This is achieved through answering several important questions. First of all, the environment surrounding ski resorts is examined and how they have been affected by changes that have occurred since 1970’s. Next, the business reactions of ski resorts in order to adapt to these changes are discussed, as well as the greater importance of management comparing to past years. The third part discusses different competition that resorts on the west and east coasts of the USA are facing. Moreover, the impact of European competition to east coast resorts is examined, as well.
In the end, different forecasts for further changes in ski resorts business environment are provided, as well as several suggestions for actions that can be taken in the near future. Question 1: What are the most important changes in the environment that have contributed to the drop in revenues? In 1970’s, ski industry in the United States experienced great market expansion. However, the preceding years brought numerous problems and significant decrease in profits as the business environment of the ski resorts was changing.
In order to better understand this issue, several factors need to be considered. To begin with, one of the main changes that contributed to profit decrease of ski resorts is certainly the one of customer age. Results of research showed that the average age of customers has risen. (Anon, 2007) This was mainly due to ageing of people who were born in period from 1946 to 1964, or so called ‘Baby Boomers’. These people came to an age when they had more responsibilities, work and family obligations being some of them.
For this reason, they had less time and money which could be spent on holidays. This has lead to a great decrease in the number of customers and ski resorts had problems reacting to this occurrence. (Anon, 1997) Problems began to increase as numerous resorts had more facilities than needed and low level of management lead to disaster of many resorts. According to research, the number of ski resorts is decreasing which leads to increased competition and cost of doing business. (Randall, 1996) To continue, the climate change is another major factor affecting the business of ski resorts.
The increased emission of Greenhouse gasses causes global warming which is a great threat to extremely weather-dependant ski industry. Winters are becoming more and more warmer, which affects skiing seasons which are shorter with interruptions and less snow. Finally, trends are constantly changing and this also affected the business of ski resorts. For instance younger generations prefer playing computer games and surfing on the internet to skiing or doing any sport. Furthermore, the popularity of skiing dramatically decreased within young generations as nowboarding emerged and took most of their attention. (Palmeri, 2005) All this lead to a state that most of skiers were of older age, and as mentioned above, these people didn’t have as much time for skiing holidays as when they were young. Question 2: Why is management a more important success factor for ski resorts now, compared to 20-30 years ago? As Ski resorts in the USA started to experience great losses in 1980’s due to changes in the environment, they had to adapt to these changes in order to survive and remain competitive in the industry.
For this reason, management began to play a very important role in the business of ski resorts which started to get more involved in its main activities which are planning, leading organizing and controlling. To begin with, the first major issue that had to be considered was the ageing of customers. As average customer age significantly increased, the managers of resorts had to find a way to attract these customers. First of all, since the new average customer base consisted mostly of people who are married with children, ski resorts had to adapt their facilities and offers to needs of such customers.
For this reason, various family discounts and family packages started to be offered in tourist agencies. Moreover, resorts started offering ski schools for children and families as well as many other activities that can keep children occupied while their parents are skiing. (Folmer, 2005) Furthermore, the needs of customers have significantly changed not only in relation to customer age. In contrast to 1970’s and 80’s when skiing was the only reason for customers to visit resorts, today various interesting non-skiing activities need to be offered in order to attract them.
This is why facilities like adventure parks, cinemas, theatres, shopping centers and other can be found as part of tourist offer of ski resorts. Further on, resorts needed to adapt to growing popularity of snowboarding. For this reason, many resorts invested in building snowboard tracks and special stunt areas in order to attract younger customers who are very fond of this extreme sport. (Palmeri, 2005) Next, another trend could be observed that people belonging to Baby Boom Generation started increasingly buying properties on mountains for their holidays.
For this reason, resorts started to get involved in the real-estate business by building such properties like condos hotels etc and offering them to the market. (McGinn, 2005) To continue, advancement of technology and evolvement of internet are other factors that affected business of ski resorts. Today, large investments are being made by ski resorts for modernizing facilities, building newer and faster ski lifts etc. Furthermore, internet advertising is becoming increasingly used by resorts.
Customers are offered today to make online reservations, inform about weather conditions and forecasts and receive e-mails about new special offers and discounts from ski resorts as part of their customer service. (Bryson, 2002) Finally, managers of ski resorts are perhaps experiencing greatest problems with an issue of climate change and global warming. Numerous resorts in USA have adopted the ‘Sustainable Slopes’ Charter and many of them are involved in the ‘Keep Winter Cool’ campaign. Anon, 2007) This shows that resorts are trying to battle global warming by decreasing their emission of Greenhouse gasses and improve their image as good corporate citizens since many environmental organizations have been accusing them for polluting the environment. Question 3: How is competitive environment of the resorts on the east coast different from that in Colorado? What should the east coast resorts pay particular attention to? The next issue to be discussed is the difference between competitive environments of Colorado and the east coasts ski resorts.
First of all, Colorado has a reputation of one the most attractive skiing locations in the world. With 26 top-class resorts, 6 of them being in the top 10 in the USA, Colorado attracts each winter large number of customers from all over the world. Among many advantages of Colorado are its long winter seasons and great range of vacation opportunities for customers in relation to their skiing skills, income or family status. Nevertheless, Colorado is mostly known for top class resorts offering great service and many different non-skiing activities which round an unforgettable experience for each customer. Weiss, 2002) Perhaps the most known resort in Colorado is Vail which belongs to Vail Resorts Corporation. (McGinn, 2005) There are several corporations owning a number of resorts and there is a great competition between them as they are under pressure to introduce new innovative activities and offers each year in order to attract more customers. While Colorado has an image of high-class skiing destination, resorts on the east coast of USA are experiencing many difficulties when trying to attract customers. First of all, these resorts are of much smaller size than those in Colorado and they have shorter seasons with less snow. Anon, 2007) However, they known for beautiful natural sights and this is why they are mostly offering family experience at low price. Furthermore, east coast resorts are experiencing strong competition not only from Colorado, but also from resorts in Europe which are improving their offers each season. Resorts in France, Austria or Switzerland are offering great experience at accessible prices and, therefore, many people from USA are deciding to try European tracks. For this reason, east coast resorts are losing customers, even though they are offering lower prices than Colorado resorts.
They will need to come up with new ideas in order to retain their customers and attract new ones. Question 4: What possible changes in the environment do you believe will take place in the next few years? Taking into consideration all the above discussed issues, certain assumptions about the future of ski industry can be made, as well as suggestions for future management actions to be taken. To begin with, as competition is getting stronger and many smaller resorts fail, it can be expected that the number of ski resorts will continue to decrease making battle for survival take greater measures.
Various innovations and interesting new offers can be expected, as managers of resorts try to find new customers and keep competitive position in the industry. It can certainly be anticipated that resorts will try to reduce their dependence on skiing by developing and offering a variety of non skiing activities, as it is planned in Vail Resorts, for example. (Folmer, 2005) Furthermore, greater focus on younger generations can be expected, as managers try to gain more customers belonging to this market segment.
This can be done through greater involvement in extreme sports, organizing competitions and building more terrain and tracks for snowboarding and similar sports. Finally, the greatest focus can b expected on fight against global warming. Many resorts are already investing in artificial snow making technology as seasons are getting shorter. Furthermore, resorts will put greater effort in order to reduce emissions of Greenhouse gasses, and greater involvement and support for organizations that are fighting global warming.
In the end summer offers can be expected as an alternative for shorter winter seasons and a way for covering losses endured due to this problem. Conclusion To sum up all the above mentioned, the environment of ski resorts in the USA has changed significantly since 1970 and it brought numerous problems to resorts resulting in decreased profits and failure of great number of them. Managers of resorts had to come up with ideas how to adapt to these changes in order to survive and remain competitive in the industry. For this reason management took over a highly important role in business of ski resorts, and its improvement was necessary.
Further on, competition is very strong among resorts in the USA. However, unlike Colorado which has a world class image, resorts on the east coast are experiencing increased competition from European resorts, and they will have great difficulties in finding ways to keep their customers. Finally, the issue of global warming is forcing ski resorts to find way to keep snow on their tracks or to find alternatives to short winter seasons. All in all, management can be expected to become of greater importance as the number of ski resorts keeps decreasing and competition among the remaining ones becomes