February 10, 2011

Experts: Sugarloaf's business likely will not suffer

By John Richardson jrichardson@pressherald.com
Staff Writer

The derailment of a chairlift at the Sugarloaf ski resort Tuesday probably won't scare off a significant number of customers, industry experts said Wednesday.

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Location: Carrabassett Valley
Height: At 4,237 feet, Maine’s second highest mountain
Base elevation: 1,400 feet
Total resort area: 7,000 acres
Trail network: 54 miles, including 133 trails
Trail classification: 26 percent beginner, 31 percent intermediate, 27 percent advanced, 16 percent expert. Offers only lift-serviced, above-treeline skiing in the East
Total number of lifts: 15


1951: Amos Winter, a Kingfield general store manager, and other ski enthusiasts hire a trail designer and form the Sugarloaf Ski Club. That winter, the mountain hosts its first skiers.
1953: The first mechanical means of getting skiers up the mountain, a rope tow, is installed.
1955: The for-profit Sugarloaf Mountain Corp. is formed. It expands ski lift capacity and cuts additional trails.
1964: Sugarloaf starts to draw skiers from throughout New England with a 9,000-foot-long gondola to the summit.
1972: The Village Center, a complex of shops and restaurants, is built. Sugarloaf also branches into real estate, building some of the first condominiums in Maine.
1974: After a winter with little snow, Sugarloaf installs the world’s highest snowmaking system.
1986: After a second year of poor winter business, Sugarloaf Mountain Corp. files for Chapter 11 bankruptcy.
1987: By April, the company’s reorganization plan is approved and by June the company emerges from bankruptcy. The plan involves $8 million in investment from its new board of directors, new financing arrangements and the sale of several real estate projects.
1994: SKI Ltd., the publicly held company that owns Killington and other New England resorts, purchases a 51 percent interest in Sugarloaf. It immediately announces a $4.5 million expansion, including a 7,000-foot high-speed detachable quad chairlift.
1996: Les Otten, owner of the Sunday River Ski Resort in Newry, announces that his LBO Enterprises will merge with SKI in a $107 million deal. The new American Skiing Co. becomes the largest ski resort operator in North America and gives Otten a controlling interest in Sugarloaf.
2007: American Skiing sells Sugarloaf and Sunday River to Boyne USA for $77 million. Boyne, a Michigan-based owner and operator of U.S. ski resorts, in turn sells the assets to Florida-based CNL Income Properties, another large resort owner, but continues to operate Sugarloaf and Sunday River.

But the high-profile accident's ultimate impact on the business is hard to predict. While Sugarloaf, like other large ski resorts, has plenty of experience dealing with accidents and injuries on the trails, lift derailments that make national news are almost unheard of in the industry.

"The lift accidents are very rare," said David Belin, a national ski industry analyst with Denver-based RRC Associates. "So it's hard to look back and pinpoint" business impacts.

Much could still depend on what caused the accident, and what precautions the resort did or didn't take beforehand. But the simple fact that it was such a rare accident -- together with the resort's emergency response and crisis communication -- means skiers and snowboarders will probably keep the resort busy this winter, said Belin and others.

"There were some injuries, but it sounds like it could have been worse. I think the sensational aspect of it could have been more severe," Belin said. "In Sugarloaf's case, they have a lot of people who come and spend the night. ... I would think most people would probably keep those plans. There are lots of other lifts on the hill that are open."

Sugarloaf, one of Maine's two largest ski areas, is operated by Boyne Resorts, a Michigan-based resort owner and operator that also runs the Sunday River resort in Maine and the Big Sky Resort in Montana. It is owned by Florida-based CNL Income Properties, a national ski resort company.

Boyne, coincidentally, was founded by one of the inventors of modern chairlifts, and both companies have good reputations in the industry, Belin said.

Like other big resort operators, they are used to handling accidents and injuries, and sometimes deaths, when skiers and snowboarders fall, collide or go off trails. Those well-practiced emergency response and communication plans appeared to help minimize the damage Tuesday, to the injured skiers and the company's reputation, observers said.

Tami Kennedy, president of the Maine Public Relations Council, said the resort posted updates using Facebook and Twitter through Tuesday, giving basic facts to concerned skiers and parents, as well as the media.

"They were sharing the information they had. They didn't wait for the press conference," she said. "From a brand perspective, Sugarloaf is a brand, and if, for example, people feel like they are not given answers to questions, or that they are shirking the media or phone calls from parents, that's a reflection of their brand."

The fact that the accident happened during a prime school vacation week, and that a CNN employee was among those stuck on the lift, clearly focused more attention on the derailment and the company's response.

"They got out in the national spotlight really quickly, and I think they handled that really well," Kennedy said.

Sugarloaf provided the first details of the derailment -- including failed efforts to fix the chair -- in a news release late Wednesday afternoon. State investigators have not issued any official findings.

Asked about the resort's crisis communication strategy earlier on Wednesday, Sugarloaf spokesman Ethan Austin said the focus was still on the safety of skiers and snowboarders. Austin said he could not predict how the accident would affect business.

"It's still, obviously very early," he said. "I can tell you from walking around, it is a busy day at the resort. ... We really don't know (what to expect). This is really such an unusual event, we have never experienced it before."

Greg Sweetser, executive director of the Ski Maine Association, said he doesn't expect any long-term business impact.

"I've been in the Maine ski business since 1978," Sweetser said. "An incident like this hasn't occurred during my career, which just points to the fact that it is extremely unusual."

Sweetser said he doesn't expect the accident to keep skiers away during the school vacation this week, or during the College Snowfest next week.

"My son is skiing at Sugarloaf today," he said. "If I had even a hint of concern, his mother and I wouldn't have him go there. I've been in the business a long time and I know the care that goes into it."

Sweetser said resorts inspect lifts daily. State inspectors check them at the start of each season, and the resorts' insurance companies typically do safety inspections during the season, he said. "For the ski operations, lifts are the number one priority."

It's unclear whether the accident will lead to any lawsuits.

Maine law says skiers cannot sue for damage related to "the inherent dangers and risks" of skiing. However, the law specifically allows lawsuits related to negligence, including "the negligent design, construction, operation or maintenance of a passenger tramway."

Claims are not uncommon when resorts don't adequately mark trails or hazards where someone is injured, said Peter Thompson, a Portland-based personal injury attorney. The lift derailment might lead to one or more lawsuits, he said, but they would be much more complicated and expensive cases and so might not be attempted unless injuries are severe.

If Tuesday's strong winds are found to be an important factor in the accident, for example, liability could depend on how much wind the lift was built to withstand and what the industry standards are for operating in windy conditions, he said.

"There's going to be an examination of why it happened," Thompson said. "The ski resort was very quick to say the proper inspections were done, but there could have been something ... that should have been dealt with and wasn't."

Sugarloaf would be insured for any liability, he said. "They have claims brought against them every year dealing with very serious injuries, and obviously they are still business."

The bigger issue, according to Thompson, is the public perception of safety at the resort.

"A lot of people just have general fears about getting on chairlifts, and I can certainly see (they) would be somewhat reluctant," he said. "At the same time, this is such an aberration that those people who are die-hard skiers, I don't think it would change their plans to go up there."


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