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Colorado: Vail Resorts says mid-winter business rebounded

Major capital investments announced for upcoming seasons

Vail Resorts is talking up the Peak 6 expansion at Breckenridge as part of its capital investment plan for the coming season.

Vail Resorts is talking up the Peak 6 expansion at Breckenridge as part of its capital investment plan for the coming season.

By Summit Voice

FRISCO — Vail Resorts said business bounced back after a slow start to the season, with some of the company’s resorts posting record business during the Christmas holiday period. VR’s net income climbed 30.5 percent, to $60.5 million in the second fiscal quarter compared to last season, with skier visits up 2.9 percent and mountain net revenue up by 9.5 percent.

“We are very pleased with our performance in the second quarter of fiscal 2013, which was notable for two distinct dynamics we experienced in the quarter,” VR CEO Rob Katz said this week during a call announcing the company’s second quarter earnings. “The first was our results through the middle of December, which were marked by unusually warm and dry weather in Colorado that limited the terrain we could open, leading to lower than expected results for our four Colorado resorts.  Continue reading

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Forest Service to address the tangled status of ski area water rights with a public process

Federal court ruling sends agency back to the drawing board

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The U.S. Forest Service will hold a public process to develop a new agency guideline for adminstering water rights at ski areas operating on public lands. Bob Berwyn photo.

By Bob Berwyn

SUMMIT COUNTY — After being rebuffed in federal court, the U.S. Forest Service will start anew at developing new water-rights language for ski area permits. The agency plans to start taking public input this spring on the new directive, which would clarify ownership of water rights on national forest lands.

The Forest Service most recently issued a new water rights directive in Dec. 2012, aiming to establish that certain water rights have to remain linked with the ski areas where the water is used to ensure the long-term sustainability of the resorts.

The ski industry interpreted at least parts of the new directive as a direct grab of water rights that are properly administered under state water law. A year-long lawsuit ended in Dec. 2012 with a court telling the Forest Service it must use a public process to develop a new directive.

“The agency’s announcement and the agency’s recent policy that was struck down in federal court both assume that water should run with the land. This approach reflects a fundamental misunderstanding of water law in the West,” said Geraldine Link,  public policy director for the National Ski Areas Association.

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Colorado ski industry should embrace wolverine restoration

Bob Berwyn.

Bob Berwyn.

Opinion: Obstructing conservation runs counter the interest of most skiers

By Bob Berwyn

FRISCO — The upcoming listing of North American wolverines as an endangered or threatened species has huge implications for Colorado, and also gives the Colorado ski industry a chance to work off some of the bad karma it earned for opposing the reintroduction of lynx to the mountains of our state.

Wolverines are largest member of the weasel family and need rugged alpine terrain covered with deep snow to reproduce. Sometime soon, within the next few weeks, the U.S. Fish and Wildlife Service will announce its listing decision, with the best available science suggesting that global warming is likely to reduce habitat for denning and breeding to the point that it will threaten the existence of the species.

That’s were Colorado comes in. With more high-elevation terrain than any other state in the Rockies, and plenty of steep, remote brush- and rock-strewn avalanche paths, our mountains could be a climate refuge for the animals, according to conservation biologists working on recovery plans for the rare critter. Continue reading

Ski industry wins water rights lawsuit against Forest Service

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A judge rules this week that the Forest Service can’t force ski areas to transfer water rights to the federal government. Bob Berwyn photo.

Judge orders Forest Service to go back to the drawing board on developing permit language to govern water originating on national forest lands

By Bob Berwyn

FRISCO — A long-running dispute over water rights at ski areas operating on public land was resolved — at least temporarily — this week, as Federal District Court Judge William Martinez ruled that the U.S. Forest Service violated its own regulations and other federal laws when it adopted a new water rights clause to be added to ski area permits.

Martinez stayed away from the takings issue raised by the ski industry, but slammed the Forest Service for issuing a new rule without providing a chance for formal input and public comment. Read the ruling here.

He vacated the water rights clause, enjoined the Forest Service from enforcing it and remanded the matter back to the agency for further action to be guided by the court ruling. Specifically, Martinez said the Forest Service failed to develop the new water rights clause under formal public processes required under federal regulations.

He also ruled that the Forest Service violated federal regulations because the agency did not evaluate the economic costs of forcing some smaller ski areas to to assign their water rights to the Forest Service without compensation.

“Given how critical and valuable water is to ski area operations, we are pleased that the court has stopped this unreasonable and unlawful policy in its tracks,” said Michael Berry, president of the National Ski Areas Association. “We look forward to working in cooperation with the Forest Service to develop a water policy in the future that respects property rights and state water law.” Continue reading

Skiing: Sandy dampens early season gear sales

Uncertain snow, looming fiscal cliff make for shaky retail outlook

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Hurricane Sandy had a huge impact on early season ski gear sales. NASA Photo.

By Summit Voice

FRISCO — Coming on the same day that NOAA announced that 2012 will most likely the warmest year ever in the U.S. and a study describing the cost of global warming to the ski industry, another report suggests that the climate disruption from Hurricane Sandy was a factor in an early season sales decline.

SnowSports Industries America announced that sales for the August through October period were down 2 percent compared to last year. For October alone, sales declined 5 percent from 2011.

Sales of snowsports-related gear totaled $616 million, the retail trade group said, acknowledging that Hurricane Sandy caused significant disrutopns in the South and Northeast. Uncertainty in the face of the fiscal cliff, and lack of momentum from the snow-challenged 2011-2012 season presented additional challenges.

In late October, Hurricane Sandy disrupted lives and retail sales with blizzard conditions, severe flooding and wind damage to much of the Eastern Seaboard. In the South and Northeast regions retail was shut down for days. Continue reading

Report: Ski industry sees $1 billion in global warming losses

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Global warming likely to inflict significant economic losses on ski industry. Bob Berwyn photo.

Costs expected to mount as temperatures rise

By Summit Voice

SUMMIT COUNTY — A new report on the economic costs of global warming to the ski industry will resonate especially loudly during Colorado’s second consecutive early season snow drought.

With the state’s major ski resorts struggling to open just minimal amounts of terrain in time for the busy Christmas holiday season, two University of New Hampshire researchers estimate that the $12.2 billion industry has already suffered a $1 billion loss and dropped up to 27,000 jobs due to diminished snow fall patterns and the resulting changes in the outdoor habits of Americans.

More than 23 million people participated in winter sports during the winter 0f 2009-2010.  Snow-related economic activity resulted in $1.4 billion in state and local taxes and $1.7 billion in federal taxes.

The economic study was prepared for the nonprofit groups Protect Our Winters and the Natural Resources Defense Council. The two organizations have partnered the past few years to raise awareness of climate-change impacts to snow-dependent mountain communities and snow sports industries. Continue reading

Vail Resorts dials back earnings expectations

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Will the early season snow drought affect Vail’s bottom line? Only time will tell. Bob Berwyn photo.

Colorado’s second consecutive early season snow drought may be affecting pass sales and advance bookings

By Summit Voice

FRISCO — Vail Resorts stock swooned a bit, but then started to recover, after   CEO and chairman Rob Katz, said this week that it may be a challenge for his company to achieve its previously stated earnings goals.

MTN dropped as much as 12 percent and ended the day down 8 percent, at about $52 per share, after Katz said that early season booking trends are not as strong as they could be. The stock price started to recover Wednesday, climbing back up about 2.5 percent, perhaps with investors, just like skiers, taking a wait and see attitude.

That was Katz’s line, too, as he told investors that the holiday season will likely tell the tale.

“We will know more about the season after the holidays and intend to address our fiscal 2013 guidance when we release our ski season metrics in mid-January,” Katz said in the earning statements released to investors early Tuesday morning.

For the first quarter of fiscal year 2013, the company reported a net loss of $60.6 million compared to a net loss of $55.7 million in the same period in the prior year, a decline of 8.7 percent.

Season passes helped drive revenue in the quarter, with sales to-date (including 4-Packs) up about 5 percent in units and approximately 8 percent in revenue compared to the same period in the prior year, and adjusted as if Kirkwood were owned in both periods.

But lack of early season snowfall in Colorado may be affecting overall sales. Katz said current weather conditions are a concern for skiers who have delayed their pass-purchasing decisions.

“The total growth of the (pass) program is slightly below our expectations, as we believe that the amount of sales that we pulled forward to earlier selling periods was somewhat larger than expected,” he said. “Sales in Tahoe and international markets continued to show the most strength. We expect the final results of the program will be generally consistent with these percentage increases as final sales conclude in the coming weeks,” he added.

Overall,  lodging reservations are slightly down from last year, but a kids-ski-free with lodging program at Keystone has helped drive strong early bookings at that Summit County resort. Based on historical averages, less than half the winter season reservations are on the books this time of year.

With the ski season just ramping up, Katz said the earnings figures from the first fiscal quarter generally reflect late summer activity at the company’s properties, and that there were “positive trends” in summer mountain and lodging operations, with improved visitation driving increased revenue from summer activities and dining.

The company sold four luxury condos at the Ritz-Carlton Residences in Vail and reported a positive net real estate cash flow of $5.5 million for the quarter.

A test drive for the sustainable ski industry model

Grassroots group strives toward sustainable ski industry.

Mountain Rider’s Alliance partners with sustainable engineering group to refine vision

By Bob Berwyn

SUMMIT COUNTY — The Mountain Rider’s Alliance vision for a sustainable ski industry is about to grow some flesh and bones, as the grassroots group partners with a well-known engineering firm to develop specific plans for carbon-neutral, net-zero-energy ski areas.

The partnership between MRA and the Brendle Group with forge toward a new model for sustainability in the ski industry, focused on alternative business models for small and medium-sized resorts.

For starters, the Brendle Group will develop and test a model for sustainability at Mt. Abram that can be replicated elsewhere, starting with comprehensive assessments of energy use, land use, procurement, and community sustainability to identify options for net zero carbon, energy, and water operations as well as integrating sustainability and local economic development. Continue reading

Vail Resorts 2012 earnings, revenue and skier visits down

Company reports increases in season pass sales and advance bookings

Breckenridge ski resort peaks seen from Dillon, Colorado.

By Summit Voice

SUMMIT COUNTY — After one of the toughest seasons in memory, Vail Resorts wrapped up its fiscal year 2012 with earnings down about 7.5 percent from 2011, according to the company’s earnings statement released today (Sept. 25).

Total net revenue was $1,024.4 million in 2012 compared to $1,167.0 million in the prior year, a 12.2 percent decrease.

For 2012, VR reported a net income of $16.5 million, down from $34.5 million in 2011, as skier visits dropped steeply at the company’s California and Colorado ski areas. In Colorado (Vail, Beaver Creek, Keystone and Breckenridge) visits dropped 8.9 percent, from 5.2 million in 2011 to 4.8 million in 2012.

Overall VR skier visits dropped by 12.1 percent, from 7 million in 2011 to 6.1 million in 2012. Continue reading

Critics plan appeal of Breckenridge Peak 6 expansion

DU Law Clinic may help with administrative or legal challenge

The Peak 6 expansion at Breckenridge will very likely be appealed and a legal challenge is not out of the question. Click on the map a couple of times to see the full-size version.

By Bob Berwyn

SUMMIT COUNTY — The U.S. Forest Service approval of the Peak 6 expansion at Breckenridge Ski Area probably won’t go unchallenged. Longtime critics of the project scrutinizing the the final environmental study say they are likely to appeal several elements of the decision, including, fundamentally, whether the expansion meets the stated purpose and need.

Vail Resorts claimed from the start that the new lifts and terrain will ease congestion at Breckenridge by spreading out skiers on peak visitation days, but at least some of the data in the Final Environmental Impact Statement seem to contradict that conclusion.

Skiers and snowboarders will still have to use the busiest lifts out of the Peak 8 base area to reach the new terrain. At one point in the document the Forest Service appears to flat-out acknowledge that the expansion won’t significantly shorten lift wait times on Peak 7 and Peak 8.

All the documents for the Peak 6 project are at this Forest Service website. Extensive background stories about Peak 6 are online at this Summit Voice page. Some of the ongoing community concerns and criticisms of the Forest Service decision are spelled out on the Save Peak 6 Facebook page.

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