STATE SKI RESORTS SENDING MORE MONEY TO D.C.
For ’16-17 season, check to U.S. Treasury was $26.3M, up from previous high mark of $25.6M for ’15-16
As Colorado ski areas cast a wider net to capture more guest dollars, they are sending increasing rent checks to the nation’s capital.
For the fifth straight year, Colorado’s ski areas have sent the U.S. Treasury record rent payments for operating on public land.
Since 2008, the 24 Colorado resorts on federal land have sent increasing rent checks to the nation’s capital. In the depths of the recession, the ski areas sent the Treasury $14.8 million for the 2008-09 season. For the 2016-17 season, the check was $26.3 million, up from the previous record of $25.6 million for 2015-16.
The steady growth reflects ski areas casting a wider net to capture guest dollars — including selling an ever-growing number of season passes — as well as expanding into all four seasons with a growing summer business.
“The resorts are finding new revenue streams and new ways to capitalize on revenue streams to some extent. Summer business is playing a bigger role as well,” said Don Dressler, the Forest Service’s mountain resort program manager for the resort-heavy Rocky Mountain Region.
The ski resort industry is dividing into two distinct camps — with Vail Resorts vying against the newly formed Alterra Mountain Co. Both of the Colorado-based operators are aligning with partners in Colorado, California and Utah, as well as in the East, to create a looming season pass war that will forever alter the industry. In response to the changing dynamic, the Forest Service for the first time is not releasing individual resort rent payments, which are based on a percentage of gross revenues. Instead, the agency responded to an annual Freedom of Information Act request filed by The Denver Post with a single figure: a lump-sum payment from all Colorado resorts.
“Now that we have several companies operating in multiple states and multiple regions of the Forest Service — with Vail in California and Colorado and now Alterra in Colorado and California — we have tried to bring some consistency to how we are reporting this information. We are working directly with those permit-holders to make sure they are aware of these requests,” said Dressler, noting that the federal legislation that outlines how resorts pay their revenue-based rental payments allows for exemption of sensitive business information.
And in this emerging duopoly, information that can reveal a resort’s revenue growth or decline can be considered sensitive.
Ski-area rental fees are a hot topic these days. The industry recently floated federal legislation that would allow local forests — including the 11resort White River National Forest, the country’s
most trafficked national forest, which sent more than $20 million in ski resort fees to Washington, D.C., for the 2015-16 ski season — to retain a portion of those fees.
The Ski Area Fee Retention Act would allow Colorado’s national forests to keep up to 50 percent of resort rent payments. The Forest Service has seen its budget cut and ravaged by wildfires in the last several years.
The recent $1.3 trillion federal budget includes $2 billion a year for fire suppression, which promises to end the practice of borrowing from the Forest Service’s budget.
In the 1990s, the agency spent about 16 percent of its budget on fire and in 2017 fire cost the agency almost 60 percent of its annual budget. That fire-borrowing has crushed the agency’s ability to support watershed projects and strategies to reduce fire risk. But that $2 billion doesn’t kick in until 2020, and, after a dismal season for snowfall in Colorado, the looming fire season could further reduce the Forest Service’s coffers.
The ski resort industry, which is pushing summer development, has seen projects delayed as the agency struggles to review new plans.
It started with ski areas in the Pacific Northwest several years ago, when resorts were told their projects had to be paused because the agency did not have the staff to review proposals.
“Now, that lack of capacity is everywhere,” said Geraldine Link with the National Ski Areas Association. “It’s not just the Pacific Northwest. For example, resorts across the West are providing the Forest Service with a list of projects — upgrading snowmaking, transitioning to fourseason, replacing old lifts — and the Forest Service says pick the absolute priority. When you have the capital ready to invest, you need to act.”
Alterra Mountain Co. recently announced plans to invest $555 million over five years at its 12 destination ski areas in California, Utah, Canada, Vermont and Colorado, where the Denverbased company operates Winter Park and owns Steamboat.
“We need a process to investing that kind of capital,” Link said.