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SOURCE Condor Capital
MARTINSVILLE, N.J., Feb. 4, 2014 /PRNewswire/ -- Thus far, the 2013/14 ski/snowboard season has seen widely divergent performance across regions. Some areas have enjoyed robust snowfall and cold temperatures, while others are suffering from a historic dearth of precipitation. Against this backdrop, we reduce our forecast for total skier visits and now see low-to-mid single digit percentage gains over last year, or 58 to 60 million visits.
Much of the northeast U.S. has seen frigid temperatures and enjoyed several snowstorms so far this season, benefiting resorts in the region, particularly those in New York. In Colorado and Utah, solid snowfall totals have also blanketed resorts. However, in California and the Pacific Northwest, conditions have been poor. California's 25 ski resorts have seen the lowest amount of snowfall since the 1971/72 season. Mammoth Mountain, the third largest resort in the U.S. by number of visitors, has received just 48 inches of snow so far this year, compared to a 400 inch yearly average, and only has half of its 28 lifts turning. According to data from the California Department of Water Resources, the state's snowpack is only 12% of what would be considered normal for this time of the year. Since the department began collecting data in 1960, the previous record low was 21% of normal, which was registered in 1991. This hardship extends north through Washington and into British Columbia, Canada. Whistler Blackcomb, the region's flagship resort, has received only 121 inches of snow so far this season, which compares to a 10-year average of about 275 inches.
Due to this, resorts in California have experienced declines of up to 50% in skier visits. The aforementioned Mammoth Mountain has forecasted 950,000 skier visits this season, down from an average of 1.3 million. On the other hand, through December, resorts in Colorado have seen a 22% increase in visits, according to Colorado Ski Country USA. Visits in the state are now tracking 6.7% above the 5-year average as early snowfall allowed many mountains to open more terrain earlier in the season. Vail Resorts, which owns a portfolio of ski areas across the U.S., recently reported that its overall skier visits were down 0.7% year-over-year, through January 5th. Although its properties in Utah and Colorado were up 7.4%, its properties in the Lake Tahoe area saw a sharp 23.4% decline. The resiliency in its headline figure displays the advantages of having a geographically diverse resort portfolio. Intrawest Resorts, which owns resorts across the U.S. and Canada, as well as CMH, the world's premier heli-skiing operator, reported that its skier visit total was up 8% through January 5th. The company went public via an IPO on January 31st, pricing its shares at $12, well below the expected range of $15-17 per share. The struggles in California will likely strain the finances of some smaller resorts and could spark a wave of takeovers and consolidation. Results in the northeast, however, have been favorable. While resorts in Vermont have not benefited as strongly from recent storms that dumped over a foot of snow in areas of New York, Pennsylvania, and New Jersey, they have provided great marketing in major metro areas, such as New York City and Philadelphia, which helped bookings. Jay Peak in northern VT noted that business was up 24% through year-end, while Killington Resort said that business was up 9.5% year-over-year, through Christmas.
From a lodging perspective, DestiMetric's data show that occupancy at mountain resorts was up 6.2% nationally, with revenues up an even stronger 12.3%. By region, western resorts were up 6.5%, while eastern locations registered a 2.1% gain. Retailers have also benefited from cooperative weather in most areas of the U.S. SnowSports Industries America (SIA) and the Leisure Trends Group's RetailTRAK said that snow sports retailers enjoyed a record holiday season, with sales through December hitting $2.20B, beating last year's $2.01B and 2010/11's record of $2.17B. The report noted that while the drought in California hindered sales, favorable conditions in the northeast and record cold extending into the southern U.S helped drive sales, particularly for apparel. By category, equipment sales rose 6%, apparel sales gained 7%, and accessories sales jumped 15%. In the accessories vertical, action cameras experienced substantial growth, with unit sales rising 19% and dollar sales jumping 36%. The report also noted that while an improving economy and rising stock market are helpful, approximately 75% of the year-to-year variance in snow sport retail sales can be explained by weather conditions.
Overall, while weakness in California and the Pacific Northwest has created a drag, the 2013/14 ski season is off to a solid start. Should snow conditions improve in those areas, and remain strong in the rest of the country, we could see acceleration through February as viewership of the Olympics generates interest and provides widely disseminated marketing for winter sports.
Founded in 1988, Condor Capital is an employee-owned, SEC-registered investment advisor based in Martinsville, N.J. employing 15 professional and support staff. Since Condor is a fee-only, investment management firm, its fees are based on portfolio size, not sales commissions or number of trades. For more information on Condor Capital, please visit www.condorcapital.com or call 732-356-7323.
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