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A Six-year Loss of 1.23 million Skiers Threatens Colorado's Signature Industry
By Jason Blevins, The Denver Post
Knight Ridder/Tribune Business News 

Dec. 14, 203 - Vacationers, the foundation of the Colorado ski industry, are melting away like spring snow under a broiling sun, as increasing numbers of tourists forsake the state's slopes and ski elsewhere. 

A six-year loss of 1.23 million foreign and out-of-state skiers is threatening the state's signature industry, which is the biggest contributor to the already beleaguered tourism industry. 

A closely guarded industry report obtained by The Denver Post details the decline in deep-pocket wintertime visitors to Colorado. The losses come as visits to ski resorts across North America are at record levels. 

State leaders fear the trend could weaken resorts and the thousands of business owners flanking the ski hills. Like a barreling avalanche, the impact could possibly tumble down from the mountains. 

"Travel and tourism is the second-largest sector in the state's economy, and this trend is alarming in terms of the future of this state," said state Treasurer Mike Coffman. "Once you start a downhill slide, it takes a lot of effort to reverse the perception that comes with that slide." 

Long the snowy Valhalla of powdery play, Colorado has caught an edge and is tumbling. 

Out-of-state skiers like Gary Butler are heading in other directions. Butler will ski Big Sky, Mont., this season. And he's bringing 390 Texans with him. 

His take on Colorado: "Been there, done that." 

"I think some Texans are wanting to see someplace new," says Butler, the Houston-based president of the Texas Ski Council, an umbrella group for 16 ski clubs in the Lone Star State. "We're kind of feeling burned-out on Colorado." 

Colorado once captured 22.6 percent of all U.S. skiers. Last season it only got 20.1 percent, the lowest level in 14 years, according to a report issued by Boulder research firm RRC Associates. 

The industry trade group, Colorado Ski Country, commissioned the report last spring to take a closer look at what it perceived as a drop in out-of-state visitors. While the report makes no recommendations, it has provided resort executives with the information they wanted to create a turnaround strategy. The report, completed in June, is circulating only among a tight circle for competitive reasons. 

Meanwhile, as Colorado's destination skier visits slipped, visits to Canada and Utah were up. 

But Colorado's corporate resorts, pining for more vacationers, have leaned heavily on frugal day-trippers with discount passes clipped to their Gore-Tex. Although hordes of day skiers from the Front Range have swarmed the Interstate 70 corridor over the past five years, they have not fully stemmed the loss of destination spending. 

"I think the bloom came off the rose in Colorado because we got complacent," says David Perry, chief operating officer for Aspen Skiing Co.'s four ski areas. "The second homes were growing, the visitors were more and more affluent. We kept charging more. It was like we never thought it would stop. Collectively, we were all guilty in Colorado of losing sight of what built our success: being creative and being innovative." 

Blunt realization of the first sustained decline in Colorado skiing history now has resort executives as focused as Olympic medalist Bode Miller carving a Super G. 

The prime directive to Rob Perlman, president of Colorado Ski Country, is to return the state to its preeminent place among destination skiers. 

"It's my mission in life," he says. 

Colorado still gets more skier visits than any other state. Nowhere else in the country even comes close to the number and variety of its resorts. 

But something isn't working for the state's once mighty ski industry, which has struggled to match its performance of the 1996-97 and 1997-98 seasons. 

Resort leaders have plenty of excuses. First, those seasons were "high-water marks when all the stars aligned," Perlman says. 

Christmas and New Year's holidays fell midweek for both extraordinarily snowy seasons, making for longer vacations. Easter break came early, bringing more skiers. Vail offered $10 ski days in May 1998. Resorts opened early and closed late. 

Then came five seasons of struggle, all highlighted by paltry to average snowfall. 

The Y2K scare kept vacationers close to home. The Sept. 11, 2001, terror attacks leveled the country's tourism industry and crippled airlines. A national recession tightened skier budgets. 

When American troops entered Iraq in March 2003, activity at resorts plummeted, and a record start to the season melted away. 

All the while, the value of the dollar remained strong, making Colorado expensive for international visitors. 

Industry leaders say the uncontrollable forces knocked the wind out of Colorado's ski industry. Out-of-state visits fell from 7.06 million in 1996-97 to 6.03 million last season. International visits fell from 954,949 to 749,715. 

Colorado's decline follows unprecedented investment by resorts. In the last decade, resorts poured more than $1 billion into on-mountain improvements, including state-of-the-art snowmaking systems. Almost $600 million of that came between 1996 and 1999 and went into new lifts, terrain expansions and mountaintop lodges. 

But ski resorts outside Colorado are flourishing. Skier visits nationally climbed to an all-time high of 57.6 million last season, besting pessimistic forecasts that weighed the impact of a softening economy and a nation at war. 

"There is definitely a national trend upward," says Michael Berry, president of Lakewood's National Ski Areas Association. "Right now we are seeing vitality at entry-level ski areas and, ultimately, that will translate into more business for the destination resorts. These are positive times for the industry." 

While Colorado resorts have struggled, Canada and Utah are enjoying a snowy soiree. 

Utah resorts are relishing a 12 percent increase in destination business since 1999. 

Canada's resorts logged 18.86 million skier visits last season, mirroring its record seasons of 2000-01 and 2001-02. 

Canada has become an increasingly popular destination for American skiers, especially with its dollar providing an almost two-for-one bang for a buck. In 1996-97, Canada's ski areas logged 860,000 American skier visits. Last season, they saw 1.95 million, a 127 percent increase. 

"Since 1996, most of our growth has come from the U.S.," said Colin Chedore, executive director of the Canadian Ski Council. "The dollar has been the major reason." 

Skiers in Colorado's core markets of Texas, Florida, Illinois, California and New York are not coming like they once did, with visits from each state declining between 7.5 percent and 21.5 percent in the last seven seasons. 

"It isn't that we are avoiding Colorado, it's just that our opportunities have broadened," says Sandy Ellison, marketing chief for the Texas Ski Council. 

The same story holds for Colorado's core international markets, with visits from Latin America, Australia and Europe down anywhere from 24 percent to more than 50 percent. 

Demographic factors such as aging baby boomers are also cited as playing a part in Colorado's downturn. The allure of cruise ships, beaches, Costa Rican sea kayaks and lush golf courses is wooing aging skiers away from an industry they created 30 years ago. 

In response, Colorado resorts, as well as resorts nationally, are focusing intently on younger skiers. Terrain parks are everywhere. Formerly family-oriented ski areas, such as Keystone and Buttermilk, now thump with rail-sliding riders jibbing to blaring slopeside music. 

That shift from promises of fireside cognacs to snowy raves may be contributing to boomers shelving their boards for good. 

"Pushing the older skier out, or allowing them to take themselves out too quickly, I think is a real mistake," said Trygve Myhren, a 66-year-old Denver skier who has watched "dozens" of his ski buddies quit the sport. 

"I understand the need to get the younger people, but that doesn't mean you should lose your appeal to those people who tend to spend more money." 

Front Range skiers with season passes priced circa 1975 have bouyed Colorado's ski numbers since 1998, particularly resorts flanking Interstate 70. In 1996-97, those skiers logged 2.2 million days. Last season, they delivered a record 3.1 million visits. 

Colorado locals now make up more than 40 percent of the state's skier visits. Destination skiers, who accounted for nearly 70 percent of visits in the mid-1990s, now make up less than 60 percent. 

While the timing appears fortuitous, the decision to sell season passes for $200 to $300 and turbo-charge the market was mostly a competitive one by the big publicly traded companies Vail Resorts and Intrawest. 

"We really did find, perhaps, a sweet spot between price and utilization," says Vail Resorts chief operating officer Bill Jensen. "It has far exceeded our expectations. Now in hindsight, if we hadn't done it, we would have been forced to do something like it later." 

Front Range destination resorts such as Vail, Copper, Breckenridge and Winter Park logged a second- best 7.23 million skier visits last season, thanks largely to urban day-trippers. 

But visits to the state's outlying resorts, such as Steamboat, Crested Butte, Telluride and Aspen, fell to 3.77 million last year, down 14.5 percent from the high of 1997-98. And since the 1998-99 ski season, Crested Butte's sales tax revenues are off 12.6 percent, Telluride's are down 5.5 percent, and Aspen's are down 5.2 percent, according to research by The Post. 

The deluge of discount passes also has hobbled the net income Colorado resorts have gleaned from ticket sales. They've sold so many discount passes that Colorado's ticket yield -- the amount of money earned from a lift ticket -- has dropped to 49.3 percent, the lowest in the nation. 

But skiers who live in the corridor from Fort Collins to Colorado Springs have helped by spending more time and money in resort towns. Their overnight visits reached 1.18 million last season, a 47.7 percent gain from 1997-98. 

"I always rent a room. Always," says Larry Anderson, 54, of Colorado Springs as he gobbles steaming chili on a slopeside deck at Breckenridge. "Trying to do all this and then driving back, man, it's just wear and tear on the body. I'm not into that kind of stress. Skiing isn't supposed to be about stress." 

As the point man for the turnaround effort, Perlman packs solid credentials. 

Colorado Ski Country lured the born-and-bred Coloradan from a top marketing post at California's Mammoth ski area last year. His strategy: narrow Ski Country's shotgun marketing approach to focus campaigns in the state's core but dwindling markets. 

So far, he's put 24-page Colorado skiing inserts in every Ski and Skiing magazine sold in Texas, Illinois, Florida, New York and California. 

As a member of the Colorado Tourism Office board, he has helped sway the state to support its first wintertime marketing campaign in more than a decade. 

"We are going narrower, not bigger. We are concentrating our efforts on the existing skiers and snowboarders," says Perlman, an expert skier who can work an urban boardroom or a slopeside disco with equal verve. "We've narrowed our focus to make this the most important issue we face." 

Resort towns across the state also have launched efforts to lure destination travelers. Businesses surrounding Aspen are united in a first-ever marketing push. Voters in Crested Butte and Telluride approved tax hikes to fund marketing programs and bring consistent air traffic into local airports. 

"Next year? Now is next year. It's got to happen now," says John Norton, CEO of Crested Butte ski area. 

"If it doesn't come back, you will see businesses in the community closing up. You will see vacant storefronts. You will see a portion on the local population pack up and leave." 

-----To see more of The Denver Post, or to subscribe to the newspaper, go to 

(c) 2003, The Denver Post. Distributed by Knight Ridder/Tribune Business News. MTN, IDR, 


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