For years bordering on decades, we’ve wrung our hands over the issue of increasing participation. There’ve been programs and research and money spent. Maybe without those programs things would be worse. But so far, they don’t seem to have moved the needle the way we want.
We’ve got financial, demographic, and climatic factors in the way of a long-term increase in participation. In the aftermath of a great season, it’s hard to ask anything besides, “How can we increase participation?” That sounds to me like the goal- not a helpful question. Helpful questions address issues impeding achievement of the goal and frame the problem to allow the issues to be addressed. I want to ask what I think some of those questions are. I hope you find the exercise helpful and that you might respond by asking some questions I’m missing.
Question One: Who’s “we?”
At countless trade shows over decades, I’ve watched heads nod as somebody suggested that “the industry” should fix some problem. The one that went on the longest is probably the skateboard discussion about how “the industry” should “fix” distribution. I said in writing, and I think I might even have been foolish enough to stand up and say in one meeting, that distribution wasn’t “broken.” It was responding to market forces and that each company was going to do what it perceived to be in its own best interest. I seem to recall engendering serious silence and I sensed a profound hope that I would just go away.
Trade shows and their associations have a role to play in education, research, charity, representing us as a group, getting us together and sharing information. But the industry and its associations as a group are not going to rise up and increase participation. When we say “we” it implies a business dynamic I don’t think exists.
Question Two: How much snow is there going to be?
The consensus seems to be that there will be shorter seasons and less snow. I have no idea how quickly this is going to play out, recognize there will be regional variations, and know resorts are doing what they can to ameliorate it with snowmaking. But my sense is it’s already happening. Less snow and shorter seasons mean less participation unless we can squeeze more people into a smaller space and shorter seasons. But with what impact on the quality of the experience? Seems like some of the multiresort season passes are already causing that to be explored.
Question Three: Participation in what?
Question three flows directly from questions one and two. Mountain resorts are getting 15% of their revenue from summer activities. I expect that to grow. Depending on how we define “we” (see question one) participation may mean different things.
If you exclusively make skis, snowboards, boots, bindings and other forms of hardgoods, all you’re focused on is people who actually slide down the hill. Participation to you is snow sliding and nothing else.
The SIA/NPD data for the period from August 2018 through February 2019 puts total snow industry retail sales at $5.774 billion. Of that amount, $1.813 billion, or 31.4% is what I’d characterize as hardgoods includes boots, boards, skis and bindings as well as other product. $393 million is “winter snow shop services.” That is roughly the group for whom participation means snow sliding nearly to the exclusion of other markets.
What about the other 67.6% of industry revenue? Some piece of that revenue from apparel, footwear and accessories is obviously specific to snow sliding, but a lot isn’t. The brands that sell product not specific to snow sliding customers have a lot more flexibility in reacting to market changes. It might be fair to call them active outdoor brands rather than winter sport brands. What their customers participate in goes beyond snow sliding. It’s not just brands, but mountains that are becoming that way.
With more data I could slice and dice this further. What I hope is the obvious point is that “participation” means more than just snow sliding to many of the companies who are part of that market. They are focused on increasing participation to a greater or lesser extent, depending on what else their customers participate in. We’ve proven that certain industry alliances and information sharing can be valuable. But I keep coming back to the idea that each company is going to do what it perceives to be in its own interest.
Question Four: Who will our customers be?
We all acknowledge that there will inevitably be fewer, and then no, baby boomers on skis and snowboards. That’s not to say they won’t come to the mountain, but it won’t for snow sliding. We’ve watched mountains improve their amenities to reflect the aging of this population and the fact that many of them are pretty well off. Perhaps new boomer preferences have something to do with the increasing mountain resort summer focus.
Last December, I wrote this article called, “What if Our Customers Just Don’t Have as Much Money to Spend?” It links you to an article in New York Magazine called “Millennials Aren’t Post-Consumerist, They’re Just Poor, Fed Finds” which in turns provides a link to a Federal Reserve study of fifty or so pages that lays out their findings.
Within the last week I’ve seen a Bloomberg article that said 59% of Americans live paycheck to paycheck. I imagine most of you saw last year’s statistic saying that 40% of Americans can’t get their hands on $400 in an emergency.
Meanwhile, lower and middle class real wages haven’t increased significantly over decades while the National Ski Areas Association in its Economic Analysis of United States Ski Areas for 2017-2018 reports revenues are up 42.6% from the 2007-2008 season (see Elizabeth Whalen’s excellent article on the analysis in the May issue of SAM Magazine). I don’t think that revenue increase is adjusted for inflation, so it’s not a perfectly fair comparison, but I doubt I’ll get anybody arguing that the costs of snow sliding haven’t gone up faster than lower and middle class incomes.
Neither demographics or economics paint an encouraging picture for growing participation if the industry remains structured as it is now and consolidation continues.
John Fry wrote an analysis in the March issue of SAM, in the “Letters” section, in which he pointed out that the cost of a lift ticket is up 30x since 1970, while personal incomes are up 3x. He suggested that’s not a good situation for an industry seeking to increase participation.
Question Five: Where do people learn to snow slide?
Back in the 90s, I use to drive up to what’s now known as The Summit at Snoqualmie around mid-day and buy their half day pass for around $20.00. Maybe it was $15. Maybe $25. The point is I didn’t have to plan or commit a lot of money. And it was a perfect place if you were just starting.
I hypothesize that most people prefer to have their first experience somewhere low risk, convenient and inexpensive. I mean, if you’ve got a friend who want you to go to Vail for a week with them, you can afford it, and are convinced you must learn to snowboard, great! We need more of you.
When I used to do the SAM article on the Economic Analysis, I noted the decline in the impact of smaller- “feeder” if you will- areas. The number of resorts has been around 480 for years, but consolidation doesn’t favor the small fry. More and more, they are becoming community-owned or non-profit, or both.
At an even more micro level, I remember fondly some very early experiences on snow where we used coasters and sleds on a local golf course. We had a wonderful time jumping the snow-covered sand traps. What do you think the chances are that the golf course’s attorney and insurance agent are still letting that happen?
Question Six: Now What?
I know what I’ve written is a kind of gloomy assessment, and I look forward to people telling me why I’m out of my mind. That’s the only way I learn anything. I believe confronting reality is the first step towards dealing with it.
Based on my five questions, I’ve got a couple of suggestions- not in any order of importance.
First, how about we identify the between 50 and perhaps 200 companies (excluding the resorts/ski hills themselves) that most directly produce product used exclusively for snow sliding and get them together. The common interest would be very strong. I know, I know- “Great, another damned meeting.” I’d like to see an approach like Shop Talk takes. Perhaps that would be productive.
Second, the mountain resorts need to stop start thinking of themselves as winter resorts and model their businesses as year around resorts. That kind of thinking is well underway at many mountains. There’s nothing more refreshing than year around cash flow.
Third, the conglomerates, who I am sure already aware of its importance, need to partner/consult with/cobrand/buy/support the feeder resorts where it’s reasonable they will be able to survive changing climate. We need those places. We have to have places where it’s convenient and cheap to try snow sliding and then to come back and try it again.
Fourth, I’m concerned the research hasn’t been as rigorous as it needs to be. We’ve all got opinions as to why people never try snow sliding and why they don’t come back. There’s a certain common knowledge that has formed around the issue that’s generally accepted. It’s an “everybody knows” kind of thing. Except I don’t know if we do know. I’d like to follow 100 (500 would be better) first timers through their first experience and for six months after in rigorous detail and see what we learn. If that’s already happened, I’d love to hear from you.
I’m told there was a Beginner Conversion study, which was abandoned after 5 years. They had 25-30 resorts participating, but the tracking proved difficult.
Look, we all seem to think we know the reasons people don’t take up the sport or return, but we can’t seem to move the needle, so do we really know? If we do and we can’t move it, what should we conclude?
I don’t know for sure that the best research that can possibly be done will turn up “THE REASON” or reasons people don’t try snow sliding and why they mostly don’t come back after the first try. Perhaps the motivations are a complex mix of different factors that vary between individuals. In other words, as is often the case, our collective wisdom is largely correct.
It might almost be liberating if that were accurate. Maybe some part of the answer, given the issues I’ve tried to raise is to focus on getting people who have some money, in groups of 2 to maybe 5 or more (so they have company) to the local hill. Could we identify potential customers who meet those qualifications before the season starts and have them all set to go on adventure with some friends? Just thinking out loud here.
Now, we’ve had an epic season. Everybody feels positive (as they should). We’ve evolved our business thinking so that a great season doesn’t engender outsized orders causing, when the next season isn’t so epic, big markdowns, high end of season inventories and a product devalued in the customer’s eye. We’ve mostly decided that high margins and clean inventories are better for the bottom line than a few incremental sales.
This is no time to rest on our sense of satisfaction. I know that even asking these questions implies some uncomfortable things. But how do we not ask them if we want to work to solve the problem? I can guarantee that those of you just hoping these annoying and inconvenient changes in our industry model will go away rather than addressing them are going to be going away yourselves.