Hermitage Members Club courtesy photo.

by C.B. Hall, VermontBiz Having faced down a pandemic and its side-effects for two full years, all of Vermont’s downhill skiing areas remain open – and they’ve done it with a wide variety of business models.

The pandemic years even witnessed birth of a new ski resort enterprise in Wilmington, where the Hermitage Club had closed down, in 2018, with a figurative mountain of debt to match its actual mountain. Just  launched a new club.

Just as the pandemic was taking hold in March 2020, when a group of the defunct club’s members banded together and bought the ski area for a bit over $8 million at a bankruptcy auction. Nine months later, the new Hermitage Members Club opened on the Haystack Mountain property, as a nonprofit, member-owned and -governed club.

Under the watchful supervision of general manager Bill Benneyan, the new entity (still referred to as the Hermitage Club on its website) “divested all its non-core operating assets,” in his words. He referred to the golf course, four inns and other peripheral activities that had saddled the old club.

He said the resort, which is open only to members and their guests, “is focusing on great skiing and a great club experience.” It already has 325 memberships, up from 180 when it rescued the resort from the scrap heap two years ago.

“We’re adding members every week.” We’re at least two years ahead of our financial growth plan,”

The club’s membership is not huge, but its size works to the resort’s advantage in some ways. While Mount Snow, just a couple of miles to the north, is packing them in, Hermitage’s trails are far from crowded – which means, as membership development lead Lars Pedersen explained, “There’s less friction from skiers, which means higher surface snow quality.”

The resort’s limited hours – Friday, weekends and holiday weeks – give the resort another advantage: Snow-making is conducted on 85% of the terrain, and the Monday-to-Thursday  hiatus. That means there’s plenty of time to “curate the snow,” in Benneyan’s words.

Alluding to this season’s lack of snow, Pedersen conceded that “it’s a funky winter,” but emphasized that “overall, things are going really well.”

At least two other resorts, Barnard’s Twin Farms and Quechee’s Quechee Club, also offer downhill skiing on a club basis, although on a much less conspicuous scale than the words ski area bring to mind.

The term is in fact somewhat misleading in today’s business context. Most of Vermont’s other ski resorts across the state make full use of their opportunities and attributes to provide fun and make money year-round, swimming, mountain-biking, fitness clubs, zip lines, golf and other attractions too numerous to mention keep the resorts going through the snowless months from Hermitage in the south to Jay Peak in the north.

“Some Of The Best Numbers In Our History”

Jay is among the biggest and most established players in Vermont’s winter recreation sector, but it entered terra incognito when the EB-5 visa scandal erupted in 2016.

Both Jay and Burke Mountain – then Q-Burke – came under the control of a federal receiver in Florida and their owners, Bill Stenger and Ariel Quiros, were indicted on multiple federal counts.

In 2018, the two ski areas were put up for sale, and as of this writing, Jay Peak was still on the market. The status of Burke was less clear, as VBM’s inquiries had not received a response by press time.

The sale process has not been simple.

“In the spring of ’20 everything stopped because of the pandemic,” JJ Toland, the resort’s communications director, said in a February 14 interview. “It wasn’t until last spring that things started to thaw, where we had interested parties come and scratch and sniff what we might be about. It’s been a slow process, finding someone who wants to invest eight or nine figures in a ski resort.”

“There are two viable contenders, I would say, that are at the 20-yard line.”

Meanwhile, business has been business.

“Kind of the corporate structure, for lack of a better term, is the federal receiver, Michael Goldberg, at the top, and he hired Leisure Hotels and Resorts to manage [Jay],” Toland said.

The Kansas-based company, in his words has been “fantastic in terms of laissez-faire with us, and let us continue to manage resort operations – because we’ve been generating revenue and bringing profits to the bottom line at historic levels. We posted some of the best numbers in our history over the last six years.”

Then there’s the pandemic.

Heading into the current season, he said, Jay “struck any Canadian patronage out of our budget. That was a gut punch just from an emotional perspective, since Canadian visitorship has historically made up 50 percent of our revenue and visitorship. [but] from a revenue perspective, we’ve seen the US market make up a large chunk of that. We’re running about 35-40 percent ahead of where we thought we would be from a revenue perspective.”

In terms of skier visits, he said, Jay is off only about 22% from the figure for 2018-19, the last pandemic-free season. 

His optimism got a boost on February 15, when the Canadian government announced that, effective February 28, it would ease COVID-related restrictions on travelers entering or reentering Canada from the United States.

“What that means for us is that people can come for the weekend.”

Addressing another problem, seemingly ubiquitous these days, he said, “Staffing has been a challenge but not as large as has been reported for other players in the industry. We’ve done a great job of retaining staff with housing, bonuses, simple perks, lunches together, parties together for those who stuck with us through the receivership and then the pandemic.”

The upshot: “We have the most cash on hand that we’ve ever had in our history. We’ve done a good job in generating revenues and a fantastic job at managing expenses, and that really is a testament to our staff.”

Prospects Looking Up

Activity at the Green Mountain State’s winter resorts “definitely seems more this year than last year,” in the opinion of Geoff McDonald, co-owner of Burlington-based Ski the East, which sells outdoor winter apparel and accessories and puts out promotional literature for eastern ski areas.

“Lift capacities are back up to full. That brings a lot more people out to the hill – lift lines are not as long.”

At Ski the East, he said, “business has been great. We were well situated for the pandemic in that we sell primarily online.”

The firm’s total volume is up at least 50 percent relative to 2018-19, he said.

Sugarbush North has upgraded its lodge inside and out following its acquisition by Alterra. The adjacent Vermont Adaptive space is new, spacious and accommodating. VermontBiz photo.

“Brick and mortar stores are having their best ski season ever… Despite the supply chain issues – which we’ve been experiencing, too – we hear that some stores haven’t seen a surge like this since the ’80s.

“A lot of people were forced to look for things online. That’s bumped up the volume. And more people are wanting to purchase from local companies… I think people have gotten a little jaded with the Amazon experience.”

At Ludlow’s Okemo Mountain, one of the seven Vermont ski areas that operate under chain ownership, prospects are looking up, too.

“I think it’s a reaction to COVID,” communications manager Bonnie MacPherson told VBM. “People have been cooped up a long time. Demand is very high, at least in Vermont.”

“Many of the [COVID] restrictions that we had in place last year have been lifted this year… There are no masks required outside anymore, but we still require them inside. We’re requiring vaccinations in our cafeteria-style dining areas, because of the density of those spaces. In full-service eating areas we don’t require that.”

While the pandemic may be loosening its grip, the weather has had its moods.

“It was a slow start to the season in terms of Mother Nature’s cooperation,” she said. “It was kind of give-and-take in terms of having enough snow.”

In a February 7 interview, she said the mountain had had  “enough snow to be pretty much close to completely open.”

Mad River Glen: A Road Less Taken

Okemo is owned by Vail Resorts, whose portfolio of 40 winter sports venues also includes Mount Snow and Stowe Mountain Resort in Vermont, as well as 37 destinations across the country, and in Canada and Australia.

Colorado-based Vail Resorts is one of the three US corporations with increasing dominance in the winter resort sector.

Utah-based Powdr Corporation owns 11 resorts, including Pico and Killington, while Alterra Mountain Company, also headquartered in Colorado, owns Stratton and Sugarbush as well as 12 other destinations across the country and one in Canada.

That leaves quite a few of Vermont’s 20-odd ski areas with other ownership models, and their variety suggests that the sector thrives on a diversity of business approaches that are suited in each case to the venue’s particular needs and traditions.

While Hermitage is thriving as a private club, and Jay operates on under the control of a receiver, prominent among the other models is Mad River Glen.

The Fayston resort, which has been welcoming lovers of the white stuff since 1948, has followed a road less taken. 

Pictured on the MRG website, the message on the reader board at the entrance to the resort on Route 17 thumbs a figurative nose at the industry consolidation: “Still single after all these years.”

The Ski Vermont website notes that MRG “is one of only three areas in North America that prohibit snowboarding.”

The resort’s website states that MRG “is the only ski area in the nation on the National Register of Historic Places.”

While artificial snow is a mainstay of the industry – and the recently concluded Winter Olympics relied almost entirely on artificial snow for its alpine events – snow-making at MRG is minor, limited to the hill’s lower reaches, resort general manager Matt Lillard said in a recent interview.

Lillard also told VBM that the resort is the only US ski area organized as a cooperative, currently comprising 1,800 individual skier-owners.

Depicting the contrast with corporate ownership, he said, “Our mission is different. It’s not to make a profit. It’s to preserve and protect the Mad River skiing experience.”

That’s been the modus operandi since 1995, when the former owner, Betsy Pratt, decided to sell the property, in the website’s words, “to the only people she felt she could trust: Mad River Glen’s loyal skiers.”

By corporate standards, MRG’s operation is modest.

“We generally operate in the red 75 percent of the time,” Lillard said. The flush years cover the deficits from the lean ones.

“Our goal is to cover our capital needs and our reserve needs. If we make enough of a profit for capital needs and reserve needs, we make a patronage fund [but] that has never happened yet. All the money has gone back into the mountain.”

The capital program is likewise modest, amounting to $50-100,000 in most years.

“It’s been a little bit larger these last couple of years. We went to a capital campaign and got $5 million, so we invested a lot.”

The Nonprofit Model

It’s not as if Mad River and the private clubs are the lone exceptions to the large scale of areas such as Killington and Sugarbush.

Even among the state’s smaller ski areas, there’s quite a range of models.

At its Hard’ack Recreation Area, the City of St Albans provides a hill with a vertical drop of only 100 feet, but people do ski down it.

Hard’ack also offers cross-country skiing, snowshoeing and, in the summer, hiking trails and disc golf, all sustained by donations, fund-raising events, and rental of the recreation area’s lodge.

On the other side of the state, the nonprofit Lyndon Outing Club operates a small slope entirely with volunteers in the eponymous town.

But the club does not make snow, and the hill was however closed on Presidents Day Weekend because of a lack of the white stuff – a chronic affliction that the enterprise, according to its website, has survived repeatedly since it opened in the late 1930s.

In Corinth, Northeast Slopes, which like the Lyndon club is an all-volunteer nonprofit and does not make snow, was also closed on the holiday weekend, and for the same reason.

“A few times a year Mother Nature reminds us who’s actually in charge around here,” a post on the ski area’s website philosophized.

West Windsor’s Ascutney Outdoors, likewise an all-volunteer, all-natural-snow nonprofit, was also closed on Presidents Day Weekend after the preceding week’s watery assault from the skies.

In a February 21 phone interview,  Ascutney Outdoors’ pro-bono executive director, Glenn Seward, brushed off the weather issue.

“We’re closed now, unfortunately, but we’ve got more weekends ahead of us, for sure.

“We have a keen eye on financial sustainability, and snow-making does not fit into that picture,” he addressed an obvious question. “If we have 12 inches of snow on the ground, we’re doing really well. We make do with very little, money-wise and snow-wise.”

Operations depend on a cadre of more than 100 volunteers.

“It essentially takes, depending on what we’re doing, roughly 20 to 30 volunteers a weekend to make the wheels turn,” Seward said.

“We look to our operations to sustain the overhead,” he told VBM. Revenue comes from day tickets and season passes.

During the “very busy” warmer months, income has come from rental of the property for such things as weddings, reunions, an outdoor drama presentation by the Weston Playhouse, and a mountain-bike competition that drew 1,500 riders to the property’s 40 miles of trails.

“In a year like this, when things aren’t so good weather-wise, we’ll look to donations to sustain the operation,” he added. Annual fund drives have been “very successful.”

“We try to maintain a reasonable rainy day fund,” he continued, with apt double entendre. “We survive by being very fiscally prudent.”

Then there’s Cochran’s Ski Area, the legacy of a family that has placed six of its members on the national ski team, with two Olympic medals to their credit – the more recent one belonging to Ryan Cochran-Siegle, who took a silver in the Super-G at the Beijing games on February 8.

The Richmond ski area began as a backyard project in 1961 and grew from there, becoming a 501(c)(3) nonprofit under the IRS code in 1998, and announcing its mission as providing ‘area youth and families with affordable skiing and snowboarding, lessons and race training, in the Cochran tradition,” in the words of the ski area’s website.

As for the business approach, the website tells us, “Mickey and Ginny Cochran operated their backyard rope-tow with the support and commitment from the local community. Working together each year to cobble together the people, machinery and never-quite-enough-snow, they were able to introduce countless kids to a favorite Vermont winter pastime. ‘It was always a non profit,’ Mickey’s son Bobby likes to joke, becoming a 501(c)(3) just made it official.'”

So, among Vermont ski areas, small works, too.

Typical of the nonprofits are a reliant on volunteers, limited hours of operation, relatively simple lift technology, and a lack of snow-making equipment – or, in more positive terms, a reliance on Mother Nature for the primary resource.

On that basis, Ascutney Outdoors is operating for its fourth season, while Cochran’s, Northeast Slopes, Hard’ack and Lyndon have all survived the vagaries of nature and many another challenge, albeit with some changes in structure, for more than a half-century.

Sustainable, But For How Long?

The warm, spring-like deluge on the eve of Presidents Day Weekend and the mid-winter school break is hardly good news for skiers or ski areas. While it shut down some small areas, the news was not quite as bad at big winter resorts with plenty of artificial snow and/or alternative attractions – Jay Peak’s water park comes to mind – to keep the arriving throngs happy.

Still, the specter of climate change haunts the sector.

A rainy winter leaves one wondering how many Vermont ski areas will fold up as the climate warms, threatening an even more meager accumulation of the white stuff in the years and decades ahead.

Can the little areas survive?

“Certainly when you look at the capital needs of the business, those that have more resources have access to more snow-making and things like that,” Ski Vermont president Mary Mahar said.

“The ski areas have become more sustainable in their operations. Snow-making has transitioned into more electrification. They used to depend on diesel compressors… The technology has really transformed and become much more efficient.”

It has also reduced operating expenses.

“We’ve been making snow at every single opportunity, given the weather,” Okemo’s MacPherson said, exemplifying how big ski areas react when natural snow doesn’t suffice.

Small ski areas have their own reasons for not making snow – and in any event snow-making requires cold weather much as the real stuff does.

As civilization continues to stumble in its attempts to stop the climate-change juggernaut’s progress, the fundamental question thus remains: Can snow-making bail out ski areas that find themselves increasingly abandoned by Mother Nature? How vulnerable, and how increasingly vulnerable, are Vermont ski areas to that juggernaut?

Mahar approached the question politically, “It’s really important that the country gets to some climate solution. That’s really going to move the needle. If we were to hit all our emissions targets in this state, and nothing happens in the rest of the country, we’re really not going to get there… We really need a bipartisan solution to climate in the country.”

Turning to other issues that face the industry, she recalled the pandemic-enforced shutdown of the state’s ski areas in March 2020 as “pretty difficult.”

“The next, following year was difficult because we were operating under state guidance. The biggest hurdle, I think, was the interstate travel requirements. People were expected to quarantine when they came into the state. For an industry that gets the majority of it patrons from out of state, that was challenging.”

Secondary lines of business within the industry, as opposed to the core business, “were impacted more – lodging, food and beverage, for example,” she said. “We’ll probably see that food and beverage will still be affected to some extent by the lingering impacts of the pandemic.”

Then there’s the workforce issue.

“We’re looking at areas that are using more automation in their systems – technology is a better word,” she said. “It’s a trend that existed before the pandemic, but it was accelerated by the pandemic.”

“Over the past decade-ish we’ve been using international workers as a help for our workforce, and that was impacted just because of the widespread workforce challenges. There’s a lot more pressure on getting those visas… We’re working with the National Ski Areas Association on trying to get access to more of that labor.”

Whatever the multitude of hassles in recent years, she was sanguine.

Among the states, she noted, Vermont’s winter resort sector typically ranks fourth in size, behind Colorado, California, and Utah.

“We slipped back to fifth place behind New York [last year], and that was directly attributable to the interstate travel requirement.”

Compared to Vermont, that is, far more prospective patrons could reach New York ski destinations without crossing a state line.

She saw the current season as something like a turning point, “Anecdotally, in talking with our operators, it’s been a good season. It was a slow start, but certainly being able to welcome people back from other states was huge.”

“We fully expect that we’ll regain our number-four status.”