Arapahoe Basin numbers strong in rocky economy
summit daily news
SUMMIT COUNTY – After some early season jitters, Arapahoe Basin rebounded to record its second-highest skier visit total ever. For the 2008-2009 season, The Legend tallied 409,810 skier days, cracking the 400,000 mark for the second year in a row.
“Considering the state of the world, we’re pretty happy, said A-Basin chief operating officer Alan Henceroth. “We were really worried at the start of the season,” he said, adding that the winter started slowly, built up to a solid mid-season but tailed off again in May.
“A-Basin was definitely the bright spot in Dundee’s U.S. operations,” said Greg Finch, president of Dundee Resort Development, the American subsidiary of A-Basin’s Canadian parent company. “Skiing in general held up pretty well,” Finch said, acknowledging that some parts of Dundee’s U.S. operations were hit by the flagging economy.
Finch singled out Bear Valley, the California ski area that relies heavily on skiers from the Central Valley for its mid-week business. California in general has been economically devastated by the recession, and the Central Valley was hit especially hard. Finch said several of the Bear Valley’s key markets are communities that lead the U.S. in home foreclosures.
But overall, the company’s Canadian real estate operations are holding up well, which means A-Basin isn’t as financially exposed as one might imagine. One measure of that relative strength may be that A-Basin maintained a full staff level all winter. There were no salary cuts – as happened at other ski areas – and the resort was able to deliver on a promised bonus program, Finch said.
Dundee was preparing to start construction on a 300-unit residential development in Toronto this week.
“Where else in the world will you find that right now?” Finch said. “Canada is doing so much better than the U.S. right now. They didn’t have the same crazy boom that we did, so they’re not having the same bust, and the banks are in good shape. They didn’t get caught up in all that crazy stuff,” Finch added, referring to the financial mess spawned by the collapse of complex real estate-related banking products in the U.S.
But overall, Finch said he’s concerned about resort-town economies. The heavy reliance on real estate development came to a sudden end last autumn, and the outlook is grim.
“We felt some cold economic winds blowing, but it all came so fast in September and October. It was brutal,” Finch said. Looking around the Vail Valley, Avon-based Finch said there are four major construction projects currently employing thousands of people.
“When those are done, there’s nothing coming. It’s going to be a long time before we build like that again,” he said.
Since buying A-Basin, Dundee helped finance a string of multi-million dollar improvements over eight years, including snowmaking, replacement of the Lenawee Chair, a new warming hut and patrol headquarters at the top of the mountain, a new rental shop and locker room at the base, the midway Black Mountain Lodge, the opening of Montezuma Bowl and last year’s parking lot expansion and construction of the pedestrian underpass.
The parking improvements, including the tunnel and shuttle service to the remote lots, paid off for A-Basin in terms of the guest experience. Visitors were much less likely to experience a parking crunch, even on the busiest days, Henceroth said.
“As soon as things settle down, there are a few more things we’d like to do,” he said. “We’ve got one more parking lot we want to develop,” he said, explaining that A-Basin will eventually expand the area near the highway department’s maintenance shed to create a more formal parking area.
The ski area will take a breather this summer, focusing on smaller, behind-the-scenes work. But a replacement of the aging Exhibition Chair is still on the horizon, according to Henceroth and Finch. The financing for that project, which could cost about $4 million, according to Finch, won’t come out of A-Basin’s cash flow.
“It’s too big a number. That would come from Toronto,” Finch said. “We’ll be asking, if we spend it, what will it do for our business? Do we need it?” Finch said.
Eventually, it may become a necessity, simply based on the age of the existing chair, he added.
Henceroth said that, even though skier numbers held up better than expected, other aspects of the business did feel the effects of the recession, including retail, food service and ski school.
Looking ahead, season pass sales for next winter started well and Henceroth is hopeful that trend will continue through the summer.
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