From rope tows to high-rise hotels: A former Steamboat ski exec explains the transformation of the industry
STEAMBOAT SPRINGS — In the past decade, the ski industry has undergone a major transformation.
From the gargantuan consolidation of resorts to million-dollar investments meant to boost the guest experience, skiing and riding has morphed not only ski areas themselves, but the communities in which they operate.
Chris Diamond, a former longtime ski executive at resorts across the country, has seen these changes firsthand. He documented some of them in two books, the most recent of which, “Ski Inc. 2020” follows the advent of the Ikon and Epic passes, which he argues has disrupted longstanding power dynamics and altered the entire industry’s business model.
“The ski industry as we have known it, no longer exists,” he writes in the new book.
Diamond, a former president of Steamboat Ski & Resort Corp., joined two fellow leaders in the industry, current Ski Corp. President and Chief Operating Officer Rob Perlman and Andy Daly, former president of Vail Resorts, to discuss the book during a launch event Thursday, Dec. 5, at Off the Beaten Path.
Tom Ross, a columnist with the Steamboat Pilot & Today, wrote about the book following its release in October. He focused on the new business model of the Ikon and Epic passes, offered by Alterra Mountain Co. and Vail Resorts, respectively, and how the two companies are able to offer such a wide swath of options for the same or cheaper prices than a season pass at a single ski area.
On Thursday, Diamond and his fellow panelists delved deeper into the reason the new business model arose and how it could prove as the saving grace of a ski industry that has seen tumultuous drops in popularity.
“It has increased business pretty much everywhere,” Diamond said of the multi-resort passes.
To prove the point about the affordability and far-reaching popularity of the Ikon and Epic passses, Diamond recounted a gondola ride he took at Steamboat Resort last winter. Two raucous Australian men were in the same cabin. A stench of beer lingered on their breath.
Diamond’s ears perked upon hearing their accents. As one often does in close quarters with strangers, Diamond struck up conversation, asking the men where they usually ski.
“We ski everywhere,” one of the men replied.
To Diamond’s surprise, the men owned both the Ikon and Epic passes
“We ski year-round for less than we used to pay to ski at our local hill,” the man said.
Diamond scanned the crowd of people huddled into the bookstore, letting the words sink in before continuing.
“Isn’t that amazing?” he asked. “That’s change.”
Weatherproofing the business
The impetus for this change, according to Daly, was the 2008 recession. At the time, the ski industry suffered from the volatility of the quality of each winter. This, in a state that has seen snowpack decreasing since the 1950s, according to the Environmental Protection Agency, did not bode well for resort executives like Daly.
That same year, Vail Resort, of which he was president, unveiled the Epic Pass. The objective, he said, was to get more Denverites willing to drive to mountain towns.
“What we didn’t realize at the time was how attractive the Epic Pass was going to be for destination skiers,” Daly said.
The company did not make as much revenue in ticket sales, but it was able to expand its offerings to include lodging, restaurants and other amenities.
“It more than made up for losses of ticket revenue,” Daly said.
Suddenly, it was not so much about having quality skiing but offering guests a complete resort experience, one that encouraged them to stay longer and try out other resorts within the multi-mountain pass.
Perlman said the newer Ikon Pass, now in its second year, has brought similar business improvements as its Vail rival.
Alterra, which owns Steamboat Resort, sells about one-third of its Ikon passes in the spring, months before the next winter season, according to Perlman. The earlier people buy, the cheaper the pass. While the company does not make as much revenue per visit that way, it ensures income regardless of the quality of the upcoming winter.
“The Ikon weatherproofs the business,” Perlman said.
Such a business model necessitates balance, he added. The last day to purchase an Ikon is Dec. 12, in large part because the deal is so good, according to Perlman. Those who don’t buy in time are stuck with higher daily pass prices, which at Steamboat Resort rose to a record $199 last season.
Building the resort experience, for better or worse
This comes at a time when the industry has suffered from an aging problem, both in its infrastructure and clientele. Diamond is optimistic that such investments ultimately will rejuvenate the sport and beckon more people to become avid skiers and riders.
The numbers may agree with him.
About 59.3 million people visited ski areas last season, according to data from the National Ski Areas Association, a boon for an industry that had seen a steady decline in numbers since the 2010/11 season. Last year was fourth-busiest since 1978, which Perlman attributed mainly to excellent snow at resorts across the country.
But another component has been a focus on ramping up the amenities around the resort and collaborating with communities to improve the overall experience for guests.
“People don’t differentiate the resort from the airport or restaurants,” Perlman said. “It’s not one thing but the sum of all these things that drives the intent to return.”
For Steamboat, that has meant more luxury vacation rentals and condos, as well as businesses in town that serve a higher-class clientele. The resort also has added more on-mountain dining options, with sleigh-ride dinners and weekend fireworks shows.
Some longtime Routt County residents take issue with all those changes.
Bill Fetcher has multi-generational roots in the Yampa Valley. The Fetcher ranch in Clark used to be a local hub for backwoods skiing, a humble operation consisting of a rope tow installed on the hillside of a pasture, powered by a tractor. The family charged people just 25 cents a day to use the hill, a humble sum compared to today’s ticket prices.
Looking back at pictures of the days of yore, Fetcher wonders if the industry has lost sight of what skiing is really about.
“I’ve come to define a world-class resort as one where one’s view of the snow at the base is blocked by high-rise hotels and condominiums. You don’t really see that snow until you’re standing on it,” he said.
His late father, John, said of such growth, “We’ve created a monster.”
An evolving sport
Diamond remains positive about the changes in the ski industry and how they might usher in a new era of skiers and riders. He argues this is particularly true for millennials, who tend to value experiences over goods.
“There is a level of excitement and passion in skiing that hasn’t been there in the past,” he said.
Perlman acknowledged Steamboat Resort is in need of additional investments, particularly to develop the base area. He sees Alterra’s recent purchase of the ski area as a way to make those developments.
Until then, officials have found other ways to improve the skier experience and convert more people to the sport. The resort now offers financial incentives to get more experienced instructors to teach Never Ever classes for guests who have, as the name suggests, never used skis or snowboards.
As he explained, “The last thing we want to do is take the rookie instructor and have them try to introduce someone to the sport.”
Whether or not these are enough to sustain the excitement in the coming decades, only time will tell.
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Flows in the Yampa River dropped to near 40 cubic feet per second on Sunday afternoon — just a quarter of the amount of water flowing the same day last year.