Vermont’s tourism and hospitality industries are feeling pressure from rising costs and shifting consumer habits, a group of executives told Federal Reserve Bank of Boston President Susan Collins during a roundtable this week in Killington.
Several of the business leaders said they had raised prices to cope with across-the-board challenges in labor and materials, even as they see signs that their middle class customers are becoming more budget-conscious.
Collins oversees one of the 12 regional banks in the U.S. Federal Reserve system, which sets the country’s monetary policy. She does not currently vote on interest rates, but provides input to the committee that does.
Hearing from business leaders helps complement the broad statistical data that the Fed uses to guide its decisions, which can mask differences across locations and sectors, Collins said in an interview.
“We have to try to understand how all those things come together,” she said.
The off-the-record roundtable was held at Killington Resort’s K-1 Lodge.
The ski resort’s CEO, Mike Solimano, started the gathering with a presentation about the resort’s financial performance during its first few years under a new, independent ownership group.
The resort saw ski visits jump by 6% last year during what was the best year for Vermont's ski industry in a decade.
But that growth has been dampened by the surging cost of equipment and labor, both of which have increased faster than inflation.
And food and beverage sales — which had been growing for years — dipped by more than 10% per visitor, Solimano said.
The numbers indicated that guests are still willing to spend money to ski, while looking for places to save during their trips.
“There’s no doubt some consumers are feeling the pinch and maybe are cutting back,” Solimano said in an interview afterward.
Other participants pointed to similar signs of strain, from shorter hotel stays to declining demand for food and beverage products.
One area where demand has remained high: luxury and premium products, several roundtable participants said.
The intertwined shortages of housing and workers continues to cost Vermont businesses. Killington has built nearly 400 units of company-subsidized housing for its seasonal workers. Even much smaller businesses reported that they have found ways to offer housing in a bid to retain employees.
Solimano said the resort has nonetheless remained profitable. Its ownership group has committed to reinvesting all profits into the resort for a decade, which has led to $80 million in infrastructure upgrades over the last three years.
Federal data released Tuesday showed that inflation remained elevated in October in New England and nationally.
