Aspen Skiing Company: Discounts needed again to spur business
July 15, 2010
ASPEN – Aspen Skiing Co. will try to lure more skiers next winter by renewing and expanding some of the discount packages it offered for the first time last season, Skico President and CEO Mike Kaplan said Wednesday.
The Skico will renew the Kids Stay, Ski Free package with lodges in Aspen-Snowmass. It offered the deal in March last season. It will be offered in April as well in 2011, Kaplan said.
The Perfect Storm, a package that offered a fifth lift ticket and a fifth night of lodging after purchases of four of each, will also be renewed.
“Everybody was looking for deals” last season, Kaplan told a crowd attending the Aspen Business Luncheon, an informal group that regularly meets to share lunch and a presentation by a key Aspenite.
The Skico and its marketing partners responded to the demand with deeper discounts than the resort traditionally offered. The Skico believes the deals helped spur business that was sluggish because of the recession. It reported its skier visits were up 4.3 percent from the recession-damaged 2008-09 campaign.
“To be up 4 percent in skier visits we feel was a good bounce-back year,” Kaplan said.
The Skico will look in 2010-11 to bounce back further – to pre-recession levels of business. Its skier visits were down 7.6 percent in 2008-09 compared to the prior year. In other words, it still has significant ground to make up despite last winter’s gain.
The focus for 2010-11 will be on offering the same quality of experience that Aspen-Snowmass is known for while being competitive with value offers, Kaplan said.
“We want to make new friends but keep the old friends,” he said.
Kaplan didn’t comment on whether the discounts would apply to the Skico’s single-day lift tickets or season passes. Single-day tickets topped out at $96 last season.
One area of trouble might be international business, Kaplan conceded. The continuing “economic malaise” in Europe is of particular concern, he said, while South American markets are in better shape.
Following are other major points Kaplan made in a fast-paced presentation and question-and-answer session:
• Snowmass Base Village – The foreclosure action started last week against the developer of the stalled Base Village project in Snowmass Village may prove beneficial, Kaplan said. The ownership of the massive project is “complex,” he noted.
“My opinion is it needed to be cleaned up,” Kaplan said.
He didn’t say if Skico would be an interested buyer in the vital base project.
Hypo Real Estate Capital Corp. of New York started foreclosure last week and successfully convinced a judge to appoint a receiver to manage the project while the foreclosure proceeding plays out. Hypo, and three other banks, alleged Base Village Owner LLC, controlled by Related WestPac, defaulted on loan notes of $386 million in principal and unpaid interest, and another $48.5 million for loan-related expenses.
In the best-case scenario, construction at Base Village could start in spring 2011, he said.
• New restaurants planned – The Skico has a couple of new restaurants on the drawing board and it is in negotiations that could lead to replacement of a couple of chairlifts, according to Kaplan.
Plans are being reviewed for a new restaurant at Elk Camp. The Skico needs approval from the U.S. Forest Service. “Improvement” of the Merry-Go-Round restaurant at Aspen Highlands is also needed in 2011 or 2012, he said.
Plans were less definitive for lift replacement. Kaplan said negotiations are under way with the Aspen Valley Ski and Snowboard Club and Maroon Creek homeowners on the construction of a bottom-to-top chairlift at Tiehack. The cost is pegged at $6 million. The Skico cannot justify the expense without assistance from partners, he said. Similar talks, with different players, have occurred over the replacement of Lift 1A at Aspen Mountain.
• Helmet use – Kaplan said Skico officials wanted to expand their policy on employee use of ski helmets while still allowing some “personal freedom.”
Salaried employees will be required to wear helmets next season. That affects about 500 workers, from public relations folks to mountain managers. In addition, all students 17 years of age and young must wear a helmet, as do students of any age in a terrain park. Instructors teaching an individual or class that must abide by the rule must also abide.
Skico officials heard from parents that said it was difficult to get their kids to wear helmets when the instructors were not. “We adopted more of a role-modeling policy,” Kaplan said. The Skico will “really ramp up” its education efforts next season to promote helmets, he said.
When asked by an audience member why the policy wasn’t put in place for all workers, Kaplan said that isn’t Skico’s style. “We just don’t hand down edicts, frankly,” he said.
In an employee survey before the policy was decided, some employees expressed concerns about their personal freedoms, according to Kaplan.