Since a number of ski resorts receive funding through EB-5 visa investments, it should be of great interest to EB-5 stakeholders whenever unforeseen circumstances threaten job growth at these operations.
Unfortunately, this winter has not been a good one for the ski resort business. Unseasonably warm weather and a lack of snow across the United States has ski resorts from California to Vermont scrambling to make snow. Nearly all are experiencing a decline in the number of skiers, and many resorts are forecasting a dismal year due to the high cost of making more snow for fewer visitors.
The following headline appeared in the Huffington Post earlier this month:
And then there's this one from the Mother Earth News network:
Another news source explained the issue like this:
Getting some skiing in this season may not be as easy as booking a flight to the slopes. With less than stellar bases, ski resorts all over the country say they are seeing fewer visitors due to a lack of snow. And that deficit is leading them to keep runs closed longer or write off the entire winter as not worth the money to even open.
Today Show viewers heard this report about the unusual dearth of snow in places where skiers usually hit the slopes in droves:
Resort operators' hopes for strong growth in revenue were dashed late last year as many would-be skiers canceled their ski trips over the Christmas and New Years holidays, traditionally one of the most lucrative periods for ski resorts, and opted to stay closer to home, visit the beach, or pursue other warm weather activities. This has threatened many seasonal ski resort employees whose jobs depend on the influx of vacationers.
According to the New York Times, "unusually balmy" weather in New England has "[wrought] havoc on snowmaking" at resorts that usually have no problem making and maintaining plenty of snow for skiers before Christmastime:
Many ski areas opened late this year, and the slow start is threatening the fragile economy of towns that rely heavily on the ski traffic that usually starts in earnest over the holidays. Hundreds of seasonal workers have been unable to start their jobs, while some innkeepers report far more empty rooms than is customary during the holidays.
The warm weather has been a boon for other industries whose revenues are impacted by large amounts of snowfall, in particular intermodal and logistics operations like FedEx and UPS.
There are a few ski resorts that rely on EB-5 visa investors to fund their projects, but none are more well-known to the EB-5 visa stakeholder community than Jay Peak Resort in Jay, Vermont. Bill Stenger, co-owner of Jay Peak, appeared on CNBC on December 30 to describe the problem:
Jay Peak, being much further north than most ski resorts, has a better ability than its southern competitors to produce snow when temperatures drop.
But doing that comes at a cost. At $2 to $5 per cubic meter, snowmaking can become expensive. Covering an entire mountain with manufactured snow can actually be very costly, running into the hundreds of thousands of dollars per year. This is also a very risky operation as the snow can melt when temperatures rise above 32 degrees, forcing the resort to re-manufacture its base and trails.
And let's not forget that unseasonably warm temperatures don't just affect life in ski resort communities. In Cleveland, Ohio, a Fox affiliate recently reported how warmer weather is impacting revenue for local businesses:
And here's their report:
The trend toward warmer temperatures and climate not only in the U.S. but around the world may not be a short-term phenomenon. EB-5 visa investors should consider the financial implications of rising temperatures and weather-related circumstances as they evaluate whether an operation can generate sufficient revenue and create jobs.