not to do,” said Vail Resorts spokesman Paul Witt, “but after a couple down seasons we looked at it again and decided that this year it made a little more sense than in previous years to get a policy.
Other ski resorts also collected on their policies, including publicly and privately owned resorts across the country, including a number of resorts in New England and Northern California. However, McNasby is quick to say that the policy is not a no-snow safety net, but rather a type of all-risk policy, similar to other types of tourist-based operation such as the cruise industry and Disneyland.
“This insurance policy goes beyond weather,” McNasby said.
“It is a catastrophic type coverage, not a budget shortfall.” Vail Resorts claimed that Y2K and a President’s Day airline strike where contributing factors toward making a claim, one that McNasby agreed with.
“That was very much a major impact,” McNasby said. With impacts beyond the ski industries’ control, McNasby predicts that more resorts will investigate such insurance policies to underwrite their bottom line.
“This is going to become part of a risk management program for many resorts,” he said. “It’s a safety net, especially if they are a publicly held company.”