Gunstock Area Commission Meetings Reveal COVID-19 Impact
The resort has seen significant reductions in revenue and season pass sales.
Sunday, May 10, 2020, NewEnglandSkiIndustry.com
Gunstock (May 2, 2020 photo)
The onset of COVID-19 closures was quite sudden in New England, as all ski areas suspended operations within a few days time. County-owned Gunstock Mountain Resort was among the final four ski areas to operate, closing on March 18. The Gunstock Area Commission has continued to meet and advise since the shut down, giving insight into the COVID-19 impact on the ski area.
Prior to March, Gunstock's earnings before interest, taxes, depreciation, and amortization was $130,000 ahead of the prior season. However, the March 18th shut down resulted in more than $800,000 in lost revenue in March alone, according to General Manager Tom Day. Season pass revenue is expected to come in at 50% below normal, increasing the resort's exposure to cash flow issues.
Meanwhile, due to COVID-19 concerns, as well as expected decreases in summer tourism, Gunstock's main summer attractions have been suspended, including the zip lines and mountain coaster. Gunstock has spent nearly $5 million to install these attractions in recent years, adding to its debt portfolio. The campground and Segway tours are still planned to operate this summer.
Due to its county government ownership, Gunstock was unable to participate in the Paycheck Protection Program or Small Business Administration loan program under Federal CARES Act. According to Day, other ski areas were approved for $600,000 to $700,000 in loans.
Though Gunstock has cash reserves, it is concerned about unavoidable expenses with minimal cashflow. Management was able to defer $150,000 in debt payments for one year and has furloughed 33 year-round employees (a 58% reduction in staff), who may remain furloughed until ski season.
Unable to generate adequate cashflow to fund maintenance and improvements, Gunstock has required a county-backed revenue anticipation note to get through the off-
season every year since 1991. According to the commission, the bridge loan averages $850,000 per year. Management requested $1.4 million this off season, however the commission would only approve $1 million due to concerns that the Belknap County Delegation might reject it in a time in which the county is seeing significant financial issues. The commission has suggested that Gunstock could make up the difference by tapping into its cash reserves for capital improvements.
