The Start Haus saw the writing on the wall two years ago. After two consecutive lackluster winters, the ski shop began selling stand-up paddleboards and accessories in the summer of 2013, and even hosted a weekly free SUP race on Donner Lake. This year Start Haus is making an even more radical change, transitioning to a bike shop for the summer and becoming a Giant Bicycles partner store. After nine years of only selling skis year-round, Start Haus is now remodeling, building a bike service center, and bringing on a full-time bike master mechanic, although it will still sell skis.
“We are definitely motivated by the poor winters,” said Leigh Dexter, who does ecommerce and information technology for Start Haus. “We decided to go all in and become a bike shop … because in winters like this last one, people mountain bike all year round.”
Start Haus is not alone in changing its business model to adapt to changing weather. With four low-snow winters in a row, businesses from ski resorts to retail stores to restaurants are feeling the heat as the snow dries up earlier in the season and visitors stop coming to Tahoe. To stay ahead of the game and survive, businesses not only have to change what they sell, but they are also ordering less goods, putting merchandise on sale earlier, and getting creative with promotions and deals, perhaps best illustrated by Squaw Valley’s announcement at the end of March of a new program that lets passholders roll over unused days towards the purchase of a season pass. As Alpenglow Sports owner Brendan Madigan said, “If you aren’t adaptable, you will fail.”
TOUGH TIMES
Like the Start Haus, Tahoe Dave’s Ski & Boards saw a pattern emerging after several years of low snowfall. For this past winter season, Dave’s purchased around 30 percent less merchandise, and is ordering the same amount for next winter.
“We cut to an amount that lets us get through a very lean year,” said Marina Marenco, Dave’s CFO.
These changes came after the 2013-2014 winter, which was especially hard on Dave’s due to the timing of the snow. With hardly any snow before Christmas, Dave’s five stores missed out on the normal spike in business around the holidays.
“I don’t think people realize that when we lose Christmas, we lose an extraordinarily large amount of money,” said Marenco, noting that Dave’s brings in about 25 percent of its revenue over the two-week holiday period. “Miracle March does nothing for us. It’s all about Christmas.”
In that, Dave’s and other Tahoe/Truckee businesses lucked out this year with a sizeable snowfall in December.
“If we get enough snow at the right time, it’s better than heavy snow,” Marenco said. “As long as it’s cold and the ski areas are making snow, people love the sunshine.”
According to Marenco, the Christmas bump generated by the December snowfall and a few other storms lasted through Martin Luther King weekend, but business began to taper off as the snow stopped falling, with a steady decline after Presidents Weekend. Although Dave’s two Tahoe City stores stay open year-round (the Kings Beach, Squaw Valley, and Truckee locations always close for the summer), winter brings in approximately 75 percent of Dave’s income.
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“We saw a drop off [in sales] last month [February], which should be really strong,” she said. “It has us questioning what we’re doing. But sometimes as long as the ski resorts can make snow, we’ll be okay.”
Paco’s Bike and Ski in Truckee is also feeling the pain of four poor consecutive winters. Owner Paco Lindsay said his sales are down 20 percent from last year, and 60 percent down from good winters. As of mid-March, he had already switched his store from a ski shop to a bike shop, which is the earliest ever. Lindsay is also taking a hard look at his Nordic business.
“We are still doing cross-country, but it makes me rethink what we are going to offer next year,” he said. “We have to cut back.”
Lindsay said he survives by planning ahead, reinvesting in the business, and selling new products like fat bikes, which helps a little but doesn’t make up for the lack of ski business.
“I was lucky that I had 20 years of good ski business,” he said. “Now we had this train wreck. I feel bad for some of the new guys in town.”
Alpenglow Sports in Tahoe City is also buying less merchandise, and putting goods on sale as early as January when the store offered 40 percent off to its email database. The sale opened to the public the second week of February, three months early. Normally, Alpenglow doesn’t offer these sales until Memorial Day weekend.
“After four years of getting hammered, we gambled and saw the writing on the wall — the forecast did not look good,” Madigan said.
Four years of short winters and longer summers have also changed what Alpenglow sells and when. The store has started selling summer clothing two months earlier and winter wear six weeks earlier.
“You have to adapt. We have changed the amount we buy and the delivery dates,” Madigan said. “You have to buy less or you are walking a really tight tightrope.”
THE TRICKLEDOWN EFFECT
It’s not just ski shops and outdoor retail stores that are feeling the pressure of four meager winters in a row. Restaurants are also being squeezed. Douglas Dale, owner of Wolfdale’s in Tahoe City, said his business is down around 25 percent from last year. The restaurant had a good Christmas thanks to the early-season snow, but “that’s all we’re living off of, really,” Dale said. “This has been the worst of the four winters. Visitors are getting more suspicious of the weather.”
Dale has reacted by cutting back employee hours and starting his two-for-one specials, which he normally offers in April, a month and a half early.
“It takes incredible discipline. You have to act like a squirrel and pack it away,” he said. “We are becoming more like Cape Cod — all summer and nothing else.”
Dale would like to see the North Shore diversify its winter offerings to include activities like an ice rink and recreation center.
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“Tahoe City needs to think like a village to keep people here,” he said. “We need some way to entertain people other than skiing.”
West Shore restaurants were especially impacted by the fact that Homewood Mountain Resort was barely open this winter. According to its Facebook page, after the ski resort opened on Dec. 20 it closed on Feb. 2 due to warm temperatures and low snowfall, reopening on Feb. 13 for 10 days before finally calling it quits. This meant a lot less après-ski business for Sunnyside Resort.
“We had half as many head counts from a good winter,” said Sunnyside’s general manager Jeff “Ox” Oxandaboure. “When you go from 300 dinners a night on weekends to around 150, that’s a big drop in sales. This is the worst winter of all four.”
Oxandaboure said that even Sunnyside’s special nights aren’t attracting as many people. Ten years ago, its fish taco nights brought in 1,000 customers. This year, they had 300 to 400 people.
“We are doing specials four nights a week,” he said. “But compared to a good winter, nothing works. You can’t squeeze blood out of a turnip.”
With less ski area employees and visitors, Oxandaboure said they didn’t even open the dining room during many winter nights, only serving in the bar because of a lack of reservations.
“We’re snow farmers in the winter,” he said. “If we don’t have snow, all the things we do are marketing to less people.”
THE HARDEST HIT
While Homewood was able to stay open for a total of around two months, the Tahoe Cross Country Ski Area only squeezed in four days. As a result of four consecutive bad winters, the ski area has seen season pass purchases drop by 20 percent each year, and Tahoe Cross Country Board President Jim Robbins expects sales to be even worse next year. Season passes represent one-third of the ski area’s budget. On top of that, the ski area receives half of its revenue during the three weeks over the Christmas holiday. But Tahoe Cross Country was open for less than a week during that period, and the Tahoe City Winter Sports Park, which Tahoe Cross Country began operating in 2012, was never able to open. On a positive note, the Tahoe City Golf Course, home of the winter sports park, was open 50 out of 80 days last winter, and saw 500 players from January through March. It became fully operational in mid-March, the earliest ever.
“It’s a pretty devastating time to be in the ski industry,” Robbins said. “Our finances are in dire straits.”
The good news for Tahoe Cross Country is that its children’s programs are thriving. Despite the poor winters, there was no drop off in registration for Strider Gliders, which has around 300 kids enrolled, and the year-round development Nordic ski team, which started last summer, has grown to be the biggest in the area with 42 athletes.
In an attempt to stay open all year, Tahoe Cross Country started renting bikes two summers ago and founded a successful junior mountain biking program. Its new motto is “ski, bike, run.”
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The ski area’s lack of snow has also affected The Great Ski Race, Tahoe Nordic Search & Rescue’s major fundraiser that provides its $20,000 annual budget. The race has been cancelled three out of the last four years, and when it was held in 2013, turnout plummeted to only 60 percent. As a result, Search & Rescue’s budget is down a cumulative $75,000, according to board president Chris McConnell.
“We are getting creative with fundraising, and we had to get frugal,” he said. “Aging equipment has to wait to be replaced and repaired.”
TNSR has tried its hand at new fundraising events, like the Tahoe City Grill Fest, but that only raised $2,000. It currently has a crowdsourcing campaign on Crowdrise called RescueTheRescuers2015 with a goal of raising $52,500.
“We will never abandon The Great Ski Race,” McConnell said. “We are committed to running it into perpetuity.”
MAKING IT WORK
While the alpine ski resorts have two advantages to counter weak snowfall that the Nordic areas do not — higher elevations and snowmaking — the recent announcement by Squaw Valley of a new pass program reveals that even the big resorts are concerned about the lack of snow. At the beginning of spring, Squaw Valley Ski Holdings — which had to cancel the World Cup skicross and snowboardcross events scheduled for March at Squaw — introduced its Worry-Free Guarantee, which lets Gold and Silver passholders who ski or ride less than five days next season receive a $100 credit for each unused day (up to four days) towards the purchase of a 2016-2017 Tahoe Super Pass. The offer lasts until May 7.
“We recognize it can be challenging for skiers and riders to commit to a season pass purchase when they don’t know how often they’ll actually be able to ski the following winter season due to reasons that may be out of their control,” said Squaw Valley Ski Holdings CEO Andy Wirth in a press release. “By introducing the ‘worry-free guarantee,’ the intention is to provide our passholders with reassurance that they will realize the full value of their season pass purchase.”
It is not clear how much the lackluster season impacted ski resorts since they don’t share skier count numbers, but SVSH spokesman Michael Radlick said that parking lots at Alpine Meadows and Squaw were full over peak holidays. Nevertheless, the Worry-Free Guarantee was created for a reason.
“Our intention is to assure our passholders that they will be able to realize the full value of their season pass and eliminate any concern or hesitation that the weather, or any other factor that might influence their decision to ski or snowboard, might have on their season pass purchase,” Radlick wrote in an email to Moonshine Ink.
With the winter season behind us, businesses are banking on a good summer despite the drought and concomitant threat of wildfire, which can be equally as damaging to business as no snow. As a result of last September’s massive King Fire, Sunnyside saw its business drop in half during that period, reported Oxandaboure.
“We’ll have water here,” said Dave’s Marenco. “People still want to get out of the valley and recreate. The economy seems better, it seems more people are willing to spend money.”
