Time to Get this Party Started!

Enough of this off season! Last Spring was chock full o’ news with Vail Resorts and Aspen/KSL running amok with huge bags of cash buying up resorts. We’ll be keeping an eye on how that all shakes out.

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Aspen Nips the Catz Tail! Trump Saves the Ski Industry!

We have some product reviews coming your way that you won’t want to miss.

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You will likely finish reading this installment confused by the many twists and turns and incomplete directions. GOOD…You darned well should be! The ski industry is slowly killing itself and the reasons are as complex as they silly.

Trust me though, I’ll get you straightened out on it all by the end of this season 🙂

What finally shook me out of my summer doldrums were two articles from the same author and source. Both articles referenced “experts” who talked about why the ski industry isn’t growing. I am always interested in that subject and I read them both, several times.

What struck me was not the specific opinions of the two experts but how two experts could be looking at the same industry and come up with conclusions that are perfect opposites. Could it be that the industry is failing to grow because there simply isn’t anyone who knows what is really going on?

The first article I saw was posted by ISPO.com and you can read it here. READ ME. 

Basically it claims that skiing is too “elitist” and needs to find a way to get more people from lower income demographics to participate. The article didn’t say it in so many words but I had the distinct impression that the intent was to socialize or, at least, to have governments subsidize snow sport participation.

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China plans to grow snow sports in an unprecedented way. If they are successful they would nearly double the number of active participants in the world. I wrote about that last year in…

Senior Skiing To Grow 400% Worldwide. 

If the rest of the alpine world is to survive, they may well have to learn how to compete against government subsidized resorts in China and Russia.

From that perspective, I can sort of understand where this expert is coming from. BUT, it seems like “experts” in Japan, Korea, OZ, NZ, Canada, and the US are gearing up for what they believe will be a  Wave of affluent Chinese coming their way.

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Given that China has proved it can build a world class ski resort in less than a year, it is likely that millions of folks from Japan, Korea, OZ, NZ, Canada and the US will pass them in the air…on their way to China...to enjoy government subsidized, world class skiing…on a free seat on government owned Chinese Airliners.

What I am saying is that China would very easily take the decision to offer free everything from travel to lodging to meals and lifts. One or two seasons of that could absolutely trash the ski industry in most traditional alpine countries.

Sometimes I wonder if Vail Resorts and Aspen/KSL understand that the 30 some resorts they own between them will be the only ones open in 15 years and are aligning themselves to serve only the wealthiest of the wealthy from around the globe. It’s already cheaper to take the annual ski vacation in Europe than it is to Colorado. How soon before it is even cheaper to enjoy world class powder in China?

The second article, from the same author and website… different expert.….posted in the same week contends exactly the opposite…Skiing is not “elite” enough. It needs the elite and not the “masses”!

First, I am curious to know who gets to decide if YOU are an “elite” or a member of  “the masses”. That decision almost never works out for you when you don’t get to make it.

This second article I didn’t spend a lot of time with. From the perspective of industry specific knowledge, the “expert” didn’t seem to have much. It was more like the standard Google/SEO – blast the world with “branding” thing that appears 400 times a day in my Facebook news feed.

From my view, it is really just a guy trying to sell some consulting time. I based that on the claim in the article that in a market populated by fairly affluent people he seems to think that dominating Google is the strategy of choice.

My thought is that the more easily you can define a target the easier it is to hit it. You go on LinkeIn, search keyword “ski” and bang – 1,000,000 affluent skiers that you can contact directly. His claim that “targeting” is dead is foolishly myopic and “tech-centric” and flies in the face of everything we know about how people in those “elite” classes make buying decisions.

Look, I am a free market guy and if you can get someone to spend $40 for a Cheeseburger by putting it on the menu as “Boeuf Haché avec du Fromage”…congratulations! PT Barnum told us many decades ago how that works.

I will make a prediction right now that $40 cheeseburgers and $300 lift tickets aren’t going to save the ski industry. Neither will socialized skiing. 

Again, the problems facing the industry in its traditional haunts has been the same problem for more than 20 years. The number of participants isn’t growing and neither is the number of times they go skiing each season. The industry has known for a long time that they need to do a much better job of hanging on to beginners.

The woeful statistic is that 82% of people who try it, don’t come back. NOTHING the industry has tried in the last 25 years has had any significant impact on that number.

According to the 2017 global industry study by Luis Vanat, participation in snow sports has been, and still is, in steady decline in traditional alpine nations.

The only places where it is growing are in Russia and China. 

The only demographic data that tracks directly with the decline in alpine sports is the decline of the middle classes in traditional alpine countries.

This conclusion is bolstered by the fact that Russia and China enjoy rapidly growing middle class. It is also supported here in the US that of the 200 plus ski areas lost in the last 20 years  most are predominantly small, local, low cost ski areas.

The cost of a day of skiing has grown much faster than inflation during a period when fewer and fewer people could afford even the low end of the cost spectrum.

All that boils down to that the ski industry really cannot have any impact of political and economic models. If current political and economic policies are eating away at your sources of revenue then you have to do something.

There are two ways to make a million dollars. Sell one million people a one dollar item or sell one million dollar item to one person. Between those extremes there are any number of potential blends of strategy and tactics to reach that goal.

So far, all we see are companies inching their way up the ladder. The cost of participating in lift served snow sports has been rising at a rate much higher than wage growth.

At a time when part of your client base is rapidly disappearing to economic policies, driving prices in the opposite direction only exacerbates the problem. Given the shrinkage in youth participation, the industry may well be heading toward a bubble that will fundamentally alter it and leave it no means of recovery.

When I was a kid in the late 50s and early 60s there simply weren’t many ski areas around. There were mountains of surplus military ski equipment that could be used on whatever local bump kids used for sledding. Our family “ski vacation” consisted of driving up Thompson canyon west of Ft. Collins and skiing the roadside ditch. Mom would drive us up and Dad would ski down with the kids. Then Dad would drive and Mom would ski with the kids. I had been skiing 15 years before I experienced a mechanical lift at a ski area. The current growth in a return to those halcyon days of hiking for turns is a breath of fresh air

In many towns these days the local sledding hills are shut down due to legal liability concerns. Kids are less active generally. Thanks in part to the explosion of a million cliff hucking, drowning-in-an-avalanche, GOPro videos, millions of mothers are deciding that skiing is too dangerous for their children.

There seems to be a growing list of reasons to NOT participate. At least, that list is growing faster than the list of reasons to give it a go and stay with it. The high costs certainly make it easier to stay away.

There are a lot of reasons why people don’t stick with it. Costs are certainly a part of that equation. Costs won’t change until the industry feels that is the only way it can survive.

One of the reasons that shows up in the annual surveys is poor proficiency. People think their skiing sucks and who is going to spend their annual vacation money doing something they suck at?

The problem is that there is much the industry can and should do about proficiency but they simply don’t care to do them. Lessons are expensive and will remain expensive, period.

When ski resorts are operating a government granted monopoly, there will not be any competition for the monopoly ski schools. Until there is, instruction will remain as expensive as it is ineffective and customer losses to “poor proficiency” will continue. Collision accidents on the mountain due to poor proficiency and over-crowding will continue to climb.

Sure skiing is expensive. The interesting thing is that once you reach a point in your life where you have the time to go skiing and you can afford to go skiing, the industry isn’t interested in you anymore.

Have Senior Skiers Been Abandoned? The Wrinkled Irrelevants…

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The outlook for increasing average proficiency is pretty bleak. Instructors with a lot of experience are “aging-out” of the profession and not enough young people are taking it up.

Instructor shortages are so severe that resorts are offering $1000 bounties to any employee who helps them poach an instructor from a another resort.

 

The outlook is so bleak, in fact, that the Professional Ski Instructors of America (PSIA) have taken to designing instructional programs for companies who make teaching machines.

But hey, it’s almost December and the local mountain is open. So, we’ll just keep on skiing and riding and muddle through somehow.

Kowabunga!! Tips Up Folks!

 

 

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Aspen Nips the Catz Tail! Trump Saves the Ski Industry!

Tony Robbins would have to admit that backing out of the Paris Agreement is a genius leadership move…

Ya, I know what you are thinking. But really…

I already went off on Vail’s climate announcement so I won’t repeat that (read it here)

Predictably, Aspen today announced they too are “#StillInIt” and all about living up to the Paris Agreement (PA) even if the evil Orange Dragon isn’t putting the federal government in the game. I am still at a loss about why on earth they aren’t saying, “Thank goodness!”

I will get to reasons why the lift-served snow sport industry ought to be thanking Trump for pulling the US out of the PA. I promise….

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Most people, meaning those for AND against the PA, have no idea what is actually in it. (many will read it and still have no idea what it says)

So, how can they make an informed decision? Truth is, most people don’t. They take whatever collection of 15 second sound bites they have from whatever sources they prefer and they follow that.

We live in an “Information Age” but most of what we consume as “information” isn’t really information. It is a collection of other peoples’ conclusions. In the same way that computer models produce conclusions NOT “data”, consuming news only gives you the chance to vote on their conclusions it doesn’t give you “information” you can use to make your own decisions.

So, I read the PA It isn’t very long. Here is a link to the December 2015 version. Paris Agreement. (I can’t make the URL link work. I found it with the search terms “Paris Agreement Document) If you don’t want to read it, I’ll just tell you that someone at the DNC photocopied the first page and used it for the party platform.

The PA does nothing less than take for itself all the responsibilities of a government. The PA is going to eradicate poverty, promote LGBT rights, fight for the ubiquitous “social justice”, “climate justice”. Lots of justice in there. They will 3D print sliced bread, canned beer and real sex partners for everyone on the planet. The only shared feature of their various definitions of “justice” is the transfer of money.

Some people say. “It isn’t binding so why not just sign it?”

The obvious answer is that if it doesn’t actually DO anything then why bother with it at all?

If you were buying a car, the PA is that moment when the sales guy says, “Just sign the work up sheet here and I’ll go ask my manager to approve you”…unh huh….

But, the reasons run all they way down to our constitutional roots. It is deeply tied, believe it or not, to the current travel ban broo-ha-ha. If you recall, a judge held that the travel ban was discriminatory in its “intent” not because of the language of the executive order itself but because of things Trump said during the campaign.

If SCOTUS should uphold that decision it sets an interesting precedent. If Trump had verbally supported the PA, any regulation that doesn’t fit the PA mold could be overturned by citing the Travel Ban decision and Trump’s verbal remarks would carry the full force and legal weight of a treaty DOMESTICALLY without ever having passed a two thirds vote in the Legislative branch. That would essentially neuter the Legislative branch and turn the Executive branch into the hand maiden of the judiciary branch and effectively give any entity foreign or domestic the opportunity to circumnavigate the Constitution by filing a lawsuit. Any Ork with a pile of cash and a lawyer can become “President of Middle Earth for a Day”

Another popular meme is, “But only Syria and Nicaragua haven’t signed it”

My Mom used to say, “Just because all the other kids are jumping off the bridge does not mean YOU should!”

Ya, whatever, Mom, but seriously..read the PA. If you are the dictator of Bumfuckistan and you get millions in free western cash and are NOT bound by the PA to spend it on anything related to the climate, why the hell would you NOT sign it??”

The world is NOT a collection of unconnected dots, people. There are NOT 195 nations overflowing with love for the planet…yer gonna have to trust me on that..

All the PA really does is establish the global pecking order and loosely define the nations who will pay the bills and which nations will receive payments. The winners and losers have already been determined.

One thing is does communicate clearly. It does NOT like free-market solutions. It prefers money raised by taxation.

MOST of the payments will go to support the massive global bureaucracy that the PA calls for. In order to manage their involvement in the PA, every country will be forced to develop it’s own bureaucracy. Ka-Ching!

In the US that would have meant a new cabinet level position and many thousands of pages of new regulations. Ka-Ching!

Surely, those mountains of regulations would mean that cities, states and counties would have to have their own new bureaucracies…. Ka-Ching

Individuals and businesses (such as Aspen and Vail) would also have to pay the direct costs of compliance with all these new regulations as well as the incremental tax increases associated with the PA… Ka-Ching

Businesses such as Aspen/KSL and Vail would have to hire an army of people to cover the army of government employees who would want to see their plan, approve the plan and monitor the plan, receive massive reports on the plan. ..Ka-Ching

Because the technologies to make a huge reduction in energy consumption are not cheap, businesses would have to raise prices to customers, reduce headcount, reduce benefits, reduce pay raises…in short some pretty tight austerity measures…Ka-Ching

Or, receive massive government subsidies….KA-CHING!

We already know that folks in countries who have gone whole-hog for the renewable technologies have seen unsustainable increases in their electric bills….Ka-Ching

The price of fossil fuels, petroleum in particular, were predicted to rise 300-400% by 2030. We know that is a political target anyway. It was part of the Obama platform in 2008 and 2012. I can’t put that all on the PA.

When China surpasses the US in oil consumption, the trading currency would likely switch from dollars to yuan. The PA would simply accelerate the inevitable change. With US domestic oil production reduced and in many cases, blocked, the US doesn’t have a strategic fall back position…KA-CHING

The economic pressure of high fuel and electric prices is going to mean the end of vacation travel for millions of middle class households that currently participate in snow sports...Ka-Ching

You are maybe wondering who are all the beneficiaries of all this Ka-Chinging?

The simple answer is that if you love lift-served snow sports..it ain’t you…OK?

If you are a skier, YOU are the Ka-Chingee!

The cost of getting to a ski resort is going to go way up…Ouch

The cost lift passes and staying, eating and apres-skiing there is going to go way up…Ouch

There are going to be millions fewer customers who can afford to ski. Guess what happens to everything the resorts charge for and who will pay for that?…Ouch

Perhaps this gloomy economic outlook is the strategic driver behind the flurry of acquisitions? In the potential scenarios created by the PA, only a few resorts will survive. Only the top economic demographics will remain as customers and the dramatic increase in prices won’t affect their participation habits much. But what about all those small businesses in those ski towns who think The Consolidators are the savior returned? What about all that public infrastructure built to support twice the capacity?

Perhaps the “consolidation” craze is just preparing Aspen?KSL and Vail (who already own that market segment) for the inevitable and crushing demise of the lift-served snow sport industry. They intend to own the few resorts they believe will survive.

I was scratching my head over Vail and Aspen volunteering to live up to the PA…

But, if they can suck the budget-skiing resort owners into a “climate war” or influence legislation and regulations in a way favorable to their strategy, it would hasten the demise of those smaller  venues, that’s a win. They are already positioned financially and, as they grow larger, will enjoy more political influence. A huge chunk of the funding for the US Forest Service already comes from VR and Aspen/KSL.

If you are one of the millions of participants who struggle or make sacrifices so you can go skiing or riding, there is absolutely nothing in the PA for you to be happy about. 

 People yak about building “awareness” and take fat donations to do that. I am just wondering if the problem is awareness or “careness”. Everybody from Kindergarten on up is aware of climate change….not that many people care.

The battle cry on the slopes these days is “save our winters!”

My question is, “For Whom?”

But let’s not stop there. Let’s spin the dreidl again and see what turns up.

Even though they are not going to be REQUIRED to suffer all the slings and arrows of outrageous legislation (and YOU won’t have to pay for it all)…

Aspen and Vail just said they are going to do it anyway, which means you will pay for it in one way or another.

BUT…because they won’t have the heavy burden of regulatory compliance and exponential growth in fuel and electric bills, it makes a nice strategic and tactical windfall. They have the opportunity to take the money they had set aside for the effects of the PA in their long range plans and put that money to good use reducing their elephantine carbon clog hoppers.

 

Aspen says they are STILL in it. That surely means they were ALREADY in it before today. I wonder how they were planning to deal with all the requirements of the PA. Let’s take a look at just some of the things that Vail, and now Aspen, have committed themselves to fund. I don’t mean “support” or “signal intent” or lobby or protest…I mean PAY FOR..send money…..moola…dinero….scheckles

Payments to “The Convention” to be distributed to foreign governments to;

fight poverty…. create food-security… support LGBT rights…create climate justice, social justice..the list is really long. How will Aspen and Vail determine how much money to send off every year? Without a government to tell them how much, it should be interesting to watch. I want to see a photocopy of the checks…

Maybe we are seeing the emergence of a Vail v. Aspen Slugfest (click here to read it)“climate competition” that would blow the roof off their goals. Wouldn’t that be something if free enterprise took the lead over tax driven, ineffective government bureaucracy?!! I mean, after all, the War on Poverty and the War on Drugs worked out so well….

So, I am heartened by these announcements by various companies to toe the PA mark and soldier on alone.

As Tony Robbins has often said, “Real leaders don’t create followers. They create new leaders”

+It just might be that backing out of the Paris Agreement has lifted America from becoming a band of dogged, slogging  followers and created all these new leaders.

Rather than having surrendered “American Leadership”, the Orange Dragon just broke away from the pack of followers and unleashed these new leaders on the world.

To be fair, it just might turn out to be the most genius leadership move ever.

 

 

Senior Skier’s Network Update

Thanks to you, the Senior Skiers’ Network is growing like a weed. As our three months anniversary approaches we have 8,633 readers in 82 countries around the world! Each of you reads more than one article when you visit, with a very low “bounce rate” of only 11%.

You prefer news about the snow sport markets around the world by a 3 to 1 margin. That kind of surprised me. The most popular articles concerned the Vail Resorts and Aspen/KSL acquisitions

Articles about inexpensive alternatives are the second most popular, followed closely by Do It Yourself ski instruction.

Well Done World!                      Thank-you for your support!

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Senior Skiing To Grow 400% Worldwide

This article in SkiAsia.com truly fascinates me! It’s really hard to pin down an exact number of active snow sport participants in the world. Outside of Winter Olympic news, The whole notion of skiing in China has been mostly off my radar. Bad analyst..Bad analyst!

So, just thinking “out loud”….

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Many resorts don’t report visits and many people who haven’t skied in years identify themselves as skiers in blind surveys. The number is estimated at around 100 Million worldwide.

Whatever the real numbers are in traditional winter sport countries, the emerging markets in Eastern Europe, Russia, China and elsewhere are on the verge of swamping existing demographics in a very profound way.

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The US has roughly 12 Million active participants who generate about 55 million visit/days each year. It has been that way for a couple of decades.

Now, here is China setting a goal to increase the number of skiers and riders in their country from their current 15 million to 300 million over the next five years!

You read that correctly Three…Hundred…Million…New…Participants.

In Five Years!

The American ski industry has struggled for 20 years just to break even on participation growth.

In reality, the US industry has not created a net gain in participant numbers in a VERY long time. In fact, if you look at this chart, there appears to be a serious “down-bubble” on its way in the U.S. as the number of new, young participants has been shrinking and older participants “age-out”.

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According to the 2017 Laurent Vanat report, the recognized authoritative study of global snow sports market data, while Vail Resorts, and Aspen-KSL are making headlines by moving the deck chairs around the Titanic, China has grown to 646 ski areas and Russia to 354 resorts. Sure, many of them are on run with a surface tow but, it won’t stay that way.

A friend of mine from Kyiv just sent pictures of her Ukrainian ski vacation. Good slopes, good snow, great accommodations and the food was 5 stars on any gourmet’s chart. All at the cost of about 20% of a Colorado vacation.

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For a long time, in the US, the number of participants and the number of visits per season has been either flat or declining. Western Europe is seeing declining numbers as well. Switzerland is tanking in a major way.

Revenue growth has come almost exclusively from price increases.

Coupled with declining visitation, that model is unsustainable as fewer skiers are forced to pay ever higher prices to float the industry boat. VR and Aspen/KSL may enhance their margins by aggregating revenues and creating some economies-of-scale but it doesn’t change the industry’s foundation elements, declining numbers and rising prices.

Products like the Epic Pass are merely the hand the magician wants you to be fascinated with while he lifts your wallet. With declining numbers of customers, the only way they can keep their investors happy in the long term is to raise prices. They have proven incapable of creating new customers.

Faced with emerging, growing markets with cheap and in some cases, government subsidized pricing, it will be much less expensive to enjoy your annual winter vacation in China or Bulgaria than in Colorado.

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China recently flew its first domestically designed and manufactured airliner. 

China recently announced it will open a new “Silk Road” for western trade.

Do the math folks. The world’s fastest growing economy plus 300,000,000 new participants plus government built and operated airliners plus millions of acres of new government subsidized ski resorts. They already manufacture an awful lot of the equipment you buy.

Should China decide one winter to offer free flights, lodging and skiing to Europeans and North Americans, what might be the result? Overnight, the entire western snow sport industry might well become what has been sneeringly referred to as a “feeder resort”.

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The pressure on prices in the western industry will be tremendous. In the short term, the pressure on publicly held North American consolidators may well be more than investors are willing to bear.

Certainly there will be downward pressure on pricing at destination resorts as more options become available in emerging markets

The good news is that small non-destination venues that do not rely on snow making will enjoy a significant competitive flexibility. If they can cover the costs of operating the lifts, they can stay afloat. Highly leveraged operations will struggle…unless…

Unless, large western operations can involve themselves in development of resorts in these emerging markets…(They probably have and I have just been focused elsewhere) It certainly puts the Whistler acquisition in a whole new light for me!

And, it makes sense for them to do so. Pricing in traditional western markets has been treading the tipping-point of the supply & demand curves for a long time. Growth in participant numbers are flat or declining.

Conversely, Eastern Europe, China, and Russia are creating new snow sport participants in very large numbers already. Now that China has made snow sports compulsory for kids in Beijing, the number of new participants may grow as much as 40% year-over-year for the foreseeable future.

Let’s talk about Brain-Drain.

You cannot pack 300 Million new people on the existing slopes. There is going to be a whole lot of building going on.

North American resorts are ALREADY having trouble finding enough ski instructors to cover the demand.

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China and Russia and Eastern Europe will need expertise and the only place to get it in a hurry is from the mature markets of Western Europe and North America.

With Snow-Job wages in the US as ridiculously low as they are, it would not be hard for subsidized, emerging markets to drain off the best and brightest. Resort design, engineering and construction talent, snow making experts, resort operations and travel experts, all of these skilled workers, and many more, are targets for predatory hiring practices.

American snow sport organizations such as NSAA and PSIA already spend a lot of resources on fishing for new instructors on college campuses. The North American instructor corp is already an aging population.What happens to the supply of new, young instructors should China decide to offer a one year paid internship with free housing on American campuses..or worse..to already certified instructors?

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There are a variety of competitive responses available to western snow sport operators, not many, but some very interesting possible outcomes. The one that I find the most worrisome is this…

The NUMBER…..300,000,000 new participants is mind boggling, breath taking.

Add that to growth in other emerging markets and who the heck cares about a paltry 12 million Americans?

If I am Vail or Aspen/KSL I get over there and develop a cut-rate feeder market and drive North American skiing development into THE destination for the global elite. Private gondolas and $20,000 per night rooms….THAT kind of “elite”.

Broad based North American participation from the middle class would no longer be a significant business consideration. If you can consistently attract 60,000,000 visit/days out of the world’s wealthiest skiers, who the heck cares if Joe the Plumber can afford to ski?

What bugs me is that current operations such as Aspen/KSL and Vail are already boiling that frog. Pass prices are going down but the cost of everything else associated with a ski trip are going up at rates higher than inflation.

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They have their Old-Schoolers too! Very Old school 🙂

Slowly as the glam and bling rise, and the western middle-class declines, snow sports are increasingly out of reach for a growing number of traditional participants.

But, with millions of new participants on the near horizon there may be enough of the world’s newly minted millionaires in China and Russia that the western ski industry can afford to simply walk away from it’s traditional base.

The article doesn’t spell out HOW China will create these millions of new skiers and riders. Even if it is just all grade school kids, they will grow up one day.

Time will tell and I will be watching closely from here on out. Now if you will excuse me I have to go read Benny Wu’s market studies on the Chinese snow sport industry….

Stay Tuned!

Vail versus Aspen- A Senior Skiing Slugfest?

After last week’s examination of the seemingly unstoppable juggernaut, Vail Resorts, (Senior Skiers Sound Off – Vail…Beauty or, the Beast? ) I had planned to put out something a tad more light-hearted. After all, the season is winding down and we need to maintain the stoke for the 2017-18 season, yes?

But, you can’t let news like this just slip by. In recent news, the Aspen Ski Company has announced an agreement to buy Intrawest for $1.5 Billion. Intrawest owns Winter Park and Steamboat Springs in Colorado, Mount Tremblant in Canada, Stratton in Vermont and 3 other resorts.

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Does this signal a head-to-head slug fest? Crown versus Katz, in the street at high noon, for primacy in the North American snow sports market? Will this touch off a kind of Corporate Chinese Downhill where competition serves the marketplace by driving down prices? Doubtful.

As we have seen with VR acquisitions, traffic goes up and prices go up. While season pass prices have gone down compared to 20 years ago, the total cost of a ski vacation has risen.

As Aspen enters the corporate snow sport fray, we won’t know how they intend to manage these new properties until they actually begin operations. If they are to echo the Aspen Experience, we have to assume they will want to draw their business from the higher income brackets. Today’s announcements that not much will change seems carefully calculated to insure stability in share prices until the merger can be completed.

To think a management team, driven in the public eye by the Aspen name, will go off into the future without even taking advantages of economies of scale is naive in my view.

Everywhere that has happened it tends to pull prices for all goods and services upward, out of reach for the average senior skier. This is yet another signal of a kind of “gentrification” of the lift served snow sports market. Have Senior Skiers Been Abandoned? The Wrinkled Irrelevants…

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From Wikipedia, In the US, the Centers for Disease Control and Prevention report Health Effects of Gentrification defines the real estate concept of gentrification as “the transformation of neighborhoods from low value to high value. This change has the potential to cause displacement of long-time residents and businesses … when long-time or original neighborhood residents move from a gentrified area because of higher rents, mortgages, and property taxes. Gentrification is a housing, economic, and health issue that affects a community’s history and culture and reduces social capital. It often shifts a neighborhood’s characteristics, e.g., racial-ethnic composition and household income, by adding new stores and resources in previously run-down neighborhoods.”

What we are likely to see in the coming years is an economic stratification, which also implies racial and ethnic stratification, in lift-served snow sports. Those who can afford the Disney-esque immersion, that is now being called “experiential” skiing, will likely appreciate the up-market move.

But, this up-market move does two things. It relegates those who cannot afford the “experience” to venues who will struggle to keep the lifts running, and it vacates the mid-priced segment.

In other industries that has tended to pull prices upward across the board. In an industry that has struggled to find new customers for 20 years, it does not bode well. It is an industry for which the cost barrier for new client acquisition is already significant.

Should the gentrification of snow sports pull prices upward away from its blue-collar roots, it may well accelerate the closure of down-market venues; more crowding, and further economic stratification, as the industry bleeds customers from the lower income brackets. Perhaps the Alt-Ski community will see some growth ( Seniors Skiing on the Cheap – An Alt-Ski Community )

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When ski resorts are abandoned, the physical structures are often left to simply rot in place

In that light, numerous programs to introduce poor urban kids to snow sports almost becomes a form of mockery. “Hi kiddies and welcome! We hope you love skiing and riding now because you will never be able to afford it when you grow up”. My more libertarian  sensibilities cringe at the notion of public lands being used to enrich the lives of a relative handful while driving their availability to others downward.

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“From All according to their lobbyists, To those few who can afford them”  – flies in the face of American democratic traditions.

As snow sports become less and less affordable, the Aspen-Vail cage match may well create a hue and cry that endangers these government granted monopolies that operate on public property,

The “multiple use” policy of the US Forest Service ought to have limits that serve the interests of all. In the same way that a vacation to a national park has become corporatized, less affordable and less enjoyable through government granted monopolies, so too may seniors’ skiing.

In the last 20 years the number of active snow sport participants has held steady at around 12 million per season. According to the National Ski Area Assoc. there were 622 ski resorts in the 1988-89. Today, according to a chart at the Statistics Portal there were 463 during the 2015-16 season.

That’s the same 12 million people skiing and riding on 159 fewer resorts and a LOT less acreage.

crowded ski

We seniors skiing on these crowded slopes can testify that you have to have the vigilance of a combat veteran to get through the day. Eyes in the back of your head and your head on a swivel, just isn’t fun. Senior skiing ought to be about a sense of freedom…not survival.

king kong v godzilla

With over-crowding and collision injuries on the rise today, if this trend continues, the remaining slopes promise to only bring a degradation of the snow sport experience. And, that drives down demand (fewer skiers) and drives up prices even further. Up to a point that perhaps not even the Godzillas and King Kongs of corporate skiing cannot afford to remain in business.

Many people have reported a marked increase in congestion at VR acquired resorts. Aspen’s entry into gentrification may well accelerate the twinkly-light, gourmet-dining but over-crowded “experience”. Where you are seen in ski togs becomes more important than the quality of the on-snow experience.

crowded skiing

Shops and hotels and restaurants in these acquired areas love the increase in traffic but that increase also adds unforeseen burdens on public infrastructure. Everything from constructing parking to traffic management systems to sewage and trash collection costs more in government expenditures.

Tax increases always happen whenever governments see the opportunity. Increased taxation tends to drive out locals on the lower economic strata. Homeowners who have lived in these town all their lives can no longer afford to remain and Gentrification becomes complete.

Back in the late 70s and early 80s, the focus of “smart money” in snow sports stopped being about skiing and started being all about real estate development in the area around resorts. Now that that fad has hit the wall and slid to the floor, I see this “corporatization” as an extension of that trend. It is just that the only remaining, available real estate in a ski town these days are the resorts themselves.

Once this fad has run it’s course and the stocks in these corporate giants stagnate, what will “smart money” do? Leave? Then what?

While the costs of a season pass might go down in the short term, the long term social costs in terms of diversity may well be unacceptable and unsustainable.

We do have a feel for where the upper limit is with this Gentrification movement. The once ballyhooed ultra-posh private Yellowstone Club near Big Sky has changed hands more times than a Christmas fruit cake. As Vail and Aspen probe upward looking for that line they dare not cross, the less-than-posh can only wait and ski.

Many people herald these acquisitions as if they represent the cavalry charging over the hill to the rescue. Well, the cavalry eventually retires back to its fort and we all know what a herd of horses leaves in the yard….and who has to clean it up :/

Time will tell.

Just Sayin’….

Senior Skiers Sound Off – Vail…Beauty or, the Beast?

There doesn’t seem to be much middle ground in how folks view the Vail Resorts (VR) phenomenon. Hundreds of thousands buy the Epic Pass every year. Others bemoan VR as “corporate skiing” or “Big Skiing”. Our take on it is that the truth usually can be found somewhere in the middle.

THE BEAUTY

There isn’t much new to be said about the Epic Pass or its affect on the industry. It has been an epic success by any set of metrics. Even folks who don’t visit a VR venue now have the MAXpass, Mountain Collective and other multi-resort ticket options and prices have come down for pass products. That makes people who ski a lot, happy.

                                                vail disney

Many people who utilize a ski area acquired by VR will tell you that VR put a LOT of money into upgrades on everything from lifts to restaurants. The place looks better, the lifts are faster, and there are more customers. Everything is upscale and up-market.

There is more to do and more to see and all of that glam is now available 12 months of the year, Disney Land in mountain-minature. The actual ski experience and the price of the pass is the center for the onion. Every layer you peel through to be there has a price and it is usually not cheap.

THE BEAST

The numbers in the snow sport industry have not changed in two decades in a way that is statistically significant. 12 Million participants per year deliver 60 million visits. That’s an average of five visits per participant. The End.

kotke-demographics

Now that the resort related real estate boom is waning, If you want to grow the bottom line you have to take market share from a competitor. Then you have to  find a way to get those same numbers of people to spend more per visit.

The problem with the EpicPass and it’s competitors is that AVERAGE VISIT number…five (5). Many thousands of people use those passes to ski a LOT more than five days per year. Many of these resorts on these passes have insane prices for daily tickets.

Consider this, to hit that average of five visits, for every person with a pass who skis 100 days a season you have to have 24 people who only ski one day a year. And who exactly are those people who only ski once?

They are those people who belong to another interesting statistical grouping. They are part of the 82% who try snow sports once and never come back. Why?

For them the “value proposition” just isn’t cutting it. They paid $200 for a day of trying to hack their way around on the snow, in the snow, scattered all over the snow. Often they flail away on the bunny hill in plain sight of the school. Ever see someone walk out of the school and go over to that potential life long customer and try to close that deal, create a new life long client..Not often.

Only 10% of visit/days result in the sale of a ski school product. For many years, industry surveys reported that “self-perception of low proficiency” was a major reason that people don’t stick with it.

They quit because they suck at it and at $900 per day, lessons are ridiculously expensive.

People DO NOT plan to spend thousands of dollars on their weekends and vacations to go do things they suck at, period. When you consider that proficiency is a major factor in industry growth, you can only scratch your head and move on.

Part of this dynamic is that the lesson industry in general has the same problem with instructors that it has with participants. It is getting harder and harder to find and KEEP new instructors and the attrition in the Boomer generation of instructors is starting to gain momentum.

From the stand point of supply & demand, as the supply of instructors dwindles the price is bound to go up no matter how detrimental that maybe in the long view. But, that is a subject for an entire article so check back here for that.

In a meaningful way, the industry has trouble with growth because it indulges in strategies and tactics too short-term in nature. In effect, these antics indicate a willingness to sacrifice next year’s clients to subsidize this year’s clients. Ski school profits, in the form of high prices and low wages, are more important than long term customer “conversion” and retention.

Big Skiing…Bullseye

While the new upholstery at VR resorts is stunning, they are just deck chairs on the same old boat.

To boot, the bigger VR becomes the more likely it will become a political target. In this day and age, people want to revile “Big This” and “Big That”. No doubt, Vail is rapidly becoming the face of “Big Snow Sports”.

While the industry is full of green news and those efforts are laudable, you can’t plan for climate change. No one can accurately predict what the affects might be, or when they will arrive. You just can’t write a business plan around that.

It is far more likely the industry faces something like a “perfect storm” from an unexpected quarter. While the focus seems to be on a looming lack of snow, the greater and more predictable danger from “climate change” for lift served snow sports is a change in political climate.

It is hard to conceive of any other individual recreational sport with a larger carbon footprint. Everyday millions of people pile onto buses and trains and planes and cars and travel to ski. The places they ski consume massive amounts of electricity. Between the lift motors and the millions of twinkling lights for ambiance, the power consumption per participant is monstrous.

vail at nite
Courtesy of Wildwood Art Studio

Monsters attract attention and VR is rapidly assuming the proportions of Godzilla. VR makes a juicy target for the millions of environmentalists who DO NOT participate in snow sports and who do believe resorts in general to be an environmental blight.

The problem with VR’s size is that before with so many much smaller targets it was hard for anti-ski folks to have any impact. They would have to mount legal attacks on hundreds of individual ski areas. Now, there is one BIG target out there. The threat of the application of both environmental law and regulations, and potential legal attacks based on anti-trust law are real but, a few years down the road.

                             godzilla

To top it all off, The National Ski Area Association, and the two labor organizations, PSIA_AASI and the National Ski patrol, share the same address. With VR as the large visible target and the underlining interlocked labor associations the whole thing is based on 19th century Taylorism.

Some VR patrollers have already unionized and a Facebook page calling for the unionization of ski instructors has more than 600 followers. Ski school operational models haven’t change since Arlberg, nearly one hundred years.

                                                  hot dogs

Tone deaf to the market, proficiency is offered to the customer with the same philosophy as a candy machine. You walk up, put your money in and pull a handle and ski instructor action-figure falls to the tray.

action figure

The only competitive tool that is applied is discounting and packaging. When price is your only tool, it’s tough to make headway. Never one thought is given to redesigning the product. Creating a proficiency product that is designed by the demand side of the market, rather than top down… “Here is what we care to offer, take it or leave it” …products offered over a cash register.

To add to that problem, a growing and significant portion of :lessons: sold are really just day care and the gang of 5 year olds in a group lesson for 4 hours may or may not be there on a voluntary basis.

                                       kid school

There are other numbers plying the pistes. They, too, have not changed in a very long time. The numbers of people 24 and younger coming into the sport have been either flat or declining slightly over the last 15 years

Then, people start to quit the sport in their mid to late 30s. Some return years later, others never return. (we will address the various myths surrounding seniors skiing in a future article)

The Silent Generation is all but gone. Boomers are the industry’s only bright spot. Their participation is nearly 20% of the total visits each year. But 10 years from now that bubble of shrinking visits from those less than 24 years old today is going to hit their “core” years at the same time massive numbers of current “seniors” will be”aging-out of snowsports.

In the current vernacular of social justice, Vail Resorts may well be the last bastion of rich, white, male privilege. Skiing has always been white-male dominated. Diversity is a major concern in the years ahead.

How many potential clients are out there who will not become participants for political reasons? Hard to say but the impact of social fashion could do far more damage to the industry than climate change and in a more predictable way.

Snow sports have been in a slump. The fact that profitability may be up is immaterial to the question of whether or not that trend is sustainable. Without a steadily growing total market all this business is really just taking the same old dollars out of some other operator’s pocket and depositing in a VR account. That  doesn’t change the demographics in a positive way. It just has them spending the same dollars in a different place.

Add to all that a shrinking middle class, as the blue collar roots of the market slip away and with no successful conversion/retention efforts, and politcial/legal pressure all landing in the same 4-5 year window the failure of such a large enterprise would devastating to the entire industry.

With the Sedentary Generation on the looming horizon, new young participant may be harder and harder to find and keep., how does skiing replace the joy of sitting warmly at home and engaging the world with a smartphone?

For a many years the number of people 24 and under entering the market has been shrinking and beginning in their late 30s people begin to quit the sport all together. Those two issues could combine to produce an unprecedented loss in participation days right smack in the middle of the “core” demographic. Throw in a couple of low-snow winters in the midst of this bubble and it could spell real trouble.

Numbers haven’t changed for 20 years. In this modern world, if you aren’t growing, you are dying. The industry isn’t growing and while Vail has upgraded the deck chairs, is it an industry ship that is quietly, inexorably, sinking?

There will be more to come as we take a deeper dive into some of the issue. SUBSCRIBE and StayTuned!

Senior Ski Lessons – Grow your skills from Instructor – Coach – Consultant – Collaborator

Drop the Scoop and Step Away from the French Fry Machine!

I was speaking with a friend recently who owns a very successful restaurant…..

High end stuff. Everyone in the kitchen wears a white mushroom hat, a blur of perfectly choreographed, artistic synergy. She told me a story about how she went from washing dishes, to waiting tables to vegetable chopper, to Sous Chef, to Head Chef to opening her own highly exclusive restaurant.

kitchen staff

So, I have a question in that vein. Which are you? Instructor, Captain Fun, Consultant, Collaborator, or Co-Conspirator? Can you guess which of these makes more money? Well, good. Continue reading if the idea of more money appeals to you.

The “waitstaff” at her place spend time detailing the “possibilities” with you and your party. There are no menus. I put “waitstaff” in quotations because every person waiting tables is a qualified Sous Chef and they all rotate through the kitchen preparing the meals they designed together with you and they personally supervise the serving of the meal.

The Sous Chefs each develop their own following and schedule their own clients. They are essentially their own restaurant within the restaurant. They have a common building and common prep staff. A common mission and a common goal. Everything in between is all completely customized to each diner’s desires.

perfect meal

.There is no rush to “turn you over”. They get inside your head and help you PLAN a meal that doesn’t just taste good and look good. The meal they design with you SAYS something about YOU.

It makes you feel good about yourself because you were involved in a conspiracy with your personal chef to create the perfect dining experience. It is not just a nice dinner. It is a night in the jet-set life.

burger
Raise your hand if this looks good

It is a universe apart from a lukewarm, pre-prepped burger and cold fries dropped into a bag—without a napkin or a straw— and heaved at you through a window.

Does it cost a lot more? Of course it does. You don’t mind spending the money on the meal, because it is more like spending money ON yourself, spoiling yourself. It is NOT the mere intake of sustenance. It is pampering yourself.

It is immersing yourself in a soul-satisfying, sensory swirl of sights, sounds, flavors and aromas created just for you by your personal Chef. We senior skiers like that idea 🙂

It’s the difference between a two minute morning shower and a weekend at the spa in Napa. It is the difference between a candle lit bath for two with champagne and rose petals in wonderfully hot water..versus washing your hands at a gas station.

tub  bathroom sink

The business of delivering snow sport instruction has this same range of customer experiences.

How do I know? I have seen the instructional version of french fries hurled through a window too many times. I have also seen instructors who are delivering that hot bubble bath.

I have seen the industry studies that say just shy of 70% of people surveyed immediately after a lesson either “would not” or, were “not likely to” recommend taking a lesson to family or friends.

I know there are instructors out there CONSPIRING with their CLIENTS to conquer the mountain together, to not merely ski better than their friends, but to embarrass them 😉

I know there are instructors who suck. I know many who actually know what they are doing but don’t really care. I know a LOT who know what they are doing and work hard to help clients improve but that is just Prep Cook stuff.

People don’t come back to your restaurant because you do a good job slicing their vegetables. I would know this even if I had not seen it. All human behavior operates on a bell shaped curve. Some suck. Some excel. Most fall in between the extremes.

The only question that means anything is, “What can be done to skew the curve in a positive direction. What is the six sigma strategy?”

The attributes and quality of relationships with customers run along a continuum that transcends vertical industries. Snow sport instruction is no different than selling software or food.

used car sales

Some people you deal with will sell you software over the phone and really don’t know much about it. Other sellers of software spend time with you and your company. They know your business almost as well as you do.

They know your problems and might even recommend someone else’s product if they think it is the solution to your business problem.

They have invested themselves in your enterprise.

YOUR success is THEIR success.

The relationship transcends mere seller-buyer. They are co-conspirators. It’s you and them against the world and they are going to help you sneak up on your competitors and club them over the head. It’s tag team , Baby! You and your client vs the Hulk and Al’s Run.

tag team

Most sales people you deal with are there in front of you to solve THEIR problem, their quota. If your next student EVER gets the feeling that you are there with them to “deliver a lesson”, you are toast. Senior skiers are VERY discerning. They have many decades of experience with people trying to bullshit them. Don’t even bother to try!

What IS the product we are selling? Lessons? Nope, selling lessons isn’t any different than the kid who spends the day getting your hot dog off that little Ferris Wheel machine and dropping it in an over-steamed soggy bun.

Is it “proficiency”? Not really, lots of people are insanely proficient at doing things they hate to do.

Is it “fun”? There are too many things that are more fun than ski lessons. DOn’t invite comparisons. Seems like that word, “FUN” is in every other paragraph, in every instructors manual on the planet. Probably Mars & Venus, too.

Lots of people who have fun skiing quit when they start having families. It might be fun but they can’t or won’t spend the money on it. Even if they do, they don’t go often.

 

snowman
from The Falcon & The Snowman

If you are thinking like a drug dealer, you may be on the path to professional perfection. It ain’t about lessons. It ain’t about “proficiency”. It is about giving your clients “a taste”.

Give them that first needle full of snow and you’ll own them. Get them hooked on snow and they will be hanging around the street lamp outside your door at 3am waiting to score another dime.

You aren’t there to “teach” them. You are there to INJECT them with a craving that can never be satisfied. So, stop schlepping around the locker room and go build your own little Psychedelic Shack.

In the next installment we will examine the attributes and behaviors involved in the various levels of relationships and open the discussion of how to move up the snow sport instruction food chain.

We’ll examine why the PGA requires their pros to pass their business curriculum and ask why most bodies who govern snow sports instruction around the globe do not. So, let’s go! Darwin is a busy man so let’s not waste his time…..

 

Nurture Your Inner Skiing Geezer….

 

 

Growing older is a goal we ALL share.

Wouldn’t it be nice that when you reach 40..50…60…70…80…90 , the snow sport industry would still be interested in you senior skiers as an active participant? You may not consider yourself a senior skier now but you WILL be one day. Why wait until the last minute to insist the industry will want you around?

In the 1940s and 50s, from coast to coast an idea sprang from the mountains. My father’s generation returned from WW II in Europe with a notion and built the American ski areas. My generation, baby, our generation, built the industry as we know it today. Yet, if you pick up nearly any ski-related periodical or surf the web, you might get the notion that skiing is illegal for anyone over the age of 25

                                                 .th-52

According to the AARP, seniors control 70 percent of the world’s wealth. That makes seniors the third largest economy behind the US and China. In the US alone, the 100 million seniors represent $200 billion dollars in disposable income. They spend 20 percent—that’s $40-billion—of that on their kids and grand kids. Seniors who ski or board spend a lot of money on their families!

We take our families on winter vacations, pay for their lodging, buy the lift tickets and often, rent or buy their equipment. In the immortal words of Richard Gere in Pretty Woman, “We are going to be spending an obscene amount of money in here. So, we’re going to need a lot more help sucking up to us…’cause that’s what we really like.”

It turns out the seniors skiing is worth a lot to the industry!

kotke-demographics
Which demographic is trending up? Yep…Seniors          Credit:NSAA

( for more analysis, go to: The Wrinkled Irrelevants?

As an age group, we spend 27 percent more time on the mountain each season than any other group. By 2030, there will be 34 percent more people in the 50-plus age group than there are now. Nielson calls us, “the most valuable generation in the history of marketing” but also say less than five percent of all advertising targets our age group. HEY! Ski industry! Time to get in a little practice on seniors skiing, maybe?

 

Ever since the unfortunate industry report that the senior skiers who built and supported the  industry for the last four decades would be dying off in large numbers, the industry has treated the senior skiing segment as a lost cause. As if we are the last seniors to walk the Earth.

cropped-th-72.jpg

Their focus on the 24-40 year-old segment may appear to make sense from an economic perspective, but the industry is being more than a bit short-sighted.

Barring an Extinction Level Event, those young whippersnappers are aging, too. Time for the industry to gain some valuable experience in hanging on to the one demographic that will always control the bulk of disposable income. Yep, you would think so, wouldn’t ya? You would be wrong

(for more on skiing for cheap, go to: Skiing on the Cheap

hippy sit in

Take heart, active, sporting Boomer skiing souls! All is not lost. If you could take over the Student Union in 1968, you can handle a few ski bums. In the upcoming series of articles, we’ll take a look at resorts with successful senior-focused operations in “Right This Way Ma’am, Happy to See You Again”. We’ll show you how to handle a resort deaf and blind to the needs of seniors with “A Girl Scout Could Handle this Outfit”. Once you have your mountain under control, we’ll show how to wring the last ounce of joy from the slopes with “How to Shred for the Nearly Dead”. See ya up the road a piece. Talkin ’bout my generation…Peace….

Have Senior Skiers Been Abandoned? The Wrinkled Irrelevants…

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You just gotta give this picture a Like and a Share!

My fellow Geezers, we brought this on ourselves. Back in the Hey Days of the 70s and 80s, we represented the youthful exuberance that was the core of the sport. To this day, thanks in part to us, The Industry still sees itself as youthfully exuberant. In the following quote from Snowsports Industries America (SIA), they write seniors skiing off and turn to face a youthful market.

“… Nowadays, they (Boomers) are encouraging grandchildren to ski and snowboard and are buying snowsports gear for the family. Although as participants, they were once prolific; as a target audience today their roles as elders in the family are most likely more important than their personal participation behavior in snow sports….”

That is a bold statement in light of the findings of the National Ski Area Association’s study represented in the chart below. The Industry still expects you will encourage young people to participate, buy their gear, and pay for their winter vacations.

They just aren’t encouraging YOU, the senor skier, to participate. You’re done, washed up. The Wrinkled Irrelevant. And yet, we ride an average of 26.7% more days per season than The Industry average.

The ongoing issue is the way in which the industry chooses to define itself, by “generation”. A handy pigeon hole perhaps, but it is strategically misguided.

The SIA DCIP document identifies senior skier/riders over 55 as making up 10% of the total market. Yet, when drawing their conclusions, they say that Boomers make up only 5% of the “downhill” market. Which is it, 5% or 10%? Don’t confuse yourself. This ain’t Common Core. It’s Common Sense.

The chart shows the 55+ market segment is holding 16.7% of the market. That is significantly more than SIA’s 10%. I would go with the NSAA numbers because the ticket window gives them the best view of the market.

The chart also shows that the only segment that has grown over the last 10 years is…Geezers. The SIA’s ballyhooed youth under 25 have declined 5%. That suggests SIA’s assumption that seniors are bringing their grandkids to the sport may only be wishful thinking.

kotke-demographics
On the other end of the spectrum, folks 55 and older have increased 5.5%. It is significant that the average age of snowsports participants continued to rise to 38.4. Most importantly, the total market is comprised of individuals who are all continually aging. Here is a senior skier in all of use just waiting to emerge!

The Industry loses nearly 20% of its market between 45 and 55 years of age. I would call that a “magic moment” for a marketing opportunity!

Studying the chart, The Industry loses 19% of its customers between 45 and 54. Physical, psychological and economic issues related to aging have a dramatic effect on the senior skier’s decision to remain in our sport. We get promoted. We sit behind desks. The kids need cars and tuition for college. It piles up and the sport loses a customer.

This severe drop out happens 20 years before The Industry is willing to tell itself that aging is a business problem and address it.

When you do reach the magic age of 55, The Industry is willing to tell itself that seniors skiing isn’t relevant? I will suggest that with advancements in equipment, technique, medicine, and health maintenance, a 45-year old skier has 30 years or more of participation left. Is The Industry willing to write off senior skiers with 30 or more years left as customers? The evidence is clear that it is.

The Industry is working hard to bring fewer and fewer young people into the sport only to glibly let them slip away as they age. That is strikingly, irrevocably myopic.

Continue reading Have Senior Skiers Been Abandoned? The Wrinkled Irrelevants…