Bucking the trend in a downturn economy

Editor’s Note:
Throughout the year, the Crested Butte News
will ask various members of the community to take the
lead on Page 2 with a guest editorial. Being this is the
start of the 2008-2009 ski season, we felt it appropriate
for Crested Butte Mountain Resort Chief Operating
Officer Ken Stone to share his thoughts with the
community. Have a great Thanksgiving weekend
everyone and here’s to a sweet season on the hill…
Mark Reaman

We are all certainly facing the effects of an
uncertain economy and everyone is looking for
answers. As President-elect Obama assembles
his new economic team and prepares to implement his economic recovery
plan, the country waits in hope. Entering into this winter season we
need to understand the direct effect the current economy will have on
Crested Butte and what the impacts might be to our collective community.
As the new chief operating officer for Crested Butte Mountain Resort,
I have been working with our management team to make business
plan adjustments based on projections from our current hotel and airline
booking pace. At present we are tracking down 8 percent in lodging pace
and 15 percent in inbound airline seats to last year. This is far better than
we are hearing from other Colorado resorts who are reporting being
down as much as 30 percent in central reservation bookings.
This kind of decline in visitation can have devastating impacts to
larger resorts such as Vail that are compounded in the surrounding communities.
The Breckenridge Town Council recently contributed an extra
$250,000 from reserves to the Chamber Resort Association for marketing,
citing an expected loss of $38 million in lodging, retail and restaurant
revenue this winter. Anticipating similar losses, Intrawest Corp., which
owns Whistler/Blackcomb, Steamboat, Copper Mountain, and Winter
Park, has announced layoffs at all of their resorts. Rob Katz, CEO of Vail,
said, “We’re rapidly going from the highest of highs to the lowest of lows
in a very short time period,” comparing the strong growth in Vail Resorts
last season. Looking at the entire ski industry for this winter, Crested
Butte is somewhat bucking the trend.
Although everyone at CBMR is concerned with the current booking
pace, we are also seeing positive changes in our customer profile with
a longer length of stay and higher spend per reservation. Part of this is
due to realigning our marketing and brand message and having a more
focused advertising plan. We also have some padding with strong group
bookings prior to the decline in reservations this fall. Another answer
to why we are doing better than other ski resorts is the fact that Crested
Butte offers the best overall value for a winter vacation in Colorado. Not
just price but value.
In recent weeks we have seen aggressive discounting from our
competitors. They have dropped prices drastically on lodging packages
to the point that it would be impossible for Crested Butte to compete at
the same price based on our volume.
Last year Crested Butte saw 416,000 skier visits at a very low yield
per guest. To try to compete in the past we would attempt to build more
volume by offering lower prices, free skiing and discount coupons,
without much success. It was said to me jokingly by the past CEO of
CBMR, John Norton, “We are the low cost, low volume leader in the ski
industry.” As we all know, that is no place to be. It just doesn’t work.
The business plan for CBMR has changed from our past deep discount
model to a value added strategy. This change in tactics could not
have come at a better time. To compete successfully with the larger resort
conglomerates, we need to differentiate the Crested Butte experience and
focus on other metrics rather than just skier days.
With this significant change in our business model comes a greater
responsibility to our guests. To be successful at lower volume than our
competition we need to build value in our products and services and
charge fairly for them. With the investment that Tim and Diane Mueller
have made in the resort, we have a good start on providing a better product.
The new lodging and conference center at Mountaineer Square and
the renovation of the Elevation Hotel have allowed us to attract high-end
groups and more affluent guests than before.
The emphasis at CBMR is to be more guest-centric in everything
we do. We have invested in improving the base area facilities and the
culinary program throughout the resort. We have spent capital dollars
on better technology to improve ticketing and service delivery in our
hotels. The kids’ ski school program and facility has been completely
redesigned. We have also invested in our employees with new training
programs and guest service support.
As we enter one of the most challenging economic times in our
history, we are making adjustments to match the lower expected business
levels. We will need to be more efficient and find cost savings and
conserve energy throughout the resort. We need to look for additional
savings without lowering product quality or service levels. We also need
to find more revenue opportunities when guests are here. All of our employees
are looking to add value for our guests and find ways enhance
their vacation experience. By suggesting a day of on-mountain guide
service, a spa treatment, a private ski school lesson, a dinner sleigh ride
or extra day of kids’ ski school we add value to our guests’ experience.
This same type of thinking needs to extend throughout our community.
In order to be successful we will all need to look for opportunities to
enhance our guests’ experience by allowing them to spend more money
on things they see value in. An extra purchase in a retail store or bottle
of wine at dinner will all add up and help create a positive memorable
experience. As our branding relates, Crested Butte is about our colorful
small town spirit and making genuine fulfilling connections. If we
focus on adding value as a destination and community rather than being
cheaper, we will all have the best opportunity to be successful and keep
on bucking the trend.

-Ken Stone
Chief Operating Officer
Crested Butte Mountain Resort