Ski industry lines up for government bailout money, despite many cutting employees and few offering season pass compensation
For some it’s a legit ask, for others it’s just a cash grab
When the COVID-19 situation arrived on Colorado’s doorstep, the ski resorts were some of the first businesses to get the axe.
The State mandated that ski resorts shut down; and ski resorts decided, that it would be for the rest of the season. Powder junkies, snow fiends, park rats, groomer gremlins and every other breed of ski/board bum, who’d spent their hard-earned cash on a season ticket to ride, got a swift kick in the nuts.
According to Dave Byrd, the director of risk and regulatory affairs for the National Ski Areas Association (NSAA), the ski resort industry of America stands to suffer a $2 billion loss in the wake of this pandemic. Vail resorts alone projects that this season could cost them somewhere between $180-200 million.
“Ski areas did not dodge a bullet here,” he told he Colorado Sun in an interview.
And now, with the recently passed stimulus bill, America’s ski resort companies are lining up. They want their piece of that $2 trillion government pie — regardless of their net-worth or profit margins, how much they stand to lose or how they’ve treated their pass holders and employees during all this.
At the front of that line, are the corporate giants: Vail Resorts and Alterra Mountain Company. Their argument is exactly what you’d expect: their massive businesses are an essential pillar of the economy in rural mountain areas. They stimulate tourism, bringing in money and opportunity alike. They’re “too big to fail” (to use lingo from the last time our government bailed out their partners in crime).
And, maybe they are. Vail’s revenue before taxes last year was $707 million (though this year they’re looking at just $578 million, poor bastards). They’ve jacked day ticket prices to over $200 a pop, they charge out the wazoo for parking and essentially run a racket on ski/board lessons — charging as much as $1000 for a single 8-hour private (during which time, the instructor is making a whopping $12 an hour).
Upon the season’s cancellation, Vail and Alterra subsequently laid off or furloughed most of their on-mountain employees, killed their lifts, shut their doors and that was that. No refunds. Almost no effort to make amends or to even feign remorse for their customers. They simply closed everything and shrugged their shoulders.
It would be unfair to ignore, that both Alterra and Vail suspended rent requirements for employee housing — which is something. That saved all of those suddenly-jobless on-mountain people, from being evicted and put on the street. At least, for a while. Vail announced on March 18th that employees in their housing, had just 10 days to vacate the premises.
But not all in the ski resort industry were so shamelessly unapologetic. Many of the smaller ski areas in Colorado, resorts that don’t have the same financial leeway that Vail or Alterra does, are stepping up to actually protect their employees and compensate their customers. Smaller mountains like Loveland gave their employees 3+ weeks of pay, told 4-pack pass holders their passes would be good next season, and are currently working out a plan for their season pass holders.
According to Byrd with the NSAA, at least half of the ski resorts in the US are considered “small businesses” by the Small Business Association (specifically, any resort raking in less than $30 million annually). That is a lot of small mountain resorts, supporting a lot of small communities.
And truly, it’s these smaller resorts are the ones that stand to lose the most here. Without the corporate budget of a company like Vail, keeping a small mountain operation above water might be a challenge. March is one of the snowiest months of the year, and accounts for around 20% of visitation in most resorts. It’s spring break, after all, and places like Monarch, Ski Cooper, Wolf Creek, any individual mountain that’s not a tentacle of some corporate conglomerate, depends on that traffic and the income that comes with it.
So, it would be reasonable (and even noble) to bail those resorts out — to throw those smaller, more local, less affluent areas a lifeline. If they go under, the small towns that depend on them for tourism will wither as well. And the cultural loss of losing non-corporate mountains would be irreversibly tragic.
But those big resorts? The ones that belong to Vail and Alterra? They aren’t going to go under because their parent company lost several hundred million dollars. Maybe those big ski resorts won’t sell as many passes this year (and they won’t be able to justify those $200 day passes). Maybe their hotels won’t be packed to the brim (and they’ll have to charge marginally reasonable prices for those, too).
When all this picks up again, though, the big resort companies are going to be charging full steam ahead back to business. They’ll still need to hire locals, they’ll still be bringing in tourism for the local economy. Sure, maybe 2020/21 will be a slow season for places like Summit County, the Vail Valley, or the Roaring Fork Valley — but it will be temporary. Vail and Alterra will be right back to making $800+ million annually, within a few seasons. With or without government stimulus.
Do they really need a bailout? Or is this just an easy cash grab for these corporate conglomerates, just like the 2008 bailout of Wallstreet was for America’s banks? After all, this is essentially a duopoly we’re talking about, here. Maybe they deserve a little karmic pinch, for being so greedy for so long. Maybe they deserve to flounder without help from the Feds.
That’s an optimistic way of thinking, though. Realistically, if anyone in the ski industry gets bailout money, it’s going to be Vail and Alterra. They have real economic leverage — why wouldn’t they use it to get their hands on some of that sweet free government cash?
Such is the way of the world. C'est la vie — just let me ski.