SAM Magazine-Vail, Colo., Dec. 7, 2008-In response to the economic downturn, Vail Resorts has laid off 50 year-round employees, eliminated 92 open positions, and frozen executive pay. In addition, the company will stop matching employee contributions to the company's 401 (k) plan.

The cuts were announced last week in a memo sent by Vail Resort CEO Rob Katz to employees. The memo outlined a variety of moves that the firm is taking in the wake of economic turmoil, which has resulted in a significant drop in advance bookings at the company's five resorts of Breckenridge, Keystone, Heavenly, Beaver Creek and Vail.

"As everyone by now is aware, we find ourselves at this moment in an unprecedented environment," Katz wrote. After almost five years of strength, the world's economy is facing numerous challenges that are depressing consumer confidence and reducing consumer spending to levels not seen in decades." He noted that "many are already making comparisons to the Great Depression on 1929."

"All of this has combined to cast a cloud over our upcoming ski season. In September, we reported that advance bookings were down significantly, and it is still unclear how much of that is folks delaying their bookings or deciding not to come at all this year," he added.

On the positive side of the ledger, he pointed to VR's strong brands, unique and well-established season's pass programs, and the company's "strong balance sheet." He added, "All of these factors enable our company to not only survive, but to make us even stronger for the future. During these tough times, we must stay true to our core values and all of our stakeholders and we must be maniacally focused on delivering the exceptional guest experience that we are all about."

Katz said that VR began identifying efficiencies in early 2008, "with particular focus on anything we spend outside the company, including ongoing efforts on all of our purchasing, our energy use and our own travel and entertainment expenses. We had also begun to reduce fees to outside consultants, trade groups and service providers."

As the economic downturn has deepened, Vail has continued to seek ways to "further reduce expense, including personnel expenses, without losing any productivity or impacting the guest experience," Katz said.

Marketing is one affected area. "We will be reorganizing our company-wide marketing efforts, leaving the brand/resort leadership and all local and rapid-response efforts at the resorts, but providing centralized support for all of the creative and paid media efforts we undertake across the company," Katz explained.

He said VR's greatest priority at the moment is "the guest experience." Especially in this economy, guests "expect and deserve to be dazzled, delighted and whisked away from this tough environment. It is our responsibility to make sure that happens." \