Latest economic turmoil could affect Colorado ski season
The federal debt ceiling chaos in Congress followed by a U.S. credit rating downgrade and a volatile stock market could have local implications as the 2011-12 ski season nears.
Analysts, however, just aren’t sure about what those implications might look like just yet.
The 2008 recession has taught the valley a lot about consumers’ habits during uncertain economic times, said Ralf Garrison, director of the Mountain Travel Research Program, which studies economics in Western mountain resort towns.
“What we know from the experience we had several years ago and from what we have studied over the last several years is that consumers don’t like economic uncertainty and the consequence is that they’re less likely to spend, especially in discretionary areas, which includes vacations,” Garrison said.
The recent turmoil in Washington, as well as a European debt crisis, has the potential of putting the valley back in the business of having to earn the demand of consumers, Garrison said.
While the potential is there, Garrison and others agree it’s too early to know how the markets, and the consumers, will respond over the long term.
No major concerns yet
In the latest report from Vail Resorts analyst Will Marks, of JMP Securities, revenue projections for Vail Resorts’ fiscal year 2012 are positive. New amenities at the company’s resorts, like new terrain at Northstar-at-Tahoe, are big drivers for higher revenues, according to Vail Resorts and to Marks’ report.
Rachel Zerowin, director of public relations for the Breckenridge Resort Chamber, said reservation agents from Breckenridge Central Reservation have still been receiving quite a few calls about winter vacations.
“They said they’ve been fielding what they feel is a pretty strong interest in winter, and that’s both for larger groups and families, as well as longer stays,” she said.
Interest in the winter holidays is also up in the summer, she said.
Because of the trending interest shown in larger groups and longer stays, Zerowin said the BRC is launching a multi-generational vacation package for the coming ski season.
How will consumers respond?
Lessons from the past show that consumers like to wait until the last minute before booking their vacations when the economy is unstable, especially when there are deals available.
The latest information Vail Resorts released, in June, shows season pass sales for 2011-12 are up 19 percent in units and 27 percent in dollars.
It’s still to early to know whether the recent market conditions will affect that pass sale momentum or early lodging and vacation bookings, Garrison said.
One thing that seems for certain, though, is that recent economic instability could have a reversal effect on the confidence that had been building back in recent months. That reversal could also prove true in terms of the recent gradual growth in daily room rates and occupancies in local lodges.
“There’s no doubt that the consumers are going to feel pressure for their money and they’re going to look for better value or lower prices amongst competitors as a way of being frugal,” Garrison said. “… I’m not so concerned about the formal statements of the double-dip recession, but I am concerned about how consumers feel about their economic well being and how that will translate into vacation travel.”
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