MMSA CEO responds to drought

With skier visits down 37% and revenue off by more than $17 million due to the drought, Mammoth Mountain CEO Rusty Gregory let employees know that hours and days would be cut but no layoffs so far.

Gregory announced at a Department Head meeting last week his decision to require all salaried employees to take five unpaid days off during February. All hourly employees will be limited to no more than 30 hours per week. Gregory said he would reassess as March approaches. It mostly depends on snow. Gregory’s memo points out that snowfall on Mammoth Mountain averages 400 inches per year. At the end of January, Mammoth Mountain measured only 60 inches of snow for this winter.

Skier visits are down 37%, according to Gregory, who said the rate of decline continues to erode. He said the last week in January’s visit total for Mammoth and June combined was 19,805 which is less than one strong non-holiday Saturday in a normal season. Revenue is 19% below budget or $17.1 million down. The CEO said, “We cut expenses across the board beginning in early January including seasonal employees hours and pay. Unfortunately,” he said, “it is impossible to cover the revenue shortfall by expense cuts.”

Gregory also points to the fact that Mammoth and June Mountains are “in the throes of a third consecutive year of drought.” He said the winter of 2011-12 saw the worst year over year decline in visits in ski industry history with 263 inches of snow. The 2012-13 season saw 308 inches of snow and was the driest year on record for California. Now this year, which looks even worse.

Gregory did praise the performance of the entire staff. He called it “truly amazing.” He said the Net Performer Score, which is the measurement of guests’ likelihood to recommend Mammoth is 78 for the season so far. That’s 7 points higher than the goal. Said Gregory, “We have the right team and I intend to do everything in my power to keep us together to avoid layoffs like those in the drought of 2012.” He said he believes that reduction of work days and pay proportionally among salary and hourly staff will “do just that while allowing us to keep as much of Mammoth and June Mountains open as snow coverage allows.”

Gregory’s memo says, “It breaks my heart to be reducing your hours of work and pay.” He ended by saying, “Snow is coming. Keep the faith.” The entire memo is posted below.

MEMORANDUM 

TO:  All Employees

FROM: Rusty Gregory – Chairman & CEO

DATE: January 31, 2014

RE: Mammoth Business Update

You have likely heard by now of my decision, announced at Wednesday’s Department Head meeting, to make some significant temporary pay reductions as part of a larger effort to respond to the shortfall in skier visits and revenue due to the drought.  All salaried employees will be required to take 5 unpaid days off during the month of February.  All hourly employees’ hours will be limited to no more than 30 hours per week.  This is the plan for February only.  I will reassess as March approaches.

As you know, Mammoth and June Mountains are in the throes of a third consecutive year of drought.  Snowfall on Mammoth Mountain averages about 400 inches per year.  We received 263 inches of snow in 2011-12, the worst year over year decline in visits in ski industry history.  The 2012-13 season saw 308 inches, and was the driest year on record for California.  As of this morning, we have received only 60 inches of snow this winter.  The lack of snow has significantly impacted skier attendance.  Skier visits are down 37% – 193,270 from budget and the rate of decline continues to erode.  Last week’s visit total for Mammoth and June combined was 19,805, less than one strong non-holiday Saturday in a normal season.  Revenue is below budget by 29% – $17.1 million.  We cut expenses across the board beginning in early January including seasonal employees hours and pay.  Unfortunately, it is impossible to cover the revenue shortfall by expense cuts.

Despite these challenges, the performance of our entire staff, year-round and seasonal alike, has been truly amazing.  Our Net Promoter Score, the measurement of our guests’ likelihood to recommend Mammoth, is 78 for the season to date, 7 points higher than our goal.  This says it all.  You have done the impossible every day to create an incredible experience for our guests and they greatly appreciate it.  We have the right team and I intend to do everything in my power to keep us together to avoid layoffs like those in the drought of 2012.  I believe that reducing work days and pay proportionally among salary and hourly staff will do just that while allowing us to keep as much of Mammoth and June Mountains open as snow coverage allows.

Just like our guests, our employees come to Mammoth in pursuit of a dream.  My version of that dream brought me to Mammoth and it has sustained me for my 35 years on the mountain through countless ups and downs.  It breaks my heart to be reducing your hours of work and pay.  I hope you will fight to keep your Mammoth dream alive despite the hardship that this drought and the hard decisions I must make places upon you.  Snow is coming.  Keep the faith.