This story first appeared in The Outsider, the premium outdoor newsletter by Jason Blevins.
In it, he covers the industry from the inside out, plus the fun side of being outdoors in our beautiful state.
Colorado ski resorts operating on public land have once again sent a record rent payment to the U.S. government. The payment for 2017-18 — based on revenues collected at 23 Colorado resorts — was $26.8 million, the highest ever.
Those payments are expected to continue reaching new highs as resort operators sell hundreds of thousands of season passes and seed year-round business at hills that once hosted only winter visitors. And the state’s national forests could start keeping more of that money under new legislation proposed last week.
Last week, Colorado’s U.S. senators, Michael Bennet and Cory Gardner, again floated legislation that would allow some Forest Service regions to retain fees collected from ski resorts inside their boundaries.
The Ski Area Fee Retention Act, which the pair proposed last year, would allow land managers in forests such as the White River National Forest — the most trafficked national forest in the country — to retain as much as 50 percent of the fees it collects from some of the world’s busiest ski areas, including Vail, Breckenridge, Keystone, Beaver Creek, Copper Mountain and Aspen Skiing Co.’s Snowmass.
U.S. Rep. Scott Tipton in May proposed similar legislation in the House with his Ski Area Fee Retention Act, which gathered support from his Colorado colleagues Reps. Diana DeGette and Doug Lamborn.
“It’s important that our skiing communities don’t just send money to Washington and not fully benefit from fees they generate for the federal government,” Gardner wrote in a statement. “My bipartisan legislation with Sen. Bennet will make it easier for our skiing communities to make the capital improvements they need by keeping the fees they generate.”
Every year, the 122 U.S. ski resorts operating on public land send revenue-based rent payments of about $37 million to the U.S. Treasury, which then sends portions of the money back to different regions of the Forest Service. A big chunk of that money — calculated based on how much total revenue resorts take in — always comes from Colorado, home to the country’s busiest resorts.
For 2017-18 — the latest season collected by the Forest Service — the $26.8 million record means Colorado resorts made more money in that season than in any other.
That is somewhat surprising because that 2017-18 ski season was not good. Snowfall was weak across the state — really across the country — and skiers didn’t go up as much as usual. Despite the poor snow, revenue collected by ski resorts climbed, albeit a meager 1.9 percent over the 2016-17 season. That’s the smallest year-over-year increase since 2011-12, which was a spectacularly bad snow year.
Melanie Mills — the longtime chief of the Colorado Ski Country trade group, which represents 24 of the state’s large and small ski areas — said she expected revenue growth to slow in 2017-18 as visits declined due to weaker snowfall. Unlike this bountiful season, which saw Colorado’s snow-buried resorts posting a record 13.8 million visits and resort communities harvesting record-high sales-tax revenues. (Ski area rent payments for 2018-19 won’t be collected and reported until this time next year.)
Last year’s introduction of the Ikon Pass certainly played a role in this season’s record-setting visitation and visitor spending in resort towns. And it will play a role in ski area revenue-based rent payments when those are tallied next year.
“We’ll need to get a few years of that data into the system before identifying any trends,” Mills said. “And, as is the norm in the ski biz, snow matters. It affects visits, spending and fees.”
But the growing use of the Epic and Ikon passes, which are purchased before resorts open, has lessened resorts reliance on snow. Vail Resorts, which pioneered the season-pass movement in 2008, sold 925,000 Epic Passes for the 2018-19 season, which accounted for nearly half the company’s lift-ticket revenue.
“We made a trade with our guests, giving them a big discount and giving the company stability,” Vail Resorts chief Rob Katz said this week during a keynote to a dozen state leaders at the Western Governors’ Association’s annual conference in Vail.
Don Dressler, the Forest Service’s mountain resort program manager for the Rocky Mountain Region, said revenue payments to the U.S. government will soon reflect the growing use of those passes.
“From an industry view, the season-pass sales are definitely contributing to how that revenue is accounted for,” Dressler said. “The weather dependency is not such a factor anymore because people are buying their passes so much earlier.”
While visits to Colorado ski areas declined in 2017-18, revenue remained largely flat. That could be due to the early sales of 750,000 Epic Passes for that season. And the revenues could be buoyed by increasing summer activities at ski resorts. Many of the larger ski areas now offer near year-round play, with a growing collection of ziplines, coasters and mountain-bike trails luring warm-weather visitors. (Those summer activities typically are not part of any season-pass deal, so visitors have to pay daily rates, which at Vail resort, for example, run $109 for unlimited rides and activities.)
The fiscal-year fee payments from resorts on Forest Service land are paid in lump sums and do not break out seasonal specifics, “so it’s hard to say if summer is the savior or not,” Dressler said.
Still, summer is certainly growing, said Dressler, pointing to the growing list of proposals from resorts seeking approval for mountain-bike trails, canopy tours and even a new via ferrata at Arapahoe Basin. The spring and fall months typically saw business slow to a trickle at ski resorts. Now, the hills are alive with cyclists, hikers and zipliners.
“Summer business definitely rounds out the shoulder seasons,” Dressler said.