A recently released report by the City and Borough of Juneau (CBJ) provides insight into efforts to increase summertime revenues at Juneau’s city-owned ski area which would allow it to become financially self-supporting.
To be sure, there are some uncertainties associated with this endeavor, and assumptions and projections will need to be examined to determine their validity. However, the basic premise of counterbalancing the ski area’s subsidized winter operation with a profitable summer operation is realistic and achievable.
Historically, much of the concern about Eaglecrest has centered around their uneven financial performance which, in large part, is due to unpredictable weather and their chronically underfunded maintenance and replacement program. This is why the summer program is so vital. It would stabilize revenues, eventually precluding the need for ongoing subsidies, and fund a replacement reserve that will provide for dependable equipment and facility operation.
It’s generally unknown but Eaglecrest’s taxpayer-funded subsidies, while seemingly sizable, are at a level far below those enjoyed by the city’s other recreation facilities. For example, the combined proposed FY25 budget of the Treadwell Ice Rink ($1.0 million) and that of Aquatics, the city’s two swimming pools ($2.98 million), approximately equals that of Eaglecrest Ski Area ($4.2 million). Yet their subsidies are vastly different.
Treadwell Ice Rink anticipates recovering 43% of its expenditures through user fees and charges. Aquatics only projects recovering 23%. Their combined subsidy totals $2.85 million. Eaglecrest, in contrast, proposes to recoup 78% of its expenses in FY25 requiring a subsidy of $930,000. (Later revisions to Eaglecrest’s budget reflect a 66% recovery rate which is listed in the CBJ report).
In fact, as the CBJ report explains, Eaglecrest has averaged an expense recovery since 1997 of 70%, a record that is unmatched by any other city owned recreation enterprise, and a tribute to fiscally vigilant Eaglecrest board members, management, and staff, past and present.
So, let’s give them (and our city Assembly) credit for pursuing a plan to erase the remaining 30% subsidy.
There has been some controversy surrounding the city’s purchase of a used gondola as part of this effort. Yet, the subsequent $10 million investment in the project by Goldbelt Inc., Juneau’s urban Native corporation (well-versed in tourism operations and the owner/operator of the successful Goldbelt Tram) indicates this can be a viable and profitable enterprise.
A summer operation model has been proven successful in other ski areas — even without the advantage Eaglecrest has, in a location where 1.5-plus million cruise passengers disembark every summer.
Predictably, the installation cost of the gondola has ballooned over the initial budget estimates. Nevertheless, it appears that the costs will be contained within the total funds provided by Goldbelt assuming operations commence by the summer of 2027.
As envisioned, the gondola would transport visitors to the top of the ridge at Eaglecrest, offering the opportunity to experience spectacular vistas and hiking in a pristine subalpine forest.
The CBJ report details a range of possible revenue options which would price gondola tickets at $45, $65, or $85. After adding bus transportation, cruise line commissions, and taxes, the tour could sell on a cruise ship for $118, $145, and $171.50, respectively. This compares favorably with other competing shore excursions offered by cruise lines. For example, the zipline adventure currently located at Eaglecrest is priced at $245 through the vendor’s website, markedly less than if purchased aboard a cruise ship.
Using the more conservative midrange estimate, Eaglecrest would reach operational breakeven in 2029 based on a projected summer visitation of 55,000 riders. This represents approximately 3% of cruise passengers and is well below the number of skiers that visit Eaglecrest during the winter season.
It is desirable and beneficial for the city to maximize utilization of the ski area in every way it can. This, not only to preserve a valuable city asset, but so thousands of residents and visitors alike can enjoy the health benefits and recreational opportunities that Eaglecrest provides.
Eaglecrest is on the cusp of achieving financial independence. Year-round operations and an expanded customer base can guarantee its future for many years to come.
• After retiring as the senior vice president in charge of business banking for KeyBank in Alaska, Win Gruening became a regular Opinion Page columnist for the Juneau Empire. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is involved in various local and statewide organizations. Columns, My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire. Have something to say? Here’s how to submit a My Turn or letter.
