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February 20, 2012 E-MAIL PRINT

What's on the horizon?

As the industry evolves, we take an in-depth look at the future of New England skiing

by Brion O'Connor/

It’s a time-honored tradition here in the Northeast. Every fall (or late summer), New England ski areas trot out their list of improvements, which skiers, boarders and winter sports media types gobble up in anticipation of another great season on the slopes.

Of course, there was a time when just the thought of snow was enough to trigger a serious Pavlovian reaction among diehard New England skiers. Sport shops would prepare for the onslaught of ski-tuning requests and retailers would stock up on winter apparel. It was a similar passion for the sport that drove the country’s ski pioneers to build the resorts we’re so familiar with today.

But, like New England weather, the only constant in the ski industry is change. It is an industry that has witnessed a compressed evolution over the past 60 years — with countless highs and lows — that rivals our famously unpredictable forecasts. Most existing ski areas have had to adapt, making alterations and improvements to make sure they could remain not only viable but also essential. Which leaves us wondering: “What’s on the horizon?”

In the early days, skiing was winter’s version of “the Wild, Wild West,” says Chris Ellms, director of ski operations at Bretton Woods. The sport was fueled by visionaries who, coupled with enormous personalities and sometimes even bigger egos, reconfigured the New England landscape to include ski slopes and lodges. That blueprint underwent a startling transformation in the 1970s and ’80s, when ski areas went corporate and large conglomerates eyed a ripe real estate market for big profits.

“Skiers are obviously pretty passionate people, and they want to see an owner who is invested,” said Burke Mountain vice president and general manager Tim McGuire. “Or maybe not even an owner. Skiers want to see that the people who are running the resort are heavily vested in the resort, people who are probably skiers themselves who really get it and understand the business.

“Back in the ’80s and early ’90s, when the conglomeration took place, a lot of places lost that. They lost their touch with their customer. It’s definitely a passionate sport where people care about the area, and they want the people who are running the resort to share that same passion.”

Les Otten was one of those passionate skiers. But he is also the man who many associate with the consolidation of the sport in New England, as he took a tiny ski area in western Maine — Sunday River — and made it the centerpiece of his short-lived empire, the American Skiing Company. 

“It’s hard to imagine a place that’s doing 30,000 or 40,000 skier visits, and thinking they could somehow overcome the environmental, logistical, political, governmental hurdles that it would be to get a place to go from small to big” like Sunday River did, Otten said. “It’s more likely that there will be further consolidation, and that some of the big ski areas that have been dormant or sleepy the last several decades will have a re-awakening with the right leadership, the right management, the right vision and the right marketing.”

What will it take for that renaissance to happen?

Here’s a laundry list:

Larger-than-life owners

Otten, who is still an avid skier but no longer affiliated with any resort, says the time is ripe for a return of big personalities to skiing.

“When I look back, I see people who I thought as either the Johnny Appleseeds or Pied Pipers or P.T. Barnums. They had this magical connection to the sport, and this vision that was infectious,” Otten said. “If you look out at western Colorado, it was Darcy Brown at Vail. It was Preston Smith at Killington. It was Walter Schoenknecht at Mount Snow, Tommy Corcoran at Waterville Valley. These guys were my heroes. Those were the guys who would look at a piece of dirt and say, ‘Close the hatches, and load the torpedoes, we’re building a gondola’ or ‘We’re building a hotel.’

“Now that these businesses are owned by real estate investment trusts and are leased to operating companies in many places, or are owned by national corporations that have interests in multiple states, that sort of entrepreneurial spirit of a man and a mountain is gone,” he said. “You need a Dave McCoy at Mammoth Mountain, an Alan Fletcher at Nashoba Valley, John Christie at Saddleback, or Amos Winter at Sugarloaf. These were people who looked at these pieces of dirt and said, ‘I can make that into something.’ These guys could design a trail in their sleep; they could tell you how many gallons of water would flow through a pipe; they knew how to put a piece of steel up in the air, and knew how to market and sell to their consumers.”

Otten acknowledges the irony in his statement, knowing he was the face of corporate takeover in the industry. But he has no misgivings about his “Back to the Future” scenario.

“If you want this industry to flourish, you’ve got to have these larger-than-life characters who people can identify with, who has the passion, who is in the lift line at 10 minutes of 8 in the morning with the customer, who is out to see if the snow is good enough to ski on, who has an economic interest in the outcome, who all the employees look to as their leader, and who all the skiers look to as the person with the vision. That happened time and time again in New England in the ’60s and ’70s and ’80s, but now it’s basically vanished, through all this consolidation.”

However, Ellms says the industry still attracts forward-thinking people, such as Brian Fairbank of Jiminy Peak and Cranmore, and the Kircher family that built the Midwest giant Boyne Resorts (which now operates Loon, Sugarloaf and Sunday River).

“As any industry matures, you see the complexion change,” Ellms said. “Now that things have matured, and the expansion potential isn’t as obvious and numerous, of course you’re going to get that consolidation.

“But I don’t think we have to worry about losing the soul or the spirit of skiing,” he said. “Those personalities are still out there, albeit they may be under a corporate umbrella. Certainly, there are people pushing the boundaries, with great ideas and being innovative.

“It’s the next generation. But that’s the beauty of some of these ski resorts. They might be owned by the same folks, or operated by the same folks, but each one has its own personality.”

Existing terrain

Of course, it’s hard not to look at some mountains and think, “Wow, if they could only add a trail or two over here, or maybe some glades.” General managers do the same thing all the time. Almost every ski resort in New England has a master plan, with an eye toward trail improvement and expansion, under the right conditions. But looks can be deceiving. Many New England resorts don’t have vast tracts of untapped terrain.

“Most ski areas have exhausted the majority of their terrain and lift- and ski-centic stuff,” McGuire said. “It’s very difficult to build a new trail, because either it’s already been developed, or if it hasn’t been developed yet, the regulations to develop something different and new are going to make it very, very difficult.”

Those “regulations,” whether federal, state, or local, can present a discouraging set of obstacles for expansion plans. As long as there are competing interests for wide-open spaces, there’s bound to be conflict. On the ski/snowboard front, those battles are often waged in the environmental arena. Loon’s South Mountain is the prime New England illustration, where opponents were able to paralyze the project for years on end by implementing legal delays (the fact that these were second- and third-growth forests to begin with is a story for another day).

Still, regulations notwithstanding, resort managers continue to put together “wish lists” as part of their master plans. At Bretton Woods, which already claims more skiable acreage than any New Hampshire resort, Ellms is excited about the glade skiing potential of Mount Stickney.

“My dream is to expand the glades and put in a small surface lift for a throwback experience over there that will allow people to cycle in those glades,” he said. “It’s a beautiful section of the mountain. The glades go anywhere from double black diamonds to green circles.

“When that happens, I can’t tell you. But at least we’ve got the trails cut, we’ve got the area scoped out and laid out.”

Similarly, at Waterville Valley, Fries says, the Forest Service currently is collecting public input on the resort’s plan to expand onto Green Peak, to the east of Tecumseh.

“We hope to have it approved within a year, and that would add a new peak, a new high-speed lift, and about eight new trails,” Fries said. “That’s just the tip of the iceberg. We have plans that go way beyond that.”

And the very fact that they’re talking about it is an encouraging sign. Both Fries and McGuire said the National Forest Service procedures have been streamlined to help bring these plans to fruition, though McGuire added that “local regulations have started to catch up with the national ones,” meaning there are extra layers of bureaucracy to deal with.

Available capital

Still, every expansion requires money, and that’s getting harder and harder to come by following the economic downturn of the past three years. Not that it was ever “easy.” Even “success” stories such as Otten’s had peaks and valleys.

“We didn’t go from having 30,000 skier visits to 580,000 skier visits by not paying attention to the bottom line at Sunday River, but we had a way of weighting the passion ahead of perhaps the short-term financial constraints or short-term financial decisions,” Otten said. “When we made a decision, it was made by the guy who had to execute the plan, and who took the responsibility for it, and who was willing to go broke.

“One of the things that no one ever writes about is that we bought the ski area in 1980, but basically we were illiquid by the spring of 1981,” he said. “That happened about three times during my tenure, when you went from boom to bust, because you got beat down by the short-term economics of the real estate market or the weather. You had to look at a 10-year horizon of value to build something. You couldn’t look at a 12- or 24- or 36-month horizon. It just doesn’t work in the ski industry, due to the nature of the weather, the real estate, the economy, all those things coming together.

“But if you look at the long-term gain, and you have the ability to withstand the short-term setbacks, you can succeed.”

Sunday River’s growth, even by ski area standards, was startling. These days, most managers have to abide by the way of the tortoise, and take it “slow and steady.”

“Going forward, all areas are facing the same thing: ‘How to continue to grow and develop a quality product, and pay for it,’” Jay Peak president and co-owner Bill Stenger said. “And the key is affordable capital.”

Stenger has been raising money since 1997 through the innovative EB-5 program that allows for immigrant investments in regions with high unemployment rates. And that capital has allowed Jay, once the model of a rugged “skier’s mountain,” to become a shining example of another important element of change: diversification.

“We understand what our ski product is,” he said. “We’ve got an incredible mountain with amazing diversity, a wonderful glade system. We know what our skiers want, and we’re never going to ignore or de-emphasize the ski product at Jay. But in order to financially survive, keep our employees working year round, grow the facility, and contribute to our community in a meaningful way, you’ve got to have a year-round business.”

Diversification

Jay is a prime example of a ski area looking outside the box to develop more opportunities both in-season and out-of-season, but there are plenty of others. Loon, Sugarloaf, Sunday River, Nashoba Valley, Killington, Smuggler’s Notch, Jiminy Peak, Cranmore, Attitash, Okemo, Bretton Woods, Burke, and Mount Snow — to name just a handful — all have invested extensively in four-season amenities and activities.

“We’ve raised about $200 million for Jay Peak’s development,” says Stenger, who has been at Jay for 27 years. “We’ve built two hotels, a conference center, a 60,000 square-foot indoor water park, and ice arena, golf course, a golf clubhouse. And all of these things are designed to make us weatherproof, and truly year-round, because you can’t sustain your operations in a quality manner anymore without having four-season income.

“It’s just too much of a roll of the dice to hope that in four months of a ski operation you can take care of your bills, pay your staff, offer a great product, be contemporary, and build for the future,” Stenger said. “You just can’t do it, unless you have absolutely no debt. And there are few areas that have no debt.”

Other areas have expanded with the addition of mountain bike and hiking trails, mountain coasters, water slides, canopy tours and zip-lines. Real estate is still a viable option for some resorts, although managers are taking a cautious approach, given today’s economic realities.

“It’ll be interesting to see what the real estate markets at resorts do in the future,” McGuire said. “The whole real estate industry is in a very unknown state. No ski area has really released a project. We’re releasing a project (Camber Heights), and Sugarbush is releasing a project now. There’s always going to be a market there for real estate, but it will be interesting to see how or if that changes." 

Know your niche

On the other hand, if you’ve already got a winning formula, there’s nothing wrong with standing pat.

“The business model format for Mad River Glen is definitely a niche market,” president Jamey Wimble said. “I certainly don’t see all the ski areas going in that direction. I think, from what the public wants out there, there’s definitely still a need for the larger resort, with real estate on the mountain and ‘theme parks.’ It will be very interesting to see how things go in the future for Jay Peak. They definitely took a big swing at the plate.”

But for Mad River, and other “day resorts” such as Wildcat or even a Black Mountain in Jackson, the fact that they’ve remained essentially unchanged is their own draw.

“About 65 percent of our total skier visits are from season pass holders, so we definitely have a very strong core group,” Wimble said. “That’s probably one of the only reasons why the co-op format has worked here at Mad River, because there is a very strong following. We know we have our loyal customers that will always be back.

“But, then again, we do tap into that niche market, people who just want good old-fashioned New England skiing. It really hasn’t changed much here. There are very few places now where you can go and find the narrow, twisty trails with moguls.” 

Advances in technology

Mother Nature has turned a benevolent eye toward the region for the past two ski seasons. But each year brings a new forecast.

“Look at this year,” McGuire said. “The areas with the big snowmaking systems, the Loons and the Okemos and the Killingtons, they’re the ones that have the most terrain open.

“For everyone who forgot, with the past few good years, how important snowmaking is, this year has definitely brought it back into their forefront. I’d expect a lot of people will be looking at their snowmaking systems this offseason.”

New snowmaking equipment means more investiment, but the good news is that the product has improved exponentially. Even in the past 10 years, snowmaking guns have become 10 times more efficient, leading to tremendous cost savings, McGuire says.

Resorts also are looking at alternative energy supplies, from wind turbines (from large, such as Jiminy Peak, to the medium-size tower at Burke, to individual turbines mounted atop lift towers) to solar.

There also have been radical developments in the on-snow gear that has made the sport more appealing to a wider array of potential visitors. Waterville’s Tom Gross says Jake Carpenter’s snowboard was the single most influential change in the industry in the past 50 years.

The shaped ski is another example. Otten says he and his Sunday River staff jumped on the “shaped-ski bandwagon” when they ordered 10,000 pair from Rossignol in the mid-1990s.

“We caught (grief) from everybody,” Otten said. “Every ski teacher in the world said we were taking short-cutting, that we were ruining people, we were turning them into lousy skiers, that they’d never learn how to really supposed to turn skis. But we did it anyway.

“The turning point came one day when (Bruce) ‘Boogie’ Cole, who was the most respected freeskier in the Sunday River ski school, put a pair on and came barreling down South Ridge, which was the beginner area. He got within a 100 yards of the bottom of the hill, and basically laid over on those SCX skis and carved around a 360-degree turn. The entire ski school under the age of 35 went (crazy).”

So what’s next? Waterville’s Bob Fries just laughs, saying if he knew, he wouldn’t tell anyone before he got the patent on it. But Burke’s McGuire says the product is here now.

“If you ask any retailer right now what’s the hottest stuff, it’s the backcountry stuff,” McGuire said. “The skins, and really super fat skis. You see areas like Sugarloaf that are opening acres of backcountry terrain. Jay and Mad River built their whole thing on the backcountry and simplicity and do it on your own.

“That market is going to continue to grow. It’s really fun. If we were out West, it would be even bigger. But even here in the Northeast, we see people asking if they can skin up the hill during off hours, and how they go about doing it. That’s something resorts didn’t even talk about five years ago.”

Washington, D.C.

Hardly a hotbed for skiers and boarders (remember the hue and cry last winter when the District of Columbia got hit with a few hefty snowstorms?), our nation’s capital holds a major key in any development in resort country.

According to Stenger, the ski industry thrived on the real estate boom of the 1970s and ’80s.

“Second home growth and bed-based development was very, very brisk in a lot of places because of the tax regulations that allowed second homes, and indeed multiple second homes, to be owned by people and benefit from substantial tax incentives,” Stenger said.

“That all changed in 1989, when the multiple investment opportunities changed to singular,” he continued. “You can still own a second home, and you can still benefit from some tax considerations, but it’s much more restrictive than it used to be.”

However, with a single penstroke, Uncle Sam could open up that market again by allowing owners of second homes to get significant tax breaks on those properties. The idea obviously would be a difficult sell these days, given a national debt that is measured in the trillions of dollars, but such a move also could serve to generate development. Call it Obama’s Ski Stimulus Package.

But the reality is, ski resorts aren’t limited simply by the whims of Mother Nature. In short, there are other factors at play, “very significant factors,” McGuire said.

And maybe, just maybe, it will take just a handful of folks to leverage those factors.

“A man with an idea and a passion can overcome whatever odds are in front of him,” Otten said. “That’s the spirit of America, and it’s the spirit of the industry. If the industry can return to finding a couple of those people, who will take leadership roles — and maybe they’re already there — the industry still has great growth potential.”

This article originally appeared in the February 2012 issue of New England Ski Journal.

Brion O’Connor can be reached at feedback@skijournal.com