Hope for a big snow year may offset some losses, but reservations down
  Our president calls this a “pivotal moment for America’s economy.” Alan Greenspan describes the events of the week of Sept. 15, as “once in an hundred years” referring to the domino of financial institutions failing, merging or being res­cued by federal intervention.
  It’s no wonder that con­sumers and investors alike have lost confidence.
  What does this all mean to us in the ski industry?
  While it’s hard to tell how things are going to sort them­selves out, it is certainly not good. Marketers know that con­sumers make their purchasing decisions based on their percep­tions, and all of this is coming at an auspicious time in the booking cycle of our coming winter season’s ski vacations.
  Jeffrey Donnelly, a market analyst for Wachovia who tracks the ski industry, said earlier in the week: “We have found there to be limited corre­lation between changes in eco­nomic variables and skier visits, and we believe moun­tain real estate is more insulat­ed from the U. S. real-estate downturn, (but) we believe the current environment could prove challenging.”
  He also observed: “Given the historic nature of the current (economic) environment, we expect even the most dedicated skiers may prove more budget conscious.”
  He offered this explanation as he downgraded his rating of Vail Resorts stock, from “buy” to “hold.”
  Of course, we might be saved by the weather, like last year, when plentiful snow graced all regions of the coun­try and trumped other negative market forces, resulting in the best year ever, measured by skier days.
  Or maybe people will vaca­tion for psychological relief, mindful of United’s famous ad campaign of some years ago: “I need a vacation!”
  “Going on holiday is a clas­sic coping strategy in an eco­nomic recession,” said Arthur Cassidy, a social psychologist.
  “In order to feel better, people have to get out in the sun.”
  Harley Davidson, staring at a discretionary sales slump, has a new ad out that suggests we red-blooded Americans should not be intimidated by tough times and notes the cathartic value of the open road, concluding with: “Screw it, let’s ride.”
  But we are unlikely to match last year, either in snow or overall performance, and while many may “need a vacation,” some just won’t be able to pull it off.
  While the core of the skier market has weathered past eco­nomic storms, conventional thinking is that resorts will lose business from the fringes, the less committed, the less affluent and particularly those who have been living beyond their means and simply can no longer do so.
  Others will still come but spend less, maybe keeping their old gear, maxing out a condo or eating in rather than going out.
  Europe and long-haul domestic guests will be further challenged by high airfares, and some will travel closer to home, offset in part by some who live nearby and chose to vacation locally, continuing the “stay-cation” idea experienced this summer.
  While the dust settles, we will continue to track and report the hard facts, relying on MTRIP’s forward-looking Reservation Activity Outlook, a summary of which is in the Mountain Travel Monitor Chart, and a few highlights provided below.
  Looking back: More long­haul guests stayed away but were offset by an increase in nearby guests, lessening the loss. August occupancy was down 6 percent but offset by a rate increase of 7.4 percent.
  Summer-to-date (May­August) occupancy is down 5.3 percent, and rates are up 5.4 percent for the same period.
  For lodging properties, rate increases offset occupancy loss­es, but other tourism-dependent businesses are feeling the pinch. Continued decline in occupancy often results in downward rate pressure, but no such evidence is yet apparent.
  Looking forward: The conse­quences of the economic pres­sure is becoming increasingly clear in advanced reservation patterns. Total cumulative advanced reservations for the next six months are trending 8.3 percent last year’s pace, adding to last month’s 3.8 percent decline in pace.
  The current pace of reserva­tions for the balance of the summer are down dramatical­ly, 25.7 percent, from last year’s pace.
  No one is putting lipstick on this pig; our best short-term prospects lie in a successful fed­eral bailout that swiftly solidi­fies our financial system and gives consumers confidence.
  Since 70 percent of our econ­omy is driven by consumer spending, that’s the root of the overall economy and the prospects for the winter season.