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Historic California Drought Forces Ski Resorts to Close Early

With 30 plus years of experience managing ski resorts in the California, Tim Cohee has seen his share of challenging winters, but this winter has been the worst.

Cohee, owner, CEO and general manager of China Peak Mountain Resort in Lakeshore, California, was forced to shut down operations back in February, as California's historic drought shows no signs of stopping. There is a possibility they could reopen, but the chances of that happening are low, Cohee said.

"We all thought last year was the worst thing we could possibly see and then this year is substantially worse than last year," he said.

A dearth of snow, unfavorable snow-making temperatures and large storms that delivered rain rather than snow were three factors that conspired to exacerbate the season, according to Cohee. In other years, Cohee said the lack of snow could be counterbalanced with good snow-making weather.

March has been a record-warm month statewide and this is likely going to be a record-low snowpack year, according to Western Weather Expert Ken Clark.

The current statewide snowpack levels are 6 percent of normal as of March 30 and last year was 30 percent on that date, according to the California Department of Water Resources. Last week, California Gov. Jerry Brown announced $1 billion in funding for drought relief and critical water infrastructure projects.

Farther north, at least seven ski resorts in the Lake Tahoe area closed earlier than normal or suspended operations due to the deteriorating conditions, according to the Sacramento Bee. Sierra-at-Tahoe Resort closed on Monday, March 16, but didn't rule out reopening if conditions improved.

"Conditions around the mountain have deteriorated to the point where we can no longer deliver a product that meets our standards," General Manager John Rice said in a statement on Sierra-at-Tahoe's website. "Although temperatures remain high and the forecast lacks precipitation, we are fully committed to resuming operations if we receive an adequate amount of snow."

Typically, most ski areas in California look to stay open until late April or early May, Cohee said.

With four straight below-par seasons, some ski areas are battling issues on how to move forward. One such issue is season pass sales, and the spring is typically when season pass renewals and sales for the next winter will take place. For many resorts, the spring sales are important because it helps generate summer cash flows and will keep resorts from borrowing too much money in the summer, according to Cohee.

Cohee stressed the need to be transparent with his customers, and in Facebook posts, he has explained why purchasing passes this time of year is important to the resort. He also emphasized the need to be sensitive to the fact that season pass holders paid lots of money for below-average conditions this year.

China Peak is offering a variety of incentives and benefits to add value for customers who purchase 2015-16 season passes this spring. One such offer is what Cohee calls a "multimillion dollar risk," on the company's end, where if they do not receive a minimum of 100 days of upper mountain or mid-mountain skiing next year, purchasers will receive a 2016-17 season pass at no cost.

Squaw Valley Alpine Meadows Resort in Olympic Valley, California, will see its season conclude in the next two weeks, unless Mother Nature can deliver late-season snow, according to Michael Radlick, a spokesperson for Squaw Valley Alpine Meadows.

Like China Peak, the resort operators are looking to add value for skiers or riders who might be hesitant to buy season passes this spring. The resort's new Tahoe Super Pass comes with a 'worry-free guarantee' Radlick said. Those who purchase 2015-16 Gold or Silver Tahoe Super passes will be able to roll over up to four unused days next winter for credit towards the purchase of a 2016-17 pass.

"We recognize it can be challenging for skiers and riders to commit to a season pass purchase when they don't know how often they'll actually be able to ski the following winter season due to reasons that may be out of their control," said CEO Andy Wirth in a news release. "By introducing the ‘worry-free guarantee,' the intention is to provide our passholders with reassurance that they will realize the full value of their season pass purchase."

Bob Roberts, president and CEO of the California Ski Industry Association, said only eight out of 27 California resorts are still open, with resorts in Oregon and Washington also ceasing operations.

Despite the many closures, Roberts said the 2013-14 season was still worse in terms of timing as they had very poor snow conditions during the crucial holiday periods. This year, Roberts said they were fortunate to at least get good snow around the holidays, a point Cohee echoed.

"A lot of people got lucky at Christmas and got some good Christmas business, [but] then things had pretty much fallen apart from that point on," Cohee said, adding that China Peak opened Dec. 20, several weeks after its targeted Thanksgiving opening.

Last year brought 5.2 million visitors to the slopes in California, and although this year's final visitation numbers won't be available for another month or two, Roberts suspects it will be around 5.2 to 5.3 million.

"For us it's about when [the snow] falls," Roberts said.

With more than 40 years of experience, Roberts has seen the ski industry reinvent itself several times. Declining snowpack and shorter ski seasons, especially for areas in lower elevations, have been a challenge for more than a decade. Within the last five years, resort operators are moving beyond winter and into the mountain recreation business to find ways to stay relevant and profitable through the spring, summer and fall.

Over the last four to five years, Roberts said roughly $300 million has been invested in infrastructure and attractions in the Lake Tahoe area alone.

"That has not abated. That is something that has worked," he said.

Roberts cited a 32,000-square-foot indoor training facility for extreme sports at Boreal Mountain Resort in Truckee, California, which is open 11 months out of the year and provides a stable income.

Going forward, Roberts said they're hopeful for greater snowfall next winter and he expects snow-making budgets at larger resorts to increase.

"Hope springs eternal; you can't be in this business if you don't think the glass is half full," Roberts said.