AlpineZone Challenge 2009 – Stephen Kircher of Boyne Resorts

The AlpineZone Ski Area Challenge was designed to provide a method for our forum members to get official answers to skiing-related questions directly from a ski area representative. Stephen Kircher, President of Eastern Operations of Boyne Resorts (Sugarloaf, Sunday River, and Loonin Boyne Falls, Michigan, took the AlpineZone Ski Area Challenge and provided the following responses on 8/20/2009:

WJenness:  How has the Chondola changed the summer experience at the River? Has it been a success thus far? I need to make it up there for a weekend, but it hasn’t happened yet.

(AndyEich) Has the Chondola lived up to expectations? What about night skiing? What improvements to either are planned, if any? Post-Chondola, what is your assessment of Sunday River’s lift infrastructure?

Stephen Kircher: The Chondola has definitely changed the landscape and guest experience at Sunday River both winter and summer. In the winter the lift has met our expectations of the initial objectives: it moves large numbers of folks out of the South Ridge area quickly and on cold weather days/nights out of the elements, The Chondola is much easier to load that the older fixed grips it replaced and expedites the flow of traffic through what was one of the most congested locations on the mountain. It also modernized and cleaned up the look of the South Ridge. It has reinforced South Ridge the center of activity in our envisioned “vibrancy zone”. The Chondola has allowed us to create the 12 hour skiing amenity and all the accompanying apre’ ski activities that are helping to drive food and beverage sales significantly. The combination of the Chondola and Lift 2 create a great first impression and allows us to separate the novices from the avid skiers more successfully. It has also allowed us to create a venue for special events and dinners at the top of North Peak.

In the summer, the Chondola has given us a real platform to drive the mountain bike and scenic lift ride programs. The numbers for mountain biking at this point are steadily growing and as we add more novice terrain we expect it to increase dramatically.

As to the future, we continue to explore upgrading/realigning options for current lifts and as demand warrants we will move to take advantage of the three additional mountain peaks available. Currently our uphill lift capacity meets our guest visitation levels and is balanced from a flow perspective. It should be noted that there are numerous lift upgrades and procedure changes underway or in the planning stages to improve their wind reliability and aesthetics. Many of the benefits of these efforts will be apparent this upcoming winter.

deadheadskier: What plans are there for future lift upgrades at Sugarloaf. My only complaint of the area are the antiquated lifts. Are future fixed grip lifts more likely than detachable technology considering they perform better in high winds, which is obviously a frequent issue at Sugarloaf.

(AndyEich) How to improve Sugarloaf’s lift system is a point of considerable debate. Is a path forward becoming clear?

(WJenness) There have been rumors that Boyne is looking to sell The Loaf. Do these have any foundation in reality?

Stephen Kircher: We have two key initiatives ongoing: First the upgrade and modernization of the snowmaking system and secondly improving the wind tolerance of the lift system. Both are in an effort to improve the access to the great skiing of Sugarloaf more consistently in challenging weather patterns. This we feel will drive more business and lower costs that will allow for more robust upgrades or terrain expansion. The addition of the much more efficient snowmaking equipment in particular is lowering the energy costs making Sugarloaf far more green and viable economically than in the past. This will be a critical accomplishment to then begin to justify replacing or expanding the lift system in the future.

However, even with these fundamental changes to the business cost structure, increasing EBITDA enough to support NEW detachable lifts is a very challenging proposition. Without a rebirth of the real estate market in a meaningful way, I suspect that only newer USED fixed or detachable lifts would likely be the equipment that would either replace or expand the Sugarloaf lift system.

@ AndyEich: There continues to be numerous lift options that are under consideration including a Spillway replacement, West Mountain expansion and a lift to support low volume tree skiing on Burnt Mountain. None are imminent in the next year however. We want to highlight that we are attempting to make improvements to Sugarloaf while trying to keep skiing affordable. New modern high speed lifts at $5m per installation would significantly increase the cost structure of that skiing experience if there was not a corresponding large increase in skier volume or real estate driving profits associated the investment. We are suspect that either of these scenarios are possible in the current economic environment.

We want to reiterate that dealing with the windhold issue that has been exacerbated the past two winter seasons is a top priority. The team is implementing procedure changes that will reduce this issue for this upcoming year. Additionally, they are reviewing several more significant modification options to improve the reliability (for wind holds) that we hope to do in the next few years that are relatively cost effective.

From what we have observed Sugarloaf has a very good maintenance program that keeps their lifts in excellent overall shape mechanically, that said some adjustments have been made that should improve their mechanical reliability going forward. For those Sugarloafers with Sunday River lift envy I am told that overall, Sugarloaf’s lifts are newer on average, than Sunday Rivers’. (I am checking on this factoid with the team

@ WJenness: I have heard that rumor as well which is interesting, but I can assure you that there have been no discussions that I have been involved in internally or with CNL to support this rumor. In the 60 plus years we have been in business we have not left a resort operation. In any event, Sugarloaf is not our asset to sell and the lease to manage runs for 40 years. We intend to be at Sugarloaf for the long run and are making the adjustments necessary for long term sustainability.

bobbutts:  Any chance to see the terrain under the South Peak Chair at Loon and Upper Gondola designated as trails? They seem to be poached frequently and although ocky, are certainly less so than some other designated runs in the region like Tramline at Cannon.

Stephen Kircher: It is my understanding that, those trails were not designated in the original EIS done by Booth and as you can imagine it is not an simple process to reopen that process. That is why they have not been open as “official” trails. We have other submittles pending in the coming year or so and we will attempt to add these trails to these submittles.

Bob R:  Will Boyne make a run at being the first open in the North East again and the last to close? I hope so.

(Riverskier) Bob R beat me to it, but to emphasize the importance to many of your loyal skiers and riders I will mention it again. Season length! Should we expect to be skiing again on Halloween at Sunday River and into May at Sugarloaf (weather permitting of course)?

Stephen Kircher: Having two great resorts in Maine and a transferable pass allows us to focus resources on opening Sunday River early and then keeping Sugarloaf open late. Weather always plays a role in both of these programs. Our goal will be to continue to lead the East with early skiing at Sunday River and retaining the King of Spring crown at Sugarloaf. Will we be first for a third straight year? The team is ready to make it happen again if all goes as planned.

Skimaine:  Early in you ownership of Sunday River, your team developed a long-term vision for the resort. I thought the plan was well conceived and played to the property’s and the community’s strengths. After two years with Sugarloaf in the family, I wonder if you could articulate a long-term vision for this resort property and specially what you perceive as the property’s strengths and how you can make best us of them?

(poe) Do you have any timeline for further implementation of the “vision” for Sunday River? When will more more details be made available? Where are you in the planning stages?

(MonkeyBrook) When driving around the SR area, you cannot help but notice the many new housing developments in the area….it seems as though the supply of lots / homes, etc far outweighs the demand. We love that Boyne wants to become a true “4 season resort”. Do you have any thoughts on what might drive folks to buy up these properties?

(MonkeyBrook) Are there any plans underway to further develop the relationship between the resort and the town of Bethel?

(Razor) As an owner at Sunday River, I echo many of Monkey Brook’s concerns. I’d be interested to know how much of the “Vision” is in the works and how much the current economic conditions have impacted your plans. As for skiing, I’d like to see more natural areas and glades developed, both within the current footprint and perhaps out past Jordan.

Stephen Kircher: The long term vision for Sugarloaf we feel should continue to build off its unique strengths. We feel that a continued emphasis on the winter operations and reducing the focus on making it a year round destination is appropriate. Sugarloaf is the real deal in the winter, probably the best mountain in the east and we want to enhance and build upon that reputation over time. It is a perfect 80/20 rule situation. Focus on the strengths so that there are no wasted resources chasing the offseason that could inhibit the ability to invest in the winter. To make Sugarloaf prosper we believe we need to continue to show that we can decrease the cost structure of the snowmaking system and that we can reduce the cost of non essential summer operations. By doing this we feel we can justify additional investments by CNL into the mountain. These investments could come in the form of lifts and terrain expansion (see above in question 2 for more comments on this). We think that this winter focused vision can still support real estate development and helps to push along several key mountain expansion efforts such as West Mountain and to Burnt. We are not suggesting dismantling or abandoning all summer initiatives but certainly not burning up precious resources in chasing these activities.

@ poe and MonkeyBrook: Clearly the maco economic conditions are affecting the amount of resort real estate on the market but we expect that to begin to turn around in the coming year. This will reduce the inventory of available product over time. We also believe that with as the vision continues to unfold and specific tactical steps like the merger of the real estate teams of Sunday River Real Estate and REMAX, Sunday River and Bethel will likely out perform the region in terms of garning new owners to the community. The stage will then be set in the near future to drive more elements of the vision and masterplan.

@ Razor: The team at Sunday River uses the envisioning work on a daily basis to shape their direction. The outcome of the envisioning process was not intended to be a map of development or a timeline but to direct our steps toward the various goals. The process provided us with a set of Guiding Principles to help shape any future development, guest experiences and to maintain a close a working relationship with Bethel and Newry. It did help us understand our 11,000 acres and where future development within the newly defined experiential zones may be appropriate. Many small and large adjustments to our operations are underway in alignment with this.

Some examples of how the resort uses the “visioning process daily: 1. Moving fireworks to the vibrancy zone 2. Placement of the Chondola and night skiing 3. Guidance for where future amenities may exist like another golf course, water park or spa. 4. Creation of hiking trails and participation in the Bethel Trails committee 5. Partnering with local businesses like Sun Valley Sports and The Bethel Outdoor Adventure Center 6. Expanding our relationship with the Gould Academy.

Regarding glades, we too wish to focus on developing terrain within the current ski area footprint much of which will likely come in this form. I would suspect over the coming few years that will be an increased priority.

Skimaine:  Skiing has become increasing expensive. Skiing enthusiasts can manage this cost by purchasing season passes. Because we are skiing 20+ days a year and we are skiing junkies, the value proposition is met. It seems to me the entry cost for beginners is very steep and presents a barrier to reaching the level of enthusiasm that turns beginners into season pass holders. Is Boyne considering any programs to make the learning process more affordable to those new to the sport?

Stephen Kircher: We are very cognicient of the need to grow the sport and keep it affordable to a larger audience. Both our Maine resorts currently have several programs that are helping to drive value and expanding the base of skiers. The “Bring a Friend ” program in place which encourages current skier to bring newcomers into the resorts, the Maine Winter Kids program as well as a variety of local programs offer children in Maine a way to get introduced to our sport either free or at a very low cost. As well, we have other successful programs we plan to bring to Maine over the coming few years that are in conjunction with some new initiatives being developed with NSAA. These new initiatives have the sole focused goal of increasing the trial and retention of skiers and snowboards. More on this in the coming months.

SLyardsale:  Your labor pool, especially at Sugarloaf, is essentially local. I like that and it is one of the many reasons I enjoy Sugarloaf. Since Boyne has taken the reigns, it seems local employees (with the exception of your management team) have turned over at an ever increasing rate. Any explanation for that?

A bit related but an entirely different question. As a flat lander from MA’s South Shore, I invest in a 4+ hr drive every weekend to Sugarloaf (family of 5, all with passes) and the local vibe that the mountain once had is fading. Do you believe that a local vibe actually hurts skier visits and/or the bottom line at a remote area such as SL i.e. “cheap” labor is needed to make the mountain viable?

Saddleback has gotten nice reviews and has been noticed since the Berry family launched their upgrades. As your nearest geographic competitor what notes have you taken on their activity?

Stephen Kircher: The DNA of Sugarloaf was one key element of the resort that we feel is one of its important competitive advantages and an aspect to protect. Our team is working hard to maintain this local vibe and are focused on creating even more “vibe” energy at the resort. Examples would be the increase in entertainment at the “beach” and the improvements in the on mountain dining facilities. We obviously, do not control the vast majority of the restaurant and bar establishments so how that evolves is somewhat out of our control. However, our guest survey’s are not showing that we are loosing the reasons why folks have fallen in love with Sugarloaf as the Guest Satisfaction Scores remain some of the highest in the country. In any event, I will discuss this further with the local team and others to make sure we are getting a better understanding of this perception. Regarding turnover, I am not aware of a net increase in involuntary turnover, certainly there has been some adjustments to staffing levels in general which could be misconstrued by some to be an increase. But this is primarily due to economic conditions in general and business levels that support the staffing levels.

Additionally, to support the past and future CNL investments we have had to take a hard look at the year round cost structure of the resort as compared to other resorts we operate and make adjustments at Sugarloaf. Some of these changes have come in the form of less year round positions and a more seasonally focused employment structure.

As a point of fact, the retention of our employees at Sugarloaf remains way above the national average. As an example, our lift department retention level is close to 70%.

Razor:  Being year round visitors, we’d like to see the mountain biking increased and improved, although I will say that you’ve done a good job with it thus far. My frame of reference is Kingdom Trails in East Burke, VT. I think that Sunday River has the potential to become a mountain biking Mecca, but you need more trails for people like us who like single track but aren’t ready for full body armor. Cutting new trails for biking is mainly labor-intensive and could be done relatively cheaply, I would think, especially as compared to something like an indoor water park. Also has anything been done with the proposed bike/recreation trail from the mountain into Bethel?

Stephen Kircher: We continue to work with the Bethel trails committee on connecting the resort to town, one of our trails abuts the proposed connection. We agree it is a cost effective new amenity and why Sunday River has cut new hiking and mountain bike trails this summer and will continue to work to increase offerings. The resort team is aware of the need for more gentle mountain bike terrain and has started on easier trails to widen the trail systems appeal and improve its profitability.

ga2ski:  Steve – thanks for participating and communicating with the folks that enjoy your resorts. I would like start by saying thanks for all the improvements that been implemented at Sunday River since you took ownership. Now for some constructive criticism.

You may have heard the grave disappointment from Perfect Turn, beginners, and parents of children who have out grown the magic carpet, when it was learned that Lift 5 was removed last season. Many of the beginners and younger children are not ready to ski the full length of South Ridge. What is Boyne’s plan to satisfy its loyal customers who have progressed beyond Lower Sundance and are not ready for the “Broadway Headwall”? Will an additional magic carpet be installed above the existing one on Sundance? Will regrading actually occur this off season to Upper Broadway and the top of Mixing Bowl to minimize the intimidation factor that steep slopes present?

What is the plan to reconfigure the unloading stations of the Little White Cap and Tempest chairs? The current configuration of each chair is too close to the bottom of the chairs resulting in eating your knees or your boot getting jammed by the chair?

Stephen Kircher: One of the objectives in moving the Chondola to South Ridge was to modernize, simplify the flow and clean up the look of the area with replacing two older lifts with a new Chondola and a new magic carpet. As well it was our intention to separate out the beginner traffic from the transient and more advanced traffic at lift 2. We are not aware of any other complaints about this change but will review what can be done to temper any specific hill gradients that could be causing beginners an issue. We met the overall goal of vastly improving the flow and distribution of skiers in that core base area.

We are in a multi year process of reworking all the ramps to meet both Boyne and industry standards. It is my understanding that these two lifts specifically are being modified this summer, hopefully meeting your and other customers comfort parameters.

ga2ski: Valet parking (aka premium parking at a price) seems to be underutilized at Sunday River. Has Boyne done a cost benefit analysis to see if it is worth paying 1 or more employees to watch a whole empty row for 8 hours or more in front of its main lodge?

Bus traffic serves an important niche to transporting groups to the resorts. Instead parking the buses in multiple rows in front the main lodge where more than 48 other cars could be parked, has Boyne considered creating a bus unloading station near the Mountain Grocer and parking the buses in the back lots near the Snow Cap Inn or near the Summit? This would minimize the number of disgruntled people who had to walk up the hill to see empty rows reserved for the possibility of the buses?

(AndyEich) What role, if any, does Boyne play in advocating for transportation improvements to improve the accessibility of its Maine resorts?

Stephen Kircher: Parking at ski resorts is always a topic of discussions and potential improvements are reviewed yearly. An example of this is moving staff parking out of the South Ridge area this past season to free up over 160 spaces on the weekends. Rest assured that that our local team continually evaluates the transportation and parking process from a guest perspective and is working to make appropriate and cost effect adjustments as they see fit.

The valet was an experiment and an effort to improve the user friendliness to those who appreciate that level of service and convenience. It is being evaluated for the very aspect highlighted.

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