Every time I turn around there is yet another proposal to implement rent control. The…
Will ski town real estate be impacted by ski safety act?
I hope everyone is off to a good start this year. With winter upon us, hopefully everyone is getting a little time to hit the slopes. Ironically I spend a ton of time in the mountains and I’ve made loans in almost every resort town in Colorado but I don’t ski (funny part is my 5 year old is skiing blacks and she was coaching me on how I should learn the pizza pie). I took the above picture outside crested butte towards the black canyon on my way to inspect a property. Thinking of skiing, I read an interesting article that could drastically reshape the ski industry in Colorado. The Colorado Supreme Court has agreed to hear a case that challenges the “ski safety act” passed in 1979. (This act basically protects Colorado ski resorts from liability and limits monetary awards due to injuries on the slopes (see Denver Post Article).
There are two recent deaths as a result of avalanches within the ski area boundaries (here is one of the cases regarding an avalanche that killed a skier on an open run at winter park. In the lawsuit the crux of the case hinges on whether avalanches on a designated ski run (Inbounds) that is open and maintained by the resort are an inherent danger of skiing. Or, as the lawsuit claims, is an inbound avalanche preventable and therefore the resort liable. Although this ruling could have a large impact on the ski resorts bottom line, is there a bigger problem brewing for ski resorts?
What does a challenge to the law mean for ski resorts? If the court rules that inbound avalanches are not an inherent danger of skiing and are not covered by the ski safety act then there could be hundreds of millions of dollars in liability by the ski resorts due to deaths/accidents. This ruling would also be precedent setting and could open up resorts to further challenges of the ski safety act and drastically increase the lawsuits to the industry
What happens as a result of increased liability? Insurance costs will no doubt go up to cover the resorts increased riskiness to claims, lawsuits, etc… As if lift prices were not high enough, these more than likely would be increased to offset the costs. It will be fascinating and precedent setting to see how the Colorado Supreme court rules.
Liability is not the biggest problem facing ski resorts? What is? The real issue that will alter the landscape is changing demographics (http://www.mrablog.com/explaining-ski-industry-demographics/). This is a very interesting article (albeit 4 years old) that discusses the changing demographics and attitudes on skiing. Also here is a recent article on ABC: Snowboarding slides (http://abcnews.go.com/Sports/wireStory/snowboarding-takes-slide-popularity-experts-unfazed-28422113) Will be interesting to see how the predictions play out.
Will Real Estate be impacted? This is an interesting question, if the liability claims get drastically out of hand (highly unlikely) could ultimately impact ski town real estate. The mountain communities are on fire currently and I don’t see this changing anytime in the near future. Long term the demographic shifts and declining number of skiers could make things interesting (http://www.mrablog.com/explaining-ski-industry-demographics/ )
You are probably wondering, how skiing is declining as you sit on I-70 for 5 hours to go 5 miles on a big weekend. Good question, from the blog above, as the demographics shift certain groups are skiing more days (not an actual increase of skiers, this is not great for the industry, the folks skiing more days typically live near the resorts and as they age have more free time. The actual number of skiers taking up the sport and participating is declining. Colorado is a bit unique since we are one of the few places in the country with consistent snow due to the altitude of the mountains so the impact might be mitigated, only time will tell how this plays out.
Update: 1/29: Ironically a few days after I did this article, the same issues above were raised at the Snow Show which is a gathering of many of the executives in the ski industry: http://www.denverpost.com/business/ci_27412877/dip-visits-mars-snow-show-wiew-through-rose : they are also very worried about changing demographics and the pricing out of younger generations of skiers