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Posted: May 01, 2013

Ski-area expansions and the bottom line

Resort developments yield mixed reactions

Eric Peterson

There are few touchier subjects in the Colorado business world than expansions at the state’s ski areas. Many in the industry would rather stay mum on the dollar-and-cents decisions that go into an expansion of skiable terrain, but those who will talk about it see tangible benefits.

Breckenridge Ski Resort, owned by Broomfield-based Vail Resorts, is expanding by 550 acres on Peak 6 for 2013-14, and Monarch, Eldora, Wolf Creek and Crested Butte all have development plans on the drawing board, awaiting costly environmental studies and stamps of approval from the U.S. Forest Service. These moves of course all come along with multi-million dollar chairlift installations, glading and earthmoving operations, in the process stoking some serious environmental passions; let us not forget one of the last times Vail Resorts expanded in Colorado resulting in a high-profile arson by members of the Earth Liberation Front.

And if you manage to navigate this thorny labyrinth of politics and public opinion, you then need to sell a whole bunch of lift tickets, hotel rooms and cheeseburgers before there’s a meaningful return on investment.

In his scathing 2002 critique of the corporate ski industry, “Downhill Slide,” writer Hal Clifford posited that expansions were almost always follies from a business perspective. Expansions do nothing to grow the market – the number of skiers and snowboarders remains relatively static – so resorts that expand are doing nothing but fighting for a bigger piece of the same size pie.

It’s no surprise Vail Resorts declined an interview for this story. So did Hal Clifford, now a filmmaker in Boulder. Industry association Colorado Ski Country USA did not want to talk, either.

In most of the country, this is not even a story. The National Ski Areas Association says its most recent data pegged the average acreage of a ski area in the U.S. at 960 acres in 2011-12, up from 946 acres in 2008-09. Rocky Mountain West resorts in Colorado, Utah, Idaho, Wyoming and Montana edged up from 1,822 acres in 2008-09 to 1,838 acres in 2011-12.

Of course, this data doesn’t include expansions at Telluride, A-Basin, Breckenridge and Vail in the 2000s, or anything for the 70-plus years of the industry’s history in the state. Cumulatively, Colorado has undoubtedly seen more ski-area expansions than anywhere else, not surprising given that the state dominates all others in terms of skier-days. The state’s usual 11 million annual skier-days, give or take, is typically more than Nos. 2 and 3 (California and Utah) combined. This is where the ski business is at its biggest. And it doesn’t get much bigger than Breck, where annual skier-days are usually neck-and-neck for tops in the country – i.e. about 1.75 million.

Breckenridge’s controversial expansion is the first in the state since 2008 and the first at the dominant Summit County resort since 2002. While it’s hard to deny that the resort’s slopes aren’t near or at capacity, opponents have decried the lost lynx habitat and other environmental hazards. The Forest Service ultimately denied an appeal of its expansion approval last fall, paving the way for construction to begin this summer, and Peak 6 is expected to be open for the 2013-14 season, complete with a high-speed, six-passenger chairlift and a fixed-grip lift.

“I don’t know of any other industry that can ask the question every year, ‘What’s new?’” laughs Tom Watkinson, communications manager for Telluride Ski Resort. “Do they ask that of cruise ships and beaches? No, but they ask the ski industry that every year without fail.”

Greg Ralph, director of marketing for Monarch Mountain, echoes Watkinson’s opinion. “Skiers always want something new. That’s the pizzazz of the industry,” Ralph says.

“We’ve had some really strong growth in the past seven or eight years,” says Ralph, citing an uptick from about 140,000 skier-days in the winter of 2005-06 to about 185,000 this past season. He expects more as Monarch’s top metro market, Colorado Springs, is expected to increase its population by about 100,000 in coming years. “You don’t want to lose the look and feel of the area.”

It follows that Monarch, which has not expanded its lift service since the early 1990s, wants to add about 300 acres of lift-served terrain. The resort has submitted the master plan to the Gunnison and San Isabel National Forests and is awaiting word on approval.

Ralph compares the plan to Arapahoe Basin opening the 400-acre Montezuma Bowl in 2007-08. “That’s been very well received,” he says. He says the target is to have a new chairlift running on the back side of Monarch by 2020.

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Denver-based writer Eric Peterson is the author of Frommer's Colorado, Frommer's Montana & Wyoming, Frommer's Yellowstone & Grand Teton National Parks and the Ramble series of guidebooks, featuring first-person travelogues covering everything from atomic landmarks in New Mexico to celebrity gone wrong in Hollywood. Peterson has also recently written about backpacking in Yosemite, cross-country skiing in Yellowstone and downhill skiing in Colorado for such publications as Denver's Westword and The New York Daily News. He can be reached at Eptcb126@msn.com

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