Oct. 26 (Bloomberg) — Vail Resorts Inc.’s season pass sales rose 13 percent in September as skiers eager for powder prepared to make tracks a year after the financial crisis.

“This year the economy is still struggling but there is more confidence that it’s not getting dramatically worse,” Robert Katz, chief executive officer of Vail Resorts, said in an interview. “The economic issues that we faced last year started right at the beginning of ski season and got worse until the end of the season.” The company operates five U.S. ski properties.

Resort operators are forecasting increases in bookings this season after the recession kept some snow lovers home last year. Lodging and slopes close to metropolitan areas such as New York, Denver and Los Angeles stand to benefit the most as residents stay closer to home, said Ralf Garrison, an analyst with the Denver-based Mountain Travel Research Program.

Bookings at ski resorts made in August for all future arrivals were up 2 percent year over year, Garrison said.

Starwood Hotels & Resorts Worldwide Inc., the third- largest U.S. lodging company, is also reporting an improvement at its ski resorts from last year, said K.C. Kavanagh, a company spokeswoman.

“We are seeing that travelers who did not ski last year are not willing to forego their trips again this year,” she said. “People are anxious to get back on the slopes.”

Rooms Filled

The company’s St. Regis Aspen Resort in Colorado, “is pacing better” than last year and rooms for the winter holidays are “close to being filled” at the soon-to-open St. Regis Deer Crest Resort in Utah, Kavanagh said.

Demand at the Dakota Mountain Lodge in Park City, Utah, part of Hilton Worldwide’s Waldorf Astoria collection, is “strong,” said Steve Lindburg, the general manager. Nightly rates for Christmas week range from about $800 for a one bedroom to about $6,000 for a four-bedroom suite.

Rick Saidenberg, a 46-year-old trader and money manager in Westchester, New York, said he would rather forgo a vacation in the Caribbean than skip skiing.

“I feel like skiing is my last chance to experience this whole-body, animal-aggressive feeling I don’t want to miss out on,” Saidenberg said. “I want to spend less money right now, just like everybody else, but I am still going to go skiing.”

Vail

Skier visits at Vail, which owns its namesake resort as well as Keystone, Breckenridge and Beaver Creek in Colorado and Heavenly in California, are likely to rise at least 2.4 percent this season from 5.86 million last year, according to Hayley Wolff, an analyst at Rochdale Research.

Deer Valley Resort near Park City, Utah, a ski-only mountain with signature runs like Stein’s Way overlooking Jordanelle Reservoir, also expects visitor numbers to top last year’s.

Vail forecast in September that earnings before interest, taxes, depreciation and amortization from its mountain operations and its lodging component would climb as much as 9.9 percent to $188 million for fiscal year 2010, ending July 31, from the prior year. Wolff rates Broomfield, Colorado-based Vail Resorts, which has climbed 38 percent this year, “buy.”

Ski resorts appear to be bucking the trend in the travel industry. Hotel occupancy across the U.S. January through August dropped to 57 percent, the lowest since at least 1987, according to Smith Travel Research.

Ski Visits Fall

During the last ski season, which generally runs from November through mid-April, total skier visits fell to 57.4 million from a record 60.5 million the prior year, hurt by the start of the financial market collapse in September 2008, according to the National Ski Areas Association.

“Over the next 90 days, the 2009-2010 season will begin to outperform last year’s,” said Garrison. “Ski area lift ticket sales will continue to outperform resort lodging due to an ongoing shift toward more local/regional skiers.”

Scott Webster, a 37 year-old Spanish teacher at Wilton High School in Connecticut, would rather cut back elsewhere than skip skiing.

“Unfortunately my family got me hooked on this expensive habit early on,” said Webster, who has also modeled on the side for Coca-Cola Co. and L.L. Bean Inc. advertisements. “I will go out of my way to make time and to put money toward it.”

Spending Less

Webster, who usually flies twice during the season to Colorado to ski, has already booked a four-day family trip to Vail for February. Webster expects total costs, including meals and lift tickets, to be around $1,200.

While many skiers and snow boarders try to avoid cutting down on their time on the slopes, they may curb their spending while on the mountain or when shopping for hotel rooms.

Revenue from food on Vail’s mountains dropped 16 percent to $52.3 million for the fiscal year through July 31, 2009, and revenue from ski schools declined 20 percent to $65.3 million, according to company filings.

Vail, like most other resorts, is trying to avoid lowering lift ticket prices this season. The company sold its Epic season pass for $579, the same price as last year, if purchased by May. It cost $599 thereafter. The company will also offer special values on the mountains such as the “Lunch for Less” value meal for $9.95, which includes an entree, side dish and a beverage. At its Keystone Resort, couples who marry at the property ski for free for the entire season. In Aspen, kids stay and ski free in March with a five-night package bought by Jan. 15.

“I have always gone skiing, even during difficult times,” said Mark Kelley, 59, a Denver-based commercial and residential real estate broker at Re-Max, who has skied since he was 4 years old. “I am more inclined to cut down on my spending on the mountain than to not go skiing at all.”

To contact the reporter on this story: Nadja Brandt in Los Angeles at [email protected]

Last Updated: October 26, 2009 00:01 EDT

The nation’s gross domestic product expanded at an annual rate of 3.5 percent in the quarter that ended in September, matching its average growth rate of the last 80 years, according to the Commerce Department. But government programs to encourage consumer spending on things like cars and houses are expiring, and employers remain reluctant to hire more workers, suggesting the recovery may not last, economists say.

“The big-picture perspective is that things have improved,” said Jan Hatzius, chief United States economist at Goldman Sachs. “The question is, how sustainable is this growth going forward?”

For most people, the recovery will not feel real until jobs are more plentiful and the housing market improves. Jobs may still be hard to find well into 2010, economists say. A government report to be released next week is expected to show that unemployment rose again this month.

Still, Wall Street welcomed the news of renewed economic growth, with major stock indexes ending the day about 2 percent higher. The Dow Jones industrial average soared 200 points, to close at 9,962.58.

Before the third quarter, the gross domestic product — the government’s broadest measure of total goods and services produced — had been shrinking for a year. It bottomed out with a 6.4 percent rate of decline in the first three months of this year, the steepest fall since 1982.

The trend was halted last quarter primarily because of consumers, who drove most of the economic gains.

The government’s cash-for-clunkers program spurred consumers to spend more on durable goods, orders of which grew at an annual rate of 22.3 percent in the third quarter after a decline in the previous quarter. Similarly, the $8,000 federal tax credit for first-time home buyers helped revive housing sales, which rose at an annual rate of 23.4 percent in the third quarter. Housing sales had actually fallen by a comparable amount in the previous three months.

The $787 billion stimulus package, which was passed last winter and is still being distributed, is also credited with strengthening economic activity, although the precise contribution is contested.

Many economists worry that the effects of these government initiatives will be short-lived and that the next few quarters may show sluggish growth or even a second dip.

The Obama administration has argued that even temporary government programs may make families feel more comfortable with spending and business more comfortable with making bigger investments for the longer term.

Still, withering consumer confidence and concerns about a weak recovery have left companies wary of hiring more employees. The jobless rate reached 9.8 percent in September, its highest in 26 years.

Initial jobless claims fell by 1,000 in the latest week, to 530,000, according to a Labor Department report also released on Thursday. The number has been heading down but is still well above the levels historically associated with job creation, according to John Ryding, chief economist at RDQ Economics.

Concerns about rising unemployment may pressure the administration to look for additional ways to stimulate the economy. Proposals include another extension in unemployment benefits and various job creation programs.

“It’s all in the hopper,” said Christina D. Romer, chairwoman of the president’s Council of Economic Advisers. “It would be irresponsible if we weren’t thinking about these kinds of programs.”

Businesses are drawing down their inventories more slowly, possibly because they anticipate more demand in the future, economists said. The businesses have largely sold out their current stock, Thursday’s report showed. This means they will increase orders in the coming months to replenish supplies.

“Everybody had been dealing with a just-in-time status quo,” said Sandra Westlund-Deenihan, president and design engineer for Quality Float Works, a company in Schaumburg, Ill., that makes valve assemblies. She said companies might be growing tired of building new products as orders rolled in one by one, and are now ready to have stock back on the shelves again.

Like many American manufacturers, Ms. Westlund-Deenihan says that international business has helped keep her company afloat. The country’s overall exports grew at an annual rate of 14.7 percent, and imports at 16.4 percent, in the latest quarter.

While these numbers mean the United States’ trade gap has widened, they also provide hope that the global economy may finally be recovering from a collapse in activity earlier this year.

“When the economy gets fully back on track in the latter half of next year, the recovery is likely to be stronger than the recovery following the 2001 recession, when exports were anemic due to an overvalued dollar and weak growth abroad,” said David Huether, chief economist at the National Association of Manufacturers.

The official end of the recession will be determined by the National Bureau of Economic Research. Its business cycle dating committee looks at output as well as other indicators like employment to make that call. The group spent a year examining data before declaring that the recession had begun in December 2007.

Some economists say they expect the panel will eventually decide that the recovery began sometime this summer.

The third-quarter economic growth came without a major surge in inflation.

The price index for gross domestic purchases, a measure of prices that United States residents pay for goods and services, increased at an annual rate of 1.6 percent in the third quarter, compared with a small increase in the second.

Excluding food and energy prices, the inflation index rose 0.5 percent in the third quarter, compared with an increase of 0.8 percent in the second.

Javier C. Hernandez contributed reporting.

LIFT OFF presented by Sprint, Nov. 6-8

Copper kicks off the season right celebrating the return of winter for the 09-10 season November 6 – 8.  Enjoy the latest 2010 ski & snowboard movies, including the Copper premier of TGR’s new film: Re:Session, with net proceeds benefiting Team Summit.  The weekend will also include equipment demos, après specials, a movie at The Woodward at Copper Barn and—new this year—Lift Off Late Night!  Make sure to check out the Lift Off concert on Saturday night with The Heyday, DJ Relm and headliners The Rapture.

New 22 ft Superpipe debuting during the Grand Prix

Copper shows a substantial commitment to the progression of skiing and riding by building the resort’s first ever 22 ft superpipe, and we hope to have the first superpipe open in North America for the 5th consecutive season. The 22 ft superpipe will make its national TV debut during the USSA Grand Prix, Dec. 11-12, when top snowboarders from around the globe will vie for coveted Olympic Halfpipe spots. Enjoy the Paul Mitchell Progression Sessions on Saturday night, under the lights on Lower Bouncer. Watch the first Grand Prix stop at Copper on NBC Sunday, Dec. 13 at 2 p.m. EST.

During any other year, that might signal a business boom. But few things seem normal in a year when the travel industry has been turned upside down by companies severely cutting back.

Bush’s double-digit increase will follow a 50% cut in his original 2009 budget. In 2010, he plans to log about 15 trips, up from nine this year.

“There is a fundamental reset of what ‘normal’ looks like,” Bush says. “And it’s less than what we were used to.”

A similar refrain is echoing throughout the travel industry, which hopes for anything but a repeat of this year. With U.S. unemployment near 10%, the prospect of a sustainable growth level seems far off — perhaps not until late 2010 or 2011, executives and business travelers say.

Even then, “Improvement in business travel is going to be small,” says Hervé Sedky of American Express Business Travel. “There’s a lasting effect of the recession going forward.”

A survey of members by the Association of Corporate Travel Executives underscores the caution prevalent in the industry. Only a quarter of respondents said they will spend more on corporate travel next year, while about half will operate at 2009 levels. The outlook:

Airlines

Airlines, with their ability to quickly add or remove seats, could be on the cusp of a slow recovery. American Express Travel estimates domestic fares in North America will grow 2% to 7% next year. Business-class fares will grow 1% to 6%.

Low-cost carriers already are seeing more travelers. JetBlue’s September traffic was up 10% from a year earlier as it, unlike other airlines, added capacity. Southwest’s traffic rose 9% in September, and the percentage of seats filled reached nearly 75% vs. 63.4% a year ago.

US Airways President Scott Kirby said the company continues to see “positive revenue trends,” though the airline reported a decline in September traffic.

Rising fares and fewer deals also point to demand ticking up, says Tom Parsons of BestFares.com. He alerted his readers recently that Southwest raised the floor on fares for certain routes. Coast-to-coast sale fares that traditionally were $99 one way and $198 round trip are now $149 and $298, respectively.

Frequent business traveler Mohan David of Canyon Country, Calif., plans to travel just as much in 2010 even though his business is down 50%. “There are lots of new customers on the horizon who can more than make up for the losses sustained this year.”

Hotels

It’s been an ugly year for hotels. In the second quarter, revenue per available room, the industry benchmark of measuring performance, fell 19.5% from a year ago, says Smith Travel Research.

The decline will continue for much of 2010, analysts say. Room rates will fall 1% to 6% in North American hotels, and upscale properties will offer deeper price cuts, American Express says.

Mark Woodworth of PKF Consulting expects year-over-year declines to continue until the fourth quarter of 2010. But they will be “much less pronounced” next year, he predicts.

Adding to the problem is a bountiful supply of rooms. The industry is still absorbing rooms that it broke ground on just as signs of a travel downturn started to emerge in early 2008.

Meetings and conventions

Large convention cities can’t wait for the year to end. Convention visitors to Las Vegas fell 26% in the first seven months of this year to 2.93 million. In Orlando, total visits are down about 9%.

Convention executives still aren’t convinced that visits will return to 2008 levels. But calls from customers canceling large meetings and conventions “pretty much subsided starting in late March and April,” says Chris Meyer, vice president of sales for Las Vegas Convention and Visitors Authority.

Mark Liberman, CEO of LA Inc., the Los Angeles Convention and Visitors Bureau, is similarly optimistic that “the worst is behind us.”

But Joan Eisenstodt, a meetings industry consultant, says, “As long as unemployment remains high and companies cut their internal training budgets, we’re not going to see a pickup.”

Many studies conducted at different times have shown the tourist’s profile doesn’t remain stable. On the contrary, it’s characterized by very dynamic features. Several studies also have concluded these features are created and shaped by the socioeconomic conditions individuals experience.

Perhaps the most significant impact the financial crisis has on the way tourists purchase their holiday is they now attach even more importance to the concept of value for money, something that will be a competitive advantage for those destinations able to offer it.

For large groups of people (e.g. tourists from Central European countries), taking an annual vacation abroad is part of their lifestyle and culture. In periods of economic difficulties, they’ll take advantage of the diversity of available tourist products and will prefer to consider alternative destinations (or leisure activities) rather than cancel their holiday altogether.

Furthermore, a recent PricewaterhouseCoopers survey revealed holidays remain sacred to the U.K. consumer as those chasing the sun refuse to forgo their annual trip. More than two-thirds of those polled will trade down from their usual level of vacation, while only 16 percent will stop going on holiday altogether.

The medium-term consequences of financial instability on tourists can be summarized by the following:

* • Tourists prefer to plan shorter and probably more holidays.

• Medium- to short-haul destinations are becoming more popular.

• Saving on the cost of traveling to and from a tourist destination will be as important as the cost of accommodations and entertainment, with a special preference for low-cost airline companies.

• The all-inclusive concept will revive as tourists seek holiday packages with a broader range of activities at the best available prices.

• Tourists are becoming more sensitive to issues related to ecology and the protection of the environment.

• Vacation expenses will continue to be a priority in the family budget. They’ll remain at the top of the discretionary spending list.

When the economy recovers, it’s worth considering whether things could be different. Consumer behavior might well be moulded differently. Travelers might travel shorter distances. Their holiday and short-break behavior could change significantly as well. If consumers and businesses find attractive value for money propositions adopted during the recession acceptable, they might well stick with them.

Consumers also won’t be in a position for some time to derive wealth by taking equity out of their homes. History tells us the housing market will probably take far longer to recover than the overall economy. Additionally, credit conditions may remain weak for some time, and consumer spending will be constrained as a result. This means hotel companies and the tourism industry in general might want to plan for a slower and more modest recovery rather than a strong consumer rebound.