Weather Remains a Wild Card for 2012-2013 Ski Season
On December 24, 2012, Condor Capital releases a forecast on the remainder of the 2012/2013-ski season. As the season unfolds, snowsports brands and winter sports enthusiasts are worried about a repeat of last winter when sparse snowfall across the country led to a 15 percent decrease in ski visits.
Although the economy is improving and consumers appear willing to spend on new equipment, apparel, and travel to ski destinations, the wild card is always the weather. Meteorologists have been challenged this year with long-term forecasts. In recent years forecasts have been influenced by El Nino or La Nina weather pattern, which typically brings fairly predictable patterns regarding temperatures and snowfall in various parts of the country.
With more uncertainty in forecasting models, Ken Schapiro, president of Condor Capital suggests skiers track shorter-term forecasts and to take advantage of good snow conditions when they arrive.
Although the 2012/2013 season has started slow, snowfall totals in the western-U.S. and Pacific Northwest have improved. In Colorado, Vail has received several feet of snow since early-December, with more in the forecast. At Canada’s Whistler-Blackcomb resort, managers have noted that the area had the deepest snow base at that point in the season in 10 years.
Northeastern resorts continue to struggle with a lack of snow and warm temperatures that hinder snowmaking efforts. In many locations, poor snow conditions have pushed back openings at some resorts and left others operating with limited trails.
According to Schapiro, early reports from retailers and resorts have been mixed. Although season pass sales were tracking 17 percent ahead of last year early in the season, Vail Resorts recently reported that season pass sales are now up just 5 percent year-over-year. Schapiro suggests that pent up demand by hardcore enthusiasts drove the initial pop in sales, while other skiers, with last season's disappointment still fresh in their minds, may have waited for more-tangible signs of a good snow season before making their decision to commit to a pass.
Skiers have also taken a wait-and-see approach towards booking ski resort vacations. According to The Mountain Travel Research Program, which collects data on Western resorts, bookings for this season are down 3.9 percent year-over-year. Schapiro notes that even in normal years less than half of bookings are typically made by this point in the season. If snow comes, mountain resorts still have time to enjoy a successful season.
Booking trends have been widely varied with December down double digits but February showing some gains. Schapiro attributes this to skiers focusing their trips on the "core" of the season, rather than taking a chance that resorts will be fully open during the early- and late-season months. For snowsports enthusiasts, resorts may begin to offer discounts and package deals to turn intention into purchase.
From the perspective of snowsports brands, last year’s dismal season has significantly slowed sales of new equipment. Amer Sports (parent of Atomic, Salomon, Arc'teryx) recently reported a 15 percent decline in sales in its winter sports equipment segment. This was driven primarily by a steep decline in retailers' preorders and later delivery schedules, as many stores remain saddled with excess inventory left over from last season.
In a report by the SnowSports Industries America (SIA) the Leisure Trends Group estimated that inventories were up by 30 percent in the apparel and equipment category at the end of last season. However, after strong pre-season sales, inventories for the category are now tracking just 11 percent ahead of last year.
Schapiro believes that if weather conditions improve, an improving economic situation will ease consumer’s previous reluctance to spend on new equipment. Schapiro notes, the national labor market has seen slow, but steady, improvement since the beginning of the year. Over this time frame, the unemployment rate has declined from 8.5 percent to 7.7 percent and the private sector has regained nearly 1.7 million jobs overall.
If Mother Nature cooperates, Condor Capital expects overall skier day numbers to improve compared to the 2011/2012 season.
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