When Vail Resorts spelled out its suspension of operations in mid-March, the shutdown was hoped to last only a week. Fifty days later, all 37 resorts remain shuttered and the company has borrowed more than a billion dollars to weather a possible extended recession.
Almost immediately, Vail Resorts postponed discretionary capital improvement projects including seven new chairlifts. Vail is just one of numerous operators of lifts facing epic challenges due to COVID-19. The impacts trickle down to suppliers, particularly global suppliers of large machinery like the Leitner Group and Doppelmayr. While the two major lift manufacturers are of similar size and structure, their customers are incredibly diverse, from mom and pop outfits to governments, NGOs and Fortune 100 companies.
As regular readers of this blog know, the lift business is not the same as the ski business. Leitner-Poma, Skytrac and Doppelmayr USA have all completed projects for non-ski venues recently such as theme parks, zoos, stadiums and cruise ports. Not only are these projects making up an increasing share of contracts, they tend to be large in scope and often include lucrative operation and maintenance deals. Some of these non-traditional customers are in even worse shape than the ski business, more dependent on high guest densities and air travel. Put another way, there is little chance the Walt Disney Company, Carnival Corporation or the Miami Dolphins would have signed to build their recent lift projects in today’s environment. So-called “point of interest” projects may disappear entirely for a few years.
One bright spot could be urban transport. The Portland Aerial Tram and Roosevelt Island Tramway have both remained operational throughout the pandemic, albeit at reduced capacity (the Portland Tram carries health care workers to three different hospitals and is about as essential as it gets.) Large aerial tramways have been ceding market share to monocable, 2S and 3S gondolas, a trend which will probably accelerate with new personal space concerns. With gondolas, each person or family can take their own cabin unlike on trains or buses. There are lots of great concepts for urban gondolas in North America and infrastructure spending programs could finally get one or two off the ground. Mexico already has a large urban gondola system in operation with two more under construction.
The ski industry is probably going to be as important as ever to the lift companies during the recovery. Social distancing may be a thing for years to come and outdoor recreation will play a big role. Next winter, chairlifts will be even better than gondolas, designed to spread people out at an even pace with a constant stream of fresh air. But economic uncertainty means the four biggest North American ski operators – Vail, Alterra, Boyne and Powdr – are installing a grand total of zero lifts this year.
Even without the big four, nearly 70 percent of announced 2020 projects are still on the books. In Colorado, Arapahoe Basin will replace two of its six chairlifts in one go, just as its neighbors postponed smaller projects as a percentage of revenue. Independent resorts such as Aspen Snowmass, Sun Peaks, and Sun Valley are also proceeding with multi-million dollar lift projects. An entrepreneur from Indiana announced $10 million worth of chairlifts for the rebirth of a closed West Virginia ski resort the same day the last North American resort shut down due to the pandemic in late March. One Idaho nonprofit running a place called the Little Ski Hill is going ahead with a modern lift to replace a 1970 T-Bar. If these guys can afford to press on in the midst of a pandemic, surely others can and will in 2021 and 2022.
As shown above, US lift construction fell between 25 and 35 percent in both of the last two recessions. Following the September 11th attacks and associated downturn, skier visits and lift construction bounced back to 2000 levels within just two years. The Great Recession was a different story. Skier visits still recovered quickly but the stock market took four years to come back. The unemployment rate took seven years to reach pre-2008 levels. It was lift construction that took the longest to recover – a whopping nine years to regain the lost 35 percent.
Which type of recovery will follow Coronavirus? No one knows but I have a few thoughts. The aging lift problem isn’t going away. 650 operating ropeways in North America were built prior to 1980, many by manufacturers no longer in business. Another 540 date from 1980 to 1990 including many first generation detachable quads. Just as governments look to focus on infrastructure, ski resorts which can afford to should too. Even if a new lift isn’t in the cards, there are lots of productive upgrades such as new control systems which can make older lifts more reliable. Vail says it will proceed with the vast majority of its maintenance capital in 2020.
Another good thing for the lift suppliers: some customers already made significant payments on postponed 2020 lifts. Boyne confirmed its big ticket projects will go next year while Alterra and Vail haven’t explicitly said. It’s possible next year becomes a double whammy of postponed projects plus new ones. By 2022, things could be back to normal with expansions like Sugarloaf’s West Mountain, Squaw’s California Express and Tremblant’s Timber safer to undertake.
Skiers and snowboarders are a passionate bunch and if history is any indication, most of them will be back on the slopes as soon as health and personal finance allow. If the lift companies can weather a down year or two, construction contracts should follow the skiers.
Lift Blog 
There are ‘new’ lifts servicing new terrain – and there are ‘new’ (i.e. replacement) lifts servicing existing terrain. In the east (at least), ski resort expansions are a lot rarer than they used to be. Waterville Valley’s Green Peak – is the only one that comes to mind recently (and they reused a lift for that). I’m wondering how much of the leveling off over the years is due to that aspect. If you’re not expanding, you are not putting in as many lifts. I’m guessing part of that lack of expansion is economic and part is regulatory.
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Expansion has become increasingly more expensive and regulated over time. Land used to be cheap and there were fewer regulatory hurdles to clear for government-owned land. Government environmental agencies, many of which were established or expanded in the 1960s/70s, made deals with numerous ski resorts to cap their SUPs at certain sizes. Most importantly, though, is that expansion is now more expensive in terms of what is needed. Whereas a cheap double chair and some simple tree clearing were previously all that was necessary, ski resorts now need expansive snowmaking, high-speed lifts, well-graded terrain, etc.
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I’ll chime in here with both sides of the coin. While expansions are diminishing, they are also becoming the de facto way for the ski industry to expand. While an expansion is expensive, it is still far less expensive and risky then trying to open up a new ski resort. Even large expansions may only create 2 new lifts at a resort whereas Mayflower will be creating 4 lifts just off the bat. Also, with a shrinking number of resorts, i believe you will see an increasing number of “large” resorts replacing lifts to accommodate increasing skier density.
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“ski resorts now need expansive snowmaking, high-speed lifts, well-graded terrain, etc.”
Not necessarily. In a lot of cases, a mid to long T-bar with a few trails and a little glading can go a long way.
A partially developed expert pod on busy days will draw hardcore skiers from fully developed pods and make the mountain feel larger and less congested, in turn selling more tickets. A partially developed pod also costs a fraction of what a fully developed pod would cost.
I feel like mountains in the U.S. currently underuse T-bars. They are super cheap, reliable, lower maintenance then chairlifts, and most experts would be willing to ride them for some pow turns.
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“Mountains in the U.S. currently under-use T-bars.” Well, that can be true, but there are a few in CO that have a t-bars. I feel like t-bars should come back in the ski lift market at some point. But right now who knows.
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Of course there are snowboarders who use T-bars (and Poma button tows). But they can be a fairly unpleasant experience.
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A lot of great reasons to be optimistic. But with employment and growth metrics literally off the charts, it’s important not to underestimate the tail risk that the US and global economies could be headed towards very challenging times, depending on how deftly governments and central banks navigate this situation. And it’s hard to imagine the ski industry being insulated from such a systemic downturn. But only time will tell.
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Crazy that skier visits in 2018-today was just reaching 2000-2010 levels again despite more people in the US and likely more international visitors.
I guess less reliable snow, ever increasing lift ticket prices, and closure of local resorts has led to fewer ski visits.
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I think the biggest constraint to skier visit growth is an aging baby boomer population and not enough of the right demographic cohort to backfill them. The demographic groups that are increasing in North America just don’t take to skiing and riding like the boomers did back in the 60s and 70s. Ticket prices are also a speed bump to get skiers and riders to ski more days in a season. Not everyone wants a multi resort pass. I’m a prime example. I’m 61, started skiing in 1975, used to regularly clock 40 days a year, but now do less than 10. But I make sure those 10 days are spectacular.
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I also don’t buy in to the argument that there is less snow these days. Most resort areas get as much snow as they always have but with one exception. The southern tier of the US including So Cal, New Mexico, southern Utah, etc don’t get as reliable snowfalls as they used to. But then they’ve always been drought prone but in recent years it seems to be worse.
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The Northeast would disagree with you. I have been skiing here for years and the number of 35-45 degree and rainy days has skyrocketed. Ski resorts used to get season total above and below their average (making it an actual average), but now they get around their average in a good year and way below in a bad year. I will agree that it has absolutely been way worse for those resorts closer to the snow line (lower elevation, southern latitudes, etc.) and that the rest have been mostly spared.
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2011-12 and 2015-16 are the two extreme outlier years. The rest of the seasons in the last decade average out to be around what’s advertised. Stratton averaged 152″ in all of the other years (they advertise 160″). The question is if the two terrible years were two flukes or if having 2 terrible seasons in a decade is the new normal.
We’ll just have to wait and see. It’s too early to make assumptions about anything.
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For Stratton, this past season (19/20), 15/16, and 11/12 were all well below average and only one season in the past decade was above average (and only by 3 inches). Yes, their 180 annual average is probably not accurate, but that is kind of the point, as it used to be years ago. Taos, Mountain Creek, and most other resorts closer to the snowline have seen their averages go down. The more elevated or northern resorts have mostly been fine.
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I’m disappointed that, from a potential social distancing standpoint, Breck postponed the new HSQ for Peak Seven. If lift line density is a concern this coming winter, and I think it will be, the additional lift to keep repeat skiers out of base would have proved very helpful. If we are to load only in groups known to each other, a lot of six capacity will be underutilized in a way that a four doesn’t feel as bad (as a single or pair that I’m likely to load)
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