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July 10, 2001

A Market Ripe For More Barter—Utah's Ski Resorts

Lost businesses, due to the hubbub of the coming 2002 Winter Olympics, has many of Utah's ski resort owners scratching their heads. They had expected a windfall to their area, but now it has become a different story, as once-loyal customers are expected to be heading to Colorado or Canada.

A spokesman for Ski Utah, the state's ski-industry trade group, says some resorts are bracing for revenue to drop 40% or more next year. As a result, ski reports and hotels are planning a big marketing effort to lure consumers onto their slopes next season.

A Similar Situation Exists On Famed Catalina Island

Catalina Island, just 26 miles from the California coastline, has long been considered a jewel for Southern Californians. It serves as a perpetual getaway for the mainland residents who make up more than 70% of its visitors.

But things have changed, Catalina faces a lethargic economy and dwindling visitor counts. Plus there is mounting competition for tourists' dollars in Southern California. Annual visitors are down 15% and hotel occupancy rates are down 20%! (The Island is up against overnight destinations such as San Diego, Santa Barbara, and Palm Springs.)

Although the circumstances are different, one fact remains: barter can be a tool to facilitate greater tourism and generate more business.



Here And There. . .

  • Delta Airlines, which still owns 32,212,199 common shares of Priceline.com as a result of being the first major carrier to agree to work with them, saw the price of shares rise to $9.91 this month. A considerable increase from its low of $2.31 a share. (Priceline's high was $104.00 a share.)

  • Racing legend Andy Granatelli's home in Montecito (cover story #46 of BarterNews) has been sold for $30 million. Granatelli's ubiquitous STP ads in the '50s were often acquired on trade. He made millions selling the additive and built several multi-million dollar estates.

    Granatelli sold his home outside of Santa Barbara to James Q. Crow, the founder and CEO of Level 3 Communications, a telecommunications company based in Westminister (CO)…the location for this year's IRTA convention.

    Crow's company, having recently fallen on hard times, has not re-sold the home to Frank J. Caulfield, a venture capitalist from the Silicon Valley.

  • Business Travel Coalition, based in Pennsylvania, reports in a survey of executives at 62 major companies, including big travel customers like Black & Decker and DaimlerChrysler, that travel budgets have been slashed an average of 28%, with some up to 60%. More telling, however, is that 86% of the companies called their cuts "permanent."

    Furthermore, almost 40% of the companies are now encouraging employees to drive whenever possible if the trip is less than 500 miles. Reason? Air travel has become increasingly crowded, unpleasant, and expensive.

    Bottomline message. When the economy firms back up, there will not be the snap-back in business travel that there has been in previous industry downturns.

  • A federal mediator has told California Gray Davis that he should consider "non-cash ways" for the repayment of some $9 billion that the State was overcharged by the power sellers. The mediator will make the decision on what will be used as payment, if the energy companies and the Governor can't negotiate a settlement by a coming deadline.

  • Known as "integrated marketing" in publishing jargon, it can also be identified as a barter deal…as magazines are working harder than ever to sell advertising, and trading on a host of marketing ploys to do so.

    Among the extra services for advertisers are proprietary research and co-sponsorship of events, specially design and written research by the magazine for the advertiser, providing speakers to annual meetings, and help in customizing gifts to send to readers. It's a sign of the lean times in selling ad space.

  • More frequent flier miles will be added to the $80 billion airline currency (4 trillion airline miles at 2 cents each) now that American Airlines has settled two lengthy frequent-flier lawsuits by agreeing to award extra miles to four million eligible members.

    American Airlines was charged with changing the terms of its AAdvantage frequent-flier program in 1988 and 1995. (Only 28^% of those eligible put in a claim for their awards.)

  • Leaders from the Caribbean nations have agreed to remove the last of the restrictions blocking the free movement of money, goods, and services in the region—the final steps toward the creation of European style single market.

    This means the region will now integrate into the global economy and the Free Trade Area of the Americas—a proposed duty-free zone that would stretch from Alaska to Argentina. (The idea of a Caribbean common market was originally floated in 1989, and was supposed to have been enacted by 1993.)

  • The Financial Accounting Standards Board (FASB) voted unanimously, as expected, to enact new standards which eliminate the "pooling of interests" accounting treatment for merging companies. The change means many things, one of them will be the use of more cash in the acquisition effort…rather than a company's stock.

    Opposition to the elimination of pooling faded when the accounting rule makers proposed eliminating goodwill amortization. So the old approach of amortizing goodwill for up to 40 years is gone.

    Rather, companies now must subject the acquired goodwill to an annual "impairment test," aimed at determining whether there has been a decline in the value of that goodwill. Write-offs would be required only if the value has been impaired—reducing the goodwill assets to fair value.

 

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Copyright BarterNews 2003. Redistribution of BarterNews content expressly prohibited without the prior written permission of BarterNews.