NEWS AND VIEWS: Why is Soyuzivka operating at a deficit? (01/24/99)

NEWS AND VIEWS

Why is Soyuzivka operating at a deficit?

by Walter Korchynsky

Recently I was asked by some members in my Ukrainian National Association branch, why our UNA Estate Soyuzivka cannot operate at a profit. As a UNA advisor for the last eight years, I have repeatedly asked myself that same question.

I have been involved in many discussions on this subject and I think it is important for UNA members to understand the operation of Soyuzivka as much as possible. Just as any other business, we have income and we have expenses, and our objective is to operate at a profit.

First, let's examine the income part of this equation.

Soyuzivka income

Soyuzivka is a seasonal resort, and the bulk of its income is generated during the summer. Where does Soyuzivka get its income? The answer to this is rather obvious: from the people who visit Soyuzivka. Income is generated basically from three sources: room rentals, food and beverages. The rental of rooms provides the largest profit margin followed by beverages and then food.

As a business, Soyuzivka attempts to attract as many people as possible. This is done by holding swimming competitions, tennis tournaments and various children's camps, hosting wedding receptions, banquets, bus tours, clergy retreats, corporate meetings, organizational meetings and special events such as Fathers' Day celebrations. Halloween dances, Thanksgiving dinners, New Year's Eve dance, etc. In addition to all this, Soyuzivka provides top-notch entertainment and live dance bands every summer weekend at considerable expense.

The question, then is how do you increase income? You increase the income by increasing the number of people coming to Soyuzivka.

The next logical question is why people are not coming to Soyuzivka as they once did? There are several answers to this.

First, since Ukraine has become independent, many Ukrainians opt to travel there. Both seniors and students, who might normally come to the UNA resort, are now visiting Ukraine instead.

Second, the fall of the Canadian dollar to historic lows against the U.S. currency makes it very costly for Ukrainian Canadians to visit as they once did.

Third, the number of Ukrainians living in the eastern United States within driving distance of Soyuzivka has decreased dramatically. It is a well-known fact that many of our retirees have moved to such states as Florida, California or Arizona. Our younger generation has spread out to places like Nevada, Georgia, Texas or other places where they could find good employment. It's no longer that easy to visit upstate New York when you're a couple of thousand miles away.

Soyuzivka expenses

There are a multitude of expenses incurred in operating the UNA estate. You need labor, energy, insurance, maintenance and various equipment. Let's not forget the other items that people take for granted like soap, towels, glasses, waste removal, cleaning supplies, etc. Also, real estate taxes must be paid and they are quite high in the Soyuzivka area.

Let's start with labor. We can control our labor costs, but only to a certain degree. For example, the federal minimum wage was recently increased, which resulted in an approximate annual increase of $25,000 of expenses at Soyuzivka.

Electricity, gas and oil in 1997 cost $152,000. While studies have been done and energy conservation measures have been implemented, it is a fact that energy costs in New York State are among the highest in the nation.

Because Soyuzivka is located in New York, this means we are subject to the very demanding regulations that this state requires. As a facilities director in this state, I know first hand how costly it can be to come into compliance with the myriad health codes, fire codes, water safety codes, electrical codes, petroleum storage regulations, structural safety requirements, etc. Consider that we spent $300,000 in 1992 to correct a structural deficiency in the pool. Another $275,000 was expended on our water purification system to comply with New York state's health laws.

Insurance is another costly necessity of doing business. This year alone our liability insurance premium increased by $9,000, raising the insurance premium to $73,000 per year. Consider how many drinks you need to sell at the bar to pay for that.

Maintenance of the buildings and grounds is another necessity. Roofs need replacement as do boilers, pumps, freezers, refrigerators, lawn mowers, laundry equipment, kitchen equipment, television sets, beds, carpets, etc.

Conclusion

The Catskill region is not what it was 30 or 40 years ago. The beauty of the area is spectacular, but not the economy. Constantly increasing expenses and dropping revenues have forced once-thriving resorts like the Granit, the Nevele and the Concord into financial distress. The Granit, located just a few miles from Soyuzivka, was forced to close two years ago. The Nevele was sold and other resorts are having financial problems. So far, the UNA has managed to subsidize the cost of operating Soyuzivka. But how long can this go on?

In conclusion, the future of Soyuzivka is in real danger. We cannot lose Soyuzivka. I encourage everyone to think very seriously about this issue.

If you have any suggestions and ideas, no matter how far-fetched they may sound, please send them to: UNA, 2200 Route 10, P.O. 280, Parsippany, NJ 07054.

Mark your envelopes "Soyuzivka." As a member of the General Assembly newly re-established standing committee on Soyuzivka, I assure you that I will personally share all your ideas with the committee. Your involvement is needed and appreciated.

Walter Korchynsky of Horseheads, N.Y., is an advisor on the Ukrainian National Association's General Assembly.

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