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Dollar Diplomacy

Fall Line
posted: 03/17/2005

Last year, Bill Smith skied Switzerland, shuttling from the lakeside city of Interlaken to the quaint Alpine resorts of Grindelwald and Murren, nestled under the 13,642-foot Jungfrau. This year, the building contractor from Kings Lynn, England, opted instead to stay in the old West mining town of Frisco, Colo., and ski at Keystone and Copper Mountain.

The reasons for the change: The snow, especially in the early season, tends to be better. Everyone speaks English. American liftlines aren't the elbow-battle Europeans have grown accustomed to. And best of all, the dollar is on a two-year slide. "There's no doubt about it: The pound's strength against the dollar has made a big difference," Smith says.

How big? Meals were about 30 percent less than in Switzerland, the condo was bigger for about the same price, and Smith picked up some winter wear, along with new skis and bindings for a little more than half what he might have paid in England."I feel like I was able to buy everything I needed," Smith says.

Globalization is coming to the slopes. As the dollar sinks to near-record lows against the pound, the euro and the yen, foreign skiers have flocked to U.S. resorts. The Brits continue to be North America's best ski customers, while new groups are discovering American slopes. European tour operators say their business to the U.S. is up anywhere from 10 to 80 percent. Germany's Canusa Touristik is expecting U.S. bookings to grow by 70 percent this year. London-based Ski World says its North American sales are up by nearly one half, mostly driven by skiers heading to the U.S., and Aspen, Colo., alone is expecting double-digit growth in international visitors. "When you're on the mountain, it's obvious there are more people speaking different languages," says Raelene Davis of Ski Utah, the state's industry trade group.

The falling dollar helps U.S. resorts in other ways. If Val d'Isere and Zermatt are more expensive, U.S. skiers are more likely to hit the slopes stateside. Puerto Ricans, for instance, are schussing Stowe, Vt., like never before. And the Canadian dollar this winter topped 85 cents, up from less than 65 cents two years ago. That means a vacation at Whistler or Tremblant is more than 30 percent pricier. So even though Canada remains a good value, fewer U.S. skiers have gone north this season. "The dollar doesn't go as far in Europe or Canada, so Americans are having another look at U.S. offerings," says David Perry, Aspen's marketing chief.

The soaring loonie has Canadians finding their way back to U.S. slopes, too. In Vermont, Jay Peak's revenues from Canada are up 20 percent. "Now that their dollar is really strong, Canadians will come down here and say, 'I'll have a couple of beers after skiing,'" says Bill Stenger, Jay Peak's president.

And expect the foreigners to keep coming. Since most European skiers travel on package tours, they generally pay prices that are set the preceding summer. While the euro had jumped from about $1.05 two years ago to $1.20 last summer, by fall it was flirting with $1.35. That allowed tour operators to give generous late discounts, and foreign skiers have paid far less this season for lift tickets, burgers and beers. But the real benefit will show up next year, when package prices will likely drop as much as an additional 10 percent. Indeed, Crystal Holidays, the biggest ski tour operator in the U.K., is expecting so much new business next season that it's planning to charter two jets a week from London to Denver.

U.S. resorts have been working hard to capture the international visitor. Aspen has representatives in its top five foreign markets. Vail has increased its international marketing budget in the past few seasons. Ski Utah has stepped up its international advertising since the 2002 Salt Lake City Olympics. And Colorado's ski resort trade group sponsored a tour of eight cities in Germany and Austria last fall. "We've added the falling dollar aas one of our top messages," says Rob Perlman, president of Colorado Ski Country USA.

Still, not all foreigners are ready to give up Europe's open pistes. One big worry: U.S. immigration restrictions. Rules requiring foreign visitors to be fingerprinted and photographed have spooked many travelers. "One concern coming over was the immigration issue," says Stuart Middleton, a Scot who skied Vail, Keystone and Breckenridge at Christmas. "You don't think about your passport when going to Canada."

Other issues are price and proximity. It takes at least 12 hours to get to any U.S. resort from London, whereas U.K. skiers can reach the Alps in about four hours, and airfares to the U.S. from Great Britain are typically more than twice as much as flights to France, Switzerland or Austria. Largely due to the cost of the flight, Crystal Holidays sells weeklong trips to the U.S. for about double the price of its trips to Switzerland and France. Yet even groups that have farther to fly, such as the Australians, are finding reason to take a winter ski holiday in the U.S. "Three or four years ago it was very expensive for us to travel to the States, but now you'll find a lot of Australians over for the dollar," says Paul Costa, a contractor from Melbourne who skied Alta in January with his family. "And of course it helps that you have some of best skiing in the world.

MARCH/APRIL 2005

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