Park City will have stiff competition this year
October 31, 2008
The cruise industry is the biggest threat to winter tourism business everywhere, according to Arnie Weissmann, editor-in-chief at Travel Weekly.
Weissmann spoke at a Park City Chamber/Bureau luncheon Wednesday and outlined what his magazine is seeing as far as marketing trends for tourism this winter.
He said the economic slump and higher plane fares are affecting all tourism, and the cruise industry is expected to be the most aggressive in attracting what’s left of the market.
The companies have launched seven new ships this year. That’s 21,000 berths they’re going to try to fill every four to seven days.
"They must sail full, their economic structure depends on it," he said. "They have a history of discounting to fill ships."
Fewer flights and higher air fares are hampering the cruise industry, and may somewhat level the playing field, but Weissmann warned that competition will also come from other areas.
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Las Vegas, for example, has 80,000 new rooms built or planned for the 2008-2009 tourism season and while most hotels can stay in business at 65 percent occupancy, the casinos need 90 percent. He expects to see heavy marketing and discounts from them as well.
Everyone in the lodging industry should brace for slowing, he said.
"There is a light at the end of the tunnel, but I’m here to describe the tunnel," he said.
Occupancy rates nationally are down 6 percent and many experts believe they will return to post-Sept. 11, 2001 rates, he said.
Luxury hotel managers have told him this year may be worse than Sept. 11, because the large bank debacles have tarnished the prestige of holding a corporate meeting or retreat at a Four Seasons or Ritz-Carlton.
More bad news: surveys are suggesting that East Coast skiers, a profitable portion of Park City’s winter business, are considering staying in New England to ski this season to save money, he said.
Lodging figures in Canada and the American West are already suggesting a 20 percent decline.
Vail Resorts reported being down 17 percent.
Silver linings, Weissmann said, include two trends that will likely benefit Park City. One is the tendency for vacationers during tough times to seek reliability and take fewer risks. Park City’s reputation as a quality destination bodes well for it in this respect.
The second trend is for people to seek more quality experiences over "stuff" when they vacation, and Park City has done well promoting itself as a family town.
Industry experts have a hypothesis that people get "cabin fever" and get tired of cutting back about nine months into a recession and start vacationing again anyway.
While this winter may be slower, this trend should improve business in 2009 even if the economy hasn’t recovered by then, he said.
Curious about the immediate effects of stock market crashes or winter snow storms, Weissmann asked attendees if they noticed reactions from potential guests.
Bill Malone, executive director of the Chamber/Bureau, admitted to "sitting by the phones," saying his office’s call volume is down 40 percent.
Krista Parry, marketing director for Park City Mountain Resort, said her resort saw a 20 percent decline in website hits every time the stock market plunged.
On the bright side, Malone joked that whenever it snows during a nationally-televised Denver Broncos football game, the call volume goes up, suggesting perceptions are affecting potential visitations.
Ending on a positive note, Weissmann said uncertain times always result in companies finding ways to innovate, which end up benefiting every industry it touches in the long run.
"Among ski resorts, you’re likely to pick up first. You have a great product," he said.
The luncheon began with a panel discussion on improvements at the three resorts with Bob Wheaton of Deer Valley, Mike Gore from Talisker with The Canyons and Parry from PCMR.
The three applauded the great cooperation the resorts have and said that same level of promotion of mutual interests can’t be found in any other ski area.
That said, they acknowledged it would still be some time before they were ready to discuss skier/snowboarder interconnects.
Gore said Talisker’s hope is to not be compared with the previous owners of The Canyons and its intent is to focus on the future. Regarding the future, however, he spoke conservatively and said his company will wait to announce any new plans until they’re ready to break ground.
Wheaton reiterated that good snowfall trumps a bad economic situation every time, and is not worried as long as the weather is compliant.
All three also acknowledged that advanced reservations for major corporate retreats are down, but didn’t anticipate that to affect the overall picture.