Will snow cure all?
November 20, 2008
TAHOE CITY ” According to the Mountain Travel Research Program, ongoing bad economic news during the month of October had a negative effect on consumer confidence with a drop by 36.5 percent, reaching its lowest level since being established in 1985.
The October Mountain Travel Monitor noted that in addition to the drop in consumer confidence, the financial markets have remained volatile and the recent legislation to stimulate the economy has yet to find any measurable influence on consumer spending. Retail sales dropped 2.8 percent during the month and eclipsed the previous biggest decline in sales of 2.65 percent recorded in November 2001.
“Unfortunately, all of the bad news in October may be causing some historically resilient guests to remain on the sidelines by deferring their decision to make reservations or by generating increased cancellations,” said Ralf Garrison, author of the Mountain Travel Monitor Report.
“Discretionary spending was the fuel that funded leisure travel in recent years but the phase is practically an oxymoron these days as cautious consumers curb their spending,” he added.
Garrison’s report observed that the uncertainty facing consumers will likely have several outcomes for mountain destinations this winter.
Although the influence of snowfall can be considerable, its ability to “trump” consumer confidence and recessionary forces is uncertain. Historical data for skier visits supports this theory but its positive impact may not apply equally to all segments of the market.
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Local season pass holders can and do react to abundant snow on very short notice without incurring any additional expenses. However, destination guests often book well in advance based on schedules and pricing, and these guests are often much less responsive to snowfall as the winning trump card.
“In a recent informal poll of un-booked destination guests who typically spend considerably more on their vacation than day skiers and season pass holders, they were much more concerned about economic factors than snow conditions,” said Garrison. “In fact, they considered good snow conditions a ‘given,’ so heavy snowfall may not deliver the influx of visitors that many resorts have come to expect in good snow years,” he cautioned.
In assessing the situation in the Mountain Travel Monitor, Garrison concluded that “It probably isn’t wise for mountain resorts and lodging properties to depend on Mother Nature for fiscal security, viability, and stability.”