Welcome everyone and thank you for coming to this year’s Girdwood 2020 banquet. Wow! Six ski seasons, time really has flown by. We have come a long way, and I am very proud of all that we have accomplished.
Now, Girdwood and Alyeska being recognized by National Geographic as one of the best 25 ski towns in the world, it is just incredible to me. Quite frankly, it is reflective of the great relationship the Resort enjoys with Girdwood, the Municipality of Anchorage, and the State of Alaska. It is not only the governmental entities however; it is also our relationship with the people: the individuals and families that live here in Girdwood. Our employees, now nearly 700 strong, and perhaps most of all it is about our relationship with the customer, our customers who primarily come from within the state of Alaska.
Today, 80% of the Resort’s winter business is in-state tourism. While I can see that number drifting modestly lower over the coming years, Alaskans, particularly Alaskan families, who we now recognize, will always be our primary winter customer. We hope that Alaskan families will continue to be an increasing percentage of our summer business as well. A year or so into this project, I was struggling for direction; what were we going to do differently than Seibu? What were we going to do that would not only be a better customer experience, but yield a better financial result – One that would lead to long-term economic sustainability not only for the Hotel, but for the ski area as well. A vision that would preserve the jobs we have and would grow our employment over time. A vision that would anchor and drive year-round tourism in southcentral Alaska. The people from Seibu weren’t inept. They had built many resorts across much of the Pacific. While back in 2007 we had started to make some progress with respect to the quality of our product, we were still largely using Seibu’s model. What could we do differently?
At some point that second winter the light came on for me. People didn’t want to come to Girdwood to stay in a formal Japanese hotel; a hotel that wasn’t particularly inviting for families; a hotel that did not feel very Alaskan. People wanted to come to Alyeska for an authentic Alaskan experience to a Hotel that had a great lodge feel. One that celebrated Alaskan art and heritage, featured Alaska food products, and perhaps most of all, welcomed Alaskans. Our mission became to make the Resort Alaska’s favorite place to vacation, and knowing that if we did, people would come from all over the world to be here. Many good operating decisions flowed from this idea as well as the renovation of the hotel and our various restaurant outlets. Today we like to think we have at least one restaurant that works for every customer, no matter what his or her budget is. The Hotel does have a terrific lodge feel and was once again named to “Conde Nast Top 50 Ski Hotels in the World” list. And yes, today we are Alaska’s favorite resort.
Most of you are very aware of the changes we have made around the Resort so I’m not going to take up your time with a recap of the things we have done. Let’s talk about the future.
After several years of studying various options, I am pleased to announce that this summer we will be installing a new high-speed quad. The new chairlift is a state of the art Dopplymayr lift, made in the U.S. The lift is a detachable quad and will be replacing the existing Chair 4 lift.
The hardware has already begun to arrive on site, and we expect to decommission the existing Chair 4 shortly. The install contract alone represents more than a million dollars of work, and will take well into September to complete. If all goes according to plan, Di and I hope to finish this summer’s mountain biking season on the new lift. And, we expect the lift to be fully operational for the start of the 2012/13 ski season. When completed, the ride time on the new Chair 4 will be reduced to a little under 5 minutes. And, as the new lift is a detachable with a slower speed for loading and unloading, we expect far fewer stops and starts, all greatly enhancing the customer experience.
In conjunction with the new lift, we will also be pursuing three large-scale summer grooming projects to better enable the lower mountain to handle a higher volume of skiers. We will be eliminating the large mound on the skiers’ right side of Waterfall, thereby widening the run and making it more useable for intermediate skiers and riders. We will also be blowing up Zug’s Knoll near the top of chair 1.
Perhaps the most significant grading project of the summer, we will be creating a bypass road around the bottom of chair 6 around the skier’s left side of Chair to connect the bypass road to the top of Von Imhof Run. We will also eliminate the Denali Scoop, which comes off of Denali Run. You will no longer be able to ski down the runway and through the maze area to get over to Steilhang. This represents the first real attempt to address the runway skier safety issues caused by the placement of Chair 6 bottom terminal many years ago. Our hope is that the combination of summer grooming projects and the new lift will help spread out skiers on the mountain, ease the congestion on chair #6, and increase the utilization of the lower bowl.
I want to thank Chris Cushing and Mark Hamlin of Snow Engineering, who are here with us tonight, as well as Oswald Graber from Outdoor Engineering who could not be here tonight, who collectively designed the lift, for their patience in dealing with us, and the numerous great ideas they contributed to these projects.
I would also like to thank the Stevens family for letting me name the lift after Ted. Ted was a great man and a great friend of the Resort as well as many of us here tonight. He was one of my first friends in Girdwood. He was among other things a man who understood the necessity of investing in infrastructure. I am proud and honored to name the lift Ted’s Express after him. Toast to a friend of the resort, a friend of Girdwood and a great Alaskan!
I wanted to mention Chugach Electric and thank them for all of their efforts to improve the electrical service here in Girdwood. This has been a challenging winter for all of us. In December alone, we had 29 separate power outages. We lost three Sunday’s of business both on the mountain and here at the Hotel due to a lack of power. Two of them we were sold out nights. It was brutal, but through the efforts of CEA and Representative Hawker, Senator McGuire, and Senator Giessel, the Governor’s office and Girdwood 2020, there is now light at the end of the tunnel.
Last year the legislature approved a $1 million dollar grant in state matching funds for CEA to run a second electrical feed, a buried line, from the substation through town to the Resort. When the design proved a little short for our needs, CEA quickly added to the design and I am happy to report that an additional $500k grant has been approved by the legislature and will be added to the project targeted for completion this summer. We believe this second line will provide a great deal of additional operating flexibility, as well as provide a higher quality of service. We appreciate the efforts of both the State and CEA without which we would have been forced to delay further capital investment here at Alyeska.
This is of course the same kind of state legislative support the community received last year when, with the Governor’s office, the state funded a $3.5 million grant to the Municipality of Anchorage for the extension of Arlberg Avenue. Randall Call reports that we are making good progress with respect to actually getting underway with construction. Through our work with the Sullivan administration, we have been pursuing a public/private partnership agreement whereby we would actually build and warranty the Arlberg Extension for the Municipality. This approach will not only help insure that the funds received from the State are adequate to cover the cost of the project, but potentially allow for construction to begin late this summer. I know both Mayor Sullivan and Assemblywoman Jennifer Johnston have been instrumental in moving this agreement along, and I want to thank them personally for their efforts.
We are very excited to see this get underway as it will allow us to build a fairly large day skier parking lot close into the Tram, off the extension. Inclusion of utilities in the road also opens up the possibility of commercial lodging development along the alignment. Many of you know that I am anxious to expand the bed base here at Alyeska, and am particularly focused on alternative lodging options. I think it is critical that we offer more affordable alternatives, particularly as occupancies and rates rise at our existing Hotel. We have worked hard to cultivate in-state business, particularly in state family business, and I don’t want the success we have had to undermine in-state business over time. We are currently working on designs for motor inn style limited service lodging properties both in the day lodge area and on the land that will be opened up by the extension of Arlberg. We would expect each of these projects to be significant job creators – perhaps 50 to 100 year round jobs each, in addition to the jobs created during construction.
At my request, the Arlberg Extension design currently calls for trail head parking lot at the end of the extension. I think this is very exciting. People should not have to deal with the Resort when all they want to do is go for their run in the afternoon, or in the winter take a quick lap or two on the new Girdwood Nordic Ski Club trail system. The Resort and the parking here can be crazy at times and I think it is great that people will be able to park out at the trail head and do their own thing. I know the USFS has long coveted a dedicated trail head for Winner Creek, and I presume at some point they will work it out with the HLB, whose land the parking will actually be on. With utilities in the road, I see no reason why a couple of simple bathrooms shouldn’t be developed, serving both winter and summer users. I do think the parking and the additional trail usage that will result is going to bring to a head the discussion regarding the viability of the hand tram. It is my personal opinion that a bridge needs to be built. It is both an issue of safety and capacity. With the increase in summer usage, the hand tram has simply become functionally obsolete. Whether it is Parks and Recreation, the trails committee, or the Forest Service, the Resort stands ready to support who ever tackles the future Winner Creek bridge project.
Again, thanks for coming tonight and showing your support. Thank you to the State of Alaska, the Municipality of Anchorage, Girdwood 2020 and the community of Girdwood for all the support and the great public/private partnership we have created. There still is much to do, but we are well on our way.