Vermont Ski Resorts Feel The Downturn, Look Forward

The recent economic downturn has put a damper on capital improvements for many Vermont ski resorts. As I mentioned in a previous post, Northeastern skiing, including Vermont resorts, saw decent profits last year despite the economy. But the economy is still down, and this is having a pretty big effect on how resorts are spending this summer/fall in the lead up to the 2009-2010 season.
Most resorts across the state have necessary improvements that they can't do without, but beyond that they are cutting spending short this year. For example, Killington/Pico, the largest ski area in Vermont, located east of Rutland, will make upgrades and repairs to its world-class snowmaking system, including replacing 2,000 feet of old pipe. For a destination resort such as Killington, these are very minor investments. Bolton Valley, a resort in northern Vermont east of Burlington, is only adding extending snowmaking on a single trail this year. This shows how even with a solid season last year, the economy is still hitting Vermont hard and they can't take as many big risks.
There are some resorts, though, that are going through with major projects that have had years of planning, despite other resorts holding back. Jay Peak, a ski mountain on the border with Canada, is building a new Tram Haus lodge that will include lodging, retail shops, and a new lodge. This $20 million dollar complex will greatly increase lodge space at the resort, which is greatly needed. The other major project happening in Vermont is at Stowe resort. Last year they built a brand new base lodge, the Stowe Mountain Lodge, and this year the resort is continuing construction around it with condominiums and a performing arts center. These projects are both quite expensive, but the two resorts have been planning these projects for a while, and determined that the long term benefit will outweigh the current costs.
Of course, resorts across the state are hoping an improvement in the economy will help them all make more improvements in the years to come. In general, most of what's being spent by resorts this year is for long term capital investments that will attract more guests not just this season, but for a number of years.

A side note, Magic Mountain, a recently reopened ski area, is selling shares of the resort in order to raise capital to make improvements in the future. This approach is not very commmon in the ski world, although another Vermont resort, Mad River Glen, is owned by share holders. This skiers-only mountain, although small, is loved by its die-hard skiers and seems to be quite successful by maintaining a low-key vibe that is just about natural skiing and nothing else. Perhaps this strategy will work out well for Magic Mountain too. Maybe more small resorts will use this strategy to get some initial investment so they can grow. It will be interesting to see how it pans out for them this season.

http://www.rutlandherald.com/article/20090802/BUSINESS/908020321/0/FEATURES08