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The disturbing disappearance of winter in the Northeastern United States has surely got the ski resort industry down. But resorts have plenty of other things to worry about as well.

Over the last twenty years large conglomerates such as Intrawest, The American Skiing Company, and Vail Resorts have gobbled up many of the marquee ski mountains and turned them into cookie cutter winter wonderland megaresorts. The mountains feature expanded terrain, impeccably groomed slopes, extensive snowmaking, heated gondolas, and high speed chairlifts. Off the slopes, theyve built "resort villages replete with condos, spas, boutiques, and amenities galore. The ski resort industry is in a classic pattern of sustaining innovation; the larger, more successful resorts are getting bigger and bigger, pouring in massive resources to keep pace in the race to add high-end features.

But where does this leave the smaller, often family run resorts that simply do not have the resources to compete? Winters like this one are devastating for a resort without extensive snowmaking and alternative activities. Many are stuck in the mud.

When caught in a bruising sustaining battle that gives clear advantage to powerful incumbents, other players ought to look for new business models that might enable them to beat the market in new ways by satisfying underappreciated dimensions of performance. In the world of winter sports, smaller resorts would do well to consider the disruptive new business model being developed by Echo Mountain Park in Colorado.

Echo is a new resort built exclusively for freestyle snowboarders and skiers. It is much smaller than traditional resorts, covering just 50 acres with a vertical drop of 600 feet, miniscule for Colorado. There are no groomed runs, no gondolas, no moguls; Echo is 100% terrain park, all jumps, rails, and half pipe. It is relatively cheap and easy to operate since there is much less need for snow coverage and maintenance and it can handle considerably higher utilization than its competitors (many more freestylers fit on a slope at a time since they tend to congregate around jumps, watching their friends and taking turns). It is more skate park on snow than downhill resort.

This approach is much more economically viable than, say, building another Vail, and it is also perfectly targeted at the fastest growing segment of the winter sports industry the youth market. Prices are low ($35 vs. $70-plus at competing resorts), the entire park is lighted so lifts run until 9pm daily, and the mountain is a quick 30 minute drive from Denver. The cafeteria sells microwavable burritos and red bull, and kids crowd around video game consoles while they eat. The resort operators field user requests and suggestions online, actively adding and subtracting features according to popularity. The dcor, music, and atmosphere targets the young.

Jerry Pettit, Echos owner, sums it up: "Its nothing against places like Aspen, but the young people we consulted early on told us they cant afford to pay $75 for a lift ticket or $14 for a buffalo burgerWhat kept coming back to us was: Keep it inexpensive. Make it for us.

This alternate approach is clearly inferior to the classic ski resort in many ways, but it is also much more attractive and accessible to a large and growing demographic because it is designed to satisfy a Job they want to get done. Due to Echos proximity to a major metro area, affordability, and targeted delivery of an experience, it is increasing consumption, drawing riders from competitors but also from improvised jumps on backyard hills and television screens in suburban bedrooms.

Finally, the path forward is relatively clear. Megaresorts are not organized to respond all of their capital-intensive investments mean that they could not possibly halve ticket prices. The Aspens of the world will also be tempted to shun this new model because they suffer from an asymmetry of motivation. They are focused on serving their high-end, condo-buying, boutique-shopping clientele, and in many cases would be happy to clear their impeccably groomed slopes of the troublesome, loud, and etiquette-less snowboarding riffraff.

Unsurprisingly, Echos owners are looking to export their disruptive model to new locations. Business Model Innovation is fueling their success in spite of adverse market conditions.

Note: "Steeze is snowboarder slang for "style

See:
New York Times, "Snowbound Neverland in Colorado 1/5/07
www.echomtnpark.com