The numbers don’t lie… Mammoth skier/boarder visits are down 36% from last year, forcing upper management to take strong measures. CEO Rusty Gregory has announced that Mammoth will be cutting expenses, employee hours and salaries.
For weeks now chatter has circulated the Mammoth Lakes region, speculating on when, not if, severe cuts to HR would be dealt. Clearly Mammoth administration held-off as long as it could, refraining from taking action until the passing of the always busy President’s Day Week-end, perhaps maintaining hope that the season would make a turn for the better.
The President’s Holiday came and past, delivering a healthy surge in business for the mountain and the town, yet the bump in activity was not enough to avert cuts to HR and all-around mountain operations.
“Like all business owners in a low snow year when revenues have dropped 30%, Mammoth Mountain CEO Rusty Gregory has made tough decisions – cuts in expenses and employee hours, salary cuts and a cut in his own pay. Skier visits are down 36% for this time of year, according to the CEO.
Gregory, just back from a meeting of the California Travel and Tourism Commission in Sacramento, said, “We’re making some of the difficult decisions. Since the beginning of January, we’ve had to deal with this drought we’re facing,” he said. Gregory has seen droughts in his 34 years at the Mountain, but he said this one is different. It’s across the country, and he said the public perceives there is no snow recreation. Gregory said the news frequently reports how mild the winter is and how the snow looms low. It’s a perception, he said, that turns people away from snow recreation that they think is either not good or not there at all. “Seeing people in bikinis in Central Park – this message has taken demand and suppressed it further,” said the CEO.
Gregory said he talks to other resorts in the West. They have the same problem. “Other resorts,” he said, ” have dealt with very little snow from the beginning of the season, none in January and some in February. All are operating with significantly less snow pack and are suffering from demand suppression.”
Gregory said skier visits to Mammoth Mountain are down 36% from last year and revenue has dropped 30%. Gregory said these numbers mean 240,000 fewer visits to date. In dollars, that means a $22 million revenue drop from this year’s budgeted plan which was based on last year – a good but not perfect year. Gregory said the company revenue from the entire year is generally $140 million, so the $22 million drop is a big part of that.
Here’s what Gregory decided: A significant reduction of hours for seasonal staff, a considerable reduction of hours for year-round hourly employees, and a 10% salary reduction for all salaried employees. Finally, Gregory cut his own pay by 15%. The CEO said, “To do nothing would put many more jobs at risk in the long run.”
At this point, Gregory has made no lay-offs. He and other department heads are literally managing things day by day, watching visitor trends. The President’s Holiday brought a big rally to visitor numbers with more than 17,000 skiers on Sunday and more than 16,000 on Saturday. Although, those numbers typically would reach 20,000. “That’s a major recovery,” said Gregory, “and we’re having a better week.”
Good news to some year-round hourly employees whose hours have been temporarily cut 50%. Seasonal employees with fewer hours may not be able to afford to stay. They can apply for unemployment and make, at some point, face lay-off. It’s a daily, right now thing.
For those who have wondered out loud about who is making the decisions, Gregory said he is. Gregory, who handles operations, owns 15% of the company. Others, like Barry Sternlicht, are investors and partners, he said, who do not get involved with daily decisions.
The CEO added that he had already cut other expenses – supplies and materials – but not at the expense of the visitor experience, he said. On a much larger scale, Rusty Gregory is doing what a lot of business owners are doing right now – scaling back in a low-snow year to make ends meet.”
Reaction to the cuts has been mixed to say the least. Many have even begun to wag fingers, playing the blame-game in an attempt to peg a culprit for poor numbers. Mother nature, poor marketing, mismanagement, recession… Where did all the snow-sliders go? The blame does not lie with any of these. The problem is “perception.”
“Perception” is a hard thing to shake. I’ve been South recently; the beach weather right now is better than it is in July on most years. How on earth is anyone living down South to think snow when all he/she sees is summer? What’s a trip though is I’ve constantly heard Mammoth Lakes residents bag on conditions too. What?!!? Have you been to the hill? Do you know what good conditions are, do you truly know what bad conditions are?
Well, good conditions or not, don’t believe me, or the photos or the video… For those of us that believe, we will just have to make due with what we perceive – especially the BIG dumps coming in March! Stoked!