14.0°
Royal Gorge trails offer breathtaking views. |
Comments (5)Royal Gorge
Can they make ends meet?
By Tim HausermanPublished: December 13, 2008
click for slideshow
Royal Gorge Cross Country Ski Area announced in a letter to season pass holders this fall that they will be cutting back on days of operation and grooming schedules this winter. In an effort to cut costs and “break even” the nation’s largest cross-country ski resort is planning on being closed on Tues. and Wed. (except holiday periods) and rotate which areas they will groom throughout the rest of the week.
The recent changes bring up an interesting question: What are the challenges of making ends meet at a cross-country ski center? And what are the special issues for Royal Gorge?
Royal Gorge has a lot going for it. An extensive and incredibly beautiful network of trails: You can ski for three days and never ski the same trail twice, all while enjoying tremendous terrain and jaw-dropping views. Located on Donner Summit, an area that sees more snow than almost anywhere else in North America, Royal Gorge (almost) never has to worry about getting enough snow. The new owners of Royal Gorge, as of 2005, also bought the Ice Lakes Lodge, where a skier can spend the night, enjoy fine dining and then walk across the street to a trailhead. Also, Royal Gorge is the closest cross-country ski area to the foothills and the Bay Area.
Royal Gorge also has some major challenges. While it is beneficial to get all the snow that Donner Summit receives, it also leads to much higher expenses for grooming and to skiers avoiding the area when the big blizzards arrive, making I-80 nearly impassable. Donner Summit also has a small year-round population base, making it more difficult to sell season passes or find local employees. Truckee may be only 10 miles away, but the close proximity of Tahoe Donner Cross Country and the challenge of I-80 during storms, make Royal Gorge a less attractive season pass choice for Truckee residents. And it certainly didn’t help the financial picture when the Wilderness Lodge burned down in 2003. Located in the center of the trail system, this large rustic lodge was a true delight, and provided a steady stream of skiers to the resort.
The Economics
Cross-country ski areas are considerably less expensive to run than a downhill resort, but the number of skiers, season pass holders and ticket prices are also considerably lower. The biggest expense for most cross-country ski areas is grooming, which includes fuel, grooming machines and the skilled operators who run those machines. A new grooming machine can cost $200,000 and they eat up a lot of fuel.
The next highest expense is non-grooming related labor expenses, including instructors, ticker sellers and rental shop personnel (which at some areas may be all the same person). Nordic centers also have use fees or the cost of purchasing the land. Royal Gorge is primarily on private land, which was recently purchased by the current owners at great expense.
Income at a cross-country center comes from season passes, ticket sales, equipment rentals, and a small percentage from food, waxing and merchandise sales.
To understand the economic issues Royal Gorge Cross Country confronts, its instructive to look at nearby competitors. The two closest Nordic ski areas to Royal Gorge, Tahoe Donner Cross Country (TDCC) in Truckee and Tahoe Cross Country (TXC) in Tahoe City, are both run by nonprofit organizations. At Tahoe Donner, one of the largest residential developments in California, the homeowners association owns the land and oversees the ski area. Tahoe Cross Country is on public lands, and run by a ski education association.
Both TDCC and TXC obtain a major percentage of their income from local skiers. Kevin Murnane, Manager of Tahoe Cross Country, estimates that in an average year 40 to 50 percent of income comes from trail passes and rentals, while 30 to 40 percent comes from the more than 600 season passes they sell. “We look at season pass holders as paying for the grooming, and so we groom for them: every day and as many trails as possible,” Murnane said.
Royal Gorge, on the other hand, gets “considerably more income from day passes than season passes,” according to Mike Livak, the resort’s project manager.
For both Tahoe Cross Country and TDCC, close connections to the local community are key. Tahoe Cross Country has an inexpensive after-school kids program called Strider Gliders, which brings more than 150 elementary school kids onto the trails one day a week. The goal is to get kids interested in cross-country skiing, and the community has responded positively. TDCC has a similar focus, with a major portion of their income coming from season pass sales purchased by Truckee and Tahoe Donner residents.
New Royal Gorge manager Dave Achey is excited by the future. “What separates us from everyone else is the beauty of the land. We have Point Moriah. You can stay at Ice Lakes Lodge and skate to Sugar Bowl to have lunch. We have hut-to-hut skiing.” What they don’t have, however, is a lot of skiers mid-week. By cutting out Tuesdays and Wednesdays, the resort believes they are only losing 20 to 30 skiers per day and eliminating major labor expenses. Achey asserts that not only will eliminating two days a week lower labor costs, but it will also make it easier to find employees. Now the resort can hire people to work a five-day week, while if they were open seven days a week they would need to find lots of part-time workers, a challenge on Donner Summit. With grooming being the biggest expense, cutting back on grooming is a major cost savings. The resort plans on rotating grooming so that not every trail will be groomed every day. While this will reduce costs, it remains to be seen if less trails being groomed will lead to decreased ticket and season pass sales.
On the income side, Royal Gorge is looking into ways to increase season ticket sales, especially on the western slope areas such as Nevada City and Auburn. “We are looking into the downhill skier market,” Achey says. The last few years more downhill skiers have found that cross-country skiing complements their downhill skiing.
“Everywhere I turn I see opportunities,” Achey says. “We are really trying to launch better skier relations. I want to see this place be successful.”
So what do other people in the cross-country world think about Royal Gorge’s plans? In several conversations I had, people understood the economic realities that Royal Gorge faces, but there was some fear that these changes were the beginning of the end for the resort. Most people had a suggestion or two for the resort. One suggestion was to cut back on the total kilometers of trails at the resort, but groom those trails regularly, so skiers would know they were getting a top-notch product. Others suggested lowering the day pass rate, which is higher than other Nordic centers in the area. Another suggestion was to provide a special reduced rate ticket to those with season passes to another resort. These active skiers would love to ski Royal Gorge, but the Gorge’s $29 ticket price feels pretty steep when you’ve paid for a season pass elsewhere. Another key to the future success of Royal Gorge, cited by several experts, was getting the Wilderness Lodge rebuilt and operational.
Dan Wexler from the Donner Summit Area Association (DSAA) suggested “appealing more to recreational cross-country skiers rather than expert types.” Recreational skiers are a large market and include many people who have never skied on groomed trails before. Achey from Royal Gorge agrees, saying that attracting more recreational skiers will be an important part of their marketing efforts. DSAA also offered “to help provide ideas, insights and experience to help improve the popularity and overall experience at Royal Gorge.”
Another possibility for Royal Gorge is to allow dogs on the trails. Tahoe Cross-Country has found that allowing dogs on 8 kilometers of trail has been very popular and helps sell both season passes and day passes. (And dogs have to buy tickets as well!)
Royal Gorge also might pick up some lessons from Spooner Lake Cross Country. While a much smaller operation than Royal Gorge, Spooner confronts some of the same issues. Located on the Nevada side of the lake on Spooner Summit where Highway 28 and Highway 50 meet, it’s a beautiful spot for skiing, but is located away from major population centers. Spooner has built several log cabins on the trail that they rent out to skiers in the winter, and bike riders in the summer. They purchased a grooming snowmobile that they use in between storms to keep the trails fresh at a fraction of the cost of running the big cat. And they run a bike rental and Flume Trail shuttle operation during the summer months to help make ends meet.
Will Royal Gorge take tips from other resorts and/or develop other changes to stop the red ink? The answers are yet to be seen. Stay turned.
Royal Gorge is open once the snow flies from 9 a.m. to 4:30 p.m., Thursday to Monday, and seven days a week during holiday periods. Tickets are $29 on weekends and holidays, $25 mid-week. 530-426-3871, royalgorge.com.
~ Tim Hauserman wrote “Cross-Country Skiing in the Sierra Nevada.” He teaches at Tahoe Cross-Country Ski Area.
5 Reader Comments so far ...