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Mixed Projections on the Future of Mountain Travel

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Vail, Colo., April 9. 2008

—The topics ranged from the economy to immigration to technology to consumer power in a panel discussion of travel industry veterans during a general session at the Mountain Travel Symposium today at the Vail Cascade Resort & Spa in Vail.  Nationally known travel researcher and author Peter Yesawich, Ph.D and Philip Wolf, founder and CEO of PhoCusWright, an organization specializing in emerging travel technology, were joined by ski industry veterans Chris Jarnot, senior vice president and chief operating officer for Vail Mountain; Myles Rademan, public affairs officer for the town of Park City, Utah; and Bob King, senior vice president of marketing and sales for Intrawest-North America.  

According to Yesawich’s most recent research, 16 percent of American families are planning fewer trips for 2008 and for the first time in a decade, the economy is the primary reason for the cutback—replacing ‘lack of time’ as the reason for reduced leisure travel.  His research further indicated that eight percent of households still planning to travel, expect to scale back.  

“What is changing are the choices they are making,” explained Yesawich.  “For the first time, there is pricing transparency because of the internet and the ability to compare prices at different resorts side by side.”  He cautioned the audience of several hundred marketing professionals and tour operators from around the U.S. and the world that consumers would be looking for better value not necessarily lower prices.

Jarnot emphasized the quality of the vacation experience as a priority.  “The better we can make the experience, the more consumers are willing to pay,” he explained.  “I don’t see us [Vail] lowering prices but focusing on improving the experience.”

King echoed Jarnot’s comments saying “you can’t fall into that slippery slope of eroding price because of the economy.”  Like Jarnot, King indicated that visitors will continue to visit Intrawest resorts and “pay for the exceptional experience that we deliver.”

The role of technology and international visitors was also discussed as an antidote to the slowing U.S. economy.  “Just because the pie is shrinking doesn’t mean your piece of the pie needs to shrink,” said Wolf.  A weak dollar makes the U.S. mountain resorts a more attractive destination because of the favorable exchange rates for many international currencies.  

As a publicly traded company, Jarnot couldn’t reveal any current figures but did report that international visits were up 23 percent across the Vail Resorts through January.

The economy wasn’t the only issue raised.  According to another panelist, the declining number of visas available for international workers combined with their long commutes, rising gas prices, and low wages for many front-line resort workers is likely to have an impact on resorts hoping to ramp up their guest services as they face a potentially shrinking pool of workers.

Rademan challenged the audience by asking “who is delivering that exceptional experience to guests?”  He received a round of applause in response to his passionate comments about the labor situation.  “We need to get more involved in immigration because these workers are the ones who are ‘overdelivering’ on our promises,” insisted Rademan, making a reference to an earlier presenter, Rick Barrera, who spoke on “Overpromise and Overdeliver.”  “The front-line workers are feeling this recession in a big way with their long commutes and high gas prices, and we [mountain communities] have to align with people we don’t usually talk to.”  Rademan’s concern was illustrated when Jarnot acknowledged that Vail Resort had closed several chairlifts and on-mountain restaurants citing insufficient staffing as a major consideration in this week’s cloosures.

The messages were mostly optimistic though as most resorts in the U.S. and Canada had exceptional snow conditions this year.  Although destination business measured by occupancy rates is down two percent as of March 31, revenue is up approximately 10 percent according to data reported by the Mountain Travel Research Program (MTRiP).  The consensus of the panel was that the ski industry isn’t exempt from the impacts of a recession but is relatively well-insulated because of the typically higher economic status of many skiers and snowboarders. Yesawich also reminded the audience that in the coming years an estimated $41 trillion will be inherited by baby boomers and much of that is money expected to wind up in resort real estate—including mountain resorts.  “I think the ski industry is incredibly well-positioned after we get through this current soft spot in the economy,” concluded Yesawich.