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Monarch and Crested Butte have to compete, too

Sidebar by Allen Best

Ski industry – May 2001 – Colorado Central Magazine

At Monarch Ski Area, the prices are going down-substantially. A season pass, if purchased in May, costs $199. Several years ago it cost $375.

Even skiing on Highway 50 is dictated by the I-70 economic structure.

Colorado Springs is easily the most important market for Monarch. But for a Colorado Springs skier, Breckenridge is nearly as close, and Copper Mountain just a few minutes farther yet.

Monarch’s story runs parallel to Ski Cooper’s. Sixty-five percent of all revenues come from lift tickets. By selling cheap uphill transportation more cheaply, you can sell more of it, and also more hamburgers. But that only works to a point.

Heavy discounting, says Rich Moorhead, general manager of Monarch, will “make it very difficult for small areas to stay in business, if that trend continues.”

The larger I-70 resorts have multiple revenue streams, including lodging and retail. Monarch has none of that, partly because of an absence of private land at the base area. Moorhead characterizes the U.S. Forest Service response to the general idea of a land exchange as “fairly lukewarm.”

Again this year, as last, the limited liability corporation that owns Monarch has it on the sales block. Last year the asking price was $8.5 million. Some industry observers believe the fixed-grip quad installed at Monarch last year was an attempt by the California-based investors to gussy up the resort for sale. Moorhead, however, points out that the lift has eliminated lengthy lines, even on holidays.

Aside from its Colorado market, which is 66% of its skiers, Monarch draws well among church groups from Texas, Oklahoma, and Kansas. But nationally, the skier market is flat. Ski areas are still in the game of stealing market share. If one ski area gains, somebody else loses. Right now, the gains are all on the I-70 corridor.

Crested Butte has been losing market share drastically, a casualty of the price wars, reduced airline connections, and, most important, a streak of bad weather. It couldn’t have come at a worse time for the Calloway and Walton families, who are ready to get out of the business.

Intrawest and Vail Resorts have both kicked the tires and walked away in past years. The strongest potential other buyer would be Joe Morita, son of the founder of Sony who first nibbled on Beaver Creek real estate and then became the dominant partner at Telluride. A shared direct-flight program, particularly geared to the fastest-growing city in the nation, Las Vegas, could conceivably be in the works. Real estate development is the other part of the picture.

For any small ski areas, probably including Crested Butte, a key question is how deeply to invest in expensive technology, such as high-speed detachable lifts.

Ned Stock spent 25 years at Monarch, the latter years as general manager.

Now, he looks at the ski industry from New Mexico’s Angel Fire, where he is general manager.

“As technology increases, and it becomes the norm at the larger resorts, the consumer has that expectation,” he says. “It’s challenging and in some cases impossible for small resorts to justify that technology.”

Some small ski areas have not done well in recent years because they were created primarily as amenities for associated real estate. He puts Cuchara in that category.

Monarch is a good ski mountain in its own right — “at the top of my list,” says Stock — and so are many other small ski areas, including Wolf Creek and Cooper. They’re all at high elevations and on mountain passes, the right terrain, and the right exposure.

Still, by moving to New Mexico, Stock is happy to be at a ski area that also has other revenue streams. Stock directs operations at a golf course and sales of real estate.

Jack Watkins, a former minority owner and also marketing director at Monarch, sees a place for small ski areas. “As long as they realize they’re small, and market themselves in the proper direction, there is definitely a place in the market for them,” he says.

The danger is when managers of small-fry resorts pretend they’re at big-fish places, competing for skiers who would go there from Chicago or New York City, he says. Another danger is to vie for experts, who usually try to dodge paying money at all. The trick is to compete for the 90% of skiers who are intermediates or less in skiing ability. –A.B.