Saturday, September 22, 2001
Steamboat Springs Not long ago, the tourism numbers looked good for Bob Milne and Steamboat Springs.
Milne is president of Steamboat Resorts, the largest of a number of property management companies whose reason for being is filling the community's resort bed base. Despite a sour economy and widespread layoffs, advance reservations at Milne's business were running 8 percent ahead of 2000.
"We were really set for a real good ski season," he said.
Then came Sept. 11, the day terrorists crashed commercial jets into the World Trade Center towers and the Pentagon, killing thousands and doing untold damage to tourism-based economies around the country, including Steamboat's. In the 11 days since the attacks, airlines have scuttled jobs, flights and employees, and the stock market has suffered its worst week ever.
At Steamboat Resorts, phone volume has fallen 50 percent and cancellations are 25 percent higher than normal. Now, Milne is warning his clients business will be down in the coming months.
"Everyone is afraid to be realistic because they don't want to spread doom and gloom," Milne said. "Doom and gloom is one thing, but reality is another thing."
In the wake of the attacks, the dangling questions for the coming ski season are: Will consumers regain confidence in the nation's commercial airline system? And will they feel like vacationing at all this winter?
By the numbers
A travel industry consultant contracted by the Steamboat Ski & Resort Corp. released results of a survey last week indicating that 37 percent of a national sample agree the recent terrorism will influence their leisure travel plans. Conversely, 63 percent said their plans would not be influenced.
The survey by Yesawich, Pepperdine & Brown also found that 35 percent of those surveyed expect to cancel a domestic leisure trip as a result of the terrorist attacks. And 68 percent said they would drive rather than fly whenever possible.
Before the terrorist attacks, Steamboat Resorts was planning a marketing blitz in Chicago and New York, sending marketing and sales personnel to make personal calls on travel agents in those markets, touting direct flights to Yampa Valley Regional Airport in Hayden.
An industry shake-up
Now, Milne said, his company is far from giving up on the ski season but it is adjusting its marketing plans.
He said Marketing Director Tim Johnson is looking at reaching people who might drive to Steamboat this winter, and not just people living in Colorado.
Steamboat Resorts isn't giving up on the direct flight program either, Milne said.
It's his hope that the airline industry will get the infusion of federal dollars it is seeking from Congress and then launch a program of discount fares that will turn reluctant vacationers into bargain hunters.
"Americans are deal-hungry people," Milne said. "Clearly (the airlines) should be out there with some screaming deals to motivate apprehensive people."
Lianne Pyle of Carlson Wagonlit Travel in Steamboat, can relate to the cancellation rate Milne's staff is experiencing.
"This is going to shake up the industry, no doubt about it," Pyle said. Her office has been busy since Sept. 11 but it's the wrong kind of busy.
"We've had a flood of people calling us," Pyle said. "We're doing an awful lot of work, but it's in the wrong direction. She said her travel agents have been preoccupied with non-revenue generating tasks like taking cancellations and helping people rearrange their travel plans.
"It's been a tough couple of weeks," Pyle said. "The revenue is just not there. We're a small business and it's kind of scary."
In the short run, Pyle said she wouldn't be surprised if people curtail travel plans. But in the mid-term, she said she feels there is a possibility people will need their vacations more than ever.
"The holidays might be a time to stay home with family," Pyle said. "On the other hand, people might feel a need to get away. People who go on ski vacations are diehard skiers. They do it to escape. Escaping is going to be even more important to people."
Like Milne, Pyle said she thinks there will be airfare bargains to be had in the near future, but in a more traditional market, a number of the events of the last 12 days would suggest that air travel would become more expensive.
"The flights were already oversold," Pyle said. "Travel was already quite difficult, really. It has always been a supply and demand system, even on a daily basis."
After the airlines laid off hundreds of pilots and pulled aircraft out of service, it might be reasonable to think that there will be even less supply to meet demand. But the question of whether there will be demand for air travel remains unanswered.
Ski Corp. Vice President of Marketing Andy Wirth said even the carrying costs of taking airplanes out of service will constitute a major blow to the airlines.
Wirth and his staff have been in frequent contact with executives in charge of routing and scheduling at major airlines like United, American and Continental.
Wirth said the fact that Steamboat contracts with the airlines and provides flight guarantees to bring the jets here during ski season strengthens its position relative to many other vacation destinations.
"We're really in a very good position (in that specific regard)," Wirth said. "We have the flights. They are in place. They are going to fly. We've confirmed that with all the airlines."
A window of opportunity
The critical issue for Steamboat's airline program is the level of service the airlines will provide into the hubs that serve Steamboat directly, Wirth said.
For example, the daily flights from Houston on Continental airlines have historically been one of the best performers for Steamboat.
But "origination and destination" surveys compiled by the ski area and the airline show that just 25 to 35 percent of the passengers bound for Yampa Valley Regional Airport are beginning their trips from cities like Houston, Dallas, Chicago and Newark. If the airlines cut service back too severely from connecting destinations it has the potential to hurt Steamboat.
Thus far, Wirth said, airline cutbacks have been to the earliest and latest flights of the day, because they typically carry the lowest load factors anyway.
Those flights are the least critical to Steamboat passengers, Wirth said. The mid-morning banks of flights that fly into Houston, Dallas and Chicago aren't poised to change.
On another front, Wirth said Steamboat has begun re-crafting its marketing message so it will be ready when the American public demonstrates it is comfortable with vacationing.
Wirth said he expects a window of opportunity to open in the coming months when it will be appropriate to reengage the marketplace.
He said he wants to be prepared to seize that opportunity by putting out the best message possible for Steamboat.
The challenges ahead
Taking advantage of the opportunity won't require additional advertising money the ski area will employ a budget of well into six figures that is already in place for promoting Steamboat in its direct airline markets, Wirth said.
Wirth expects to maintain the Ski Town U.S.A. and Olympic theme of this year's advertising campaign, but he wants to avoid creating the impression that the resort is draping itself in the flag for commercial gain.
New ad copy from the ski area's Denver agency, Karsh & Hagan, is likely to build on the themes of serenity and escapism offered by a vacation in Steamboat.
When Desert Shield which led to Desert Storm broke on America's tourism industry in late autumn of 1990, Wirth said the Colorado Ski Industry achieved record numbers December through February 1991, only to see March take a beating. That was a very different situation from this year last week's violence took place on American soil. But Wirth said some lessons could be drawn from that national crisis.
"To me, I think it's proof that with a great deal of work and attention," Steamboat still has a chance to have a successful ski season he said. "A Rocky Mountain ski vacation can be a very desirable way to escape the chaos that surrounds people."
Wirth rejected the notion that Steamboat's ski season is already irretrievably damaged but he said he believes the months leading up to the ski season will present a formidable challenge.
"We have a huge challenge before us and there's no question it has its complexities,"