Tag Archives | Vail

Is Vail taking over the ski world? And is this a good thing?

@Vail Resorts

@Vail Resorts

Last week the ski world reverberated with the news that Vail was entering into an agreement to buy Whistler Backcomb, arguably the crown jewel of Canadian ski resorts, and one of the best and largest in the world.

This is anything but small potatoes. Vail is spending $1.1 billion for the acquisition, or $1.4 billion Canadian. As part of the deal, Vail would acquire 100 percent of the stock of Whistler Backcomb and Whistler Blackcomb shareholders would receive C$17.50 per share in cash and 0.0975 shares of Vail Resorts common stock, for a total value of $27.38 per share or C$36.00.

There’s no denying that Vail has been on a bit of a spending spree, buying nine resorts in three countries in less than six years. Here’s what they’ve acquired over the past fourteen, and for how much:

  • 2002 • Heavenly, California: $99.2 million
  • 2010 • Northstar At Tahoe, California: $63 million
  • 2012 • Kirkwood, California: $18 million
  • 2012 • Afton Alps, Minnesota; Mt. Brighton, Michigan: $20 million
  • 2013 • Canyons, Utah: $305 million (50-year lease)
  • 2014 • Park City Mountain Resort, Utah: $182.5 million
  • 2015 • Perisher, Australia: $136 million

Can they afford it? According to Jason Blevins of the Denver Post, “Vail Resorts last fall reported $1.4 billion in revenue for fiscal 2015, marking the sixth time in the last decade the company’s annual revenues surpassed the billion-dollar mark. The company showed a 36 percent in EBITDA to $365.8 million in fiscal 2015 and strong sales of its popular Epic Pass in the spring of this year has the company tracking toward another record year for fiscal 2016.”

In a nutshell, they’re doing well. And if they can afford it and it fits with their business plan, well, they’re free to do as they like.

For skiers, the benefits of all these acquisitions are obvious: Ski areas are capital intensive, and Vail’s deep pockets can mean greater investments in things like lifts, snowmaking, grooming, on-site amenities, and so on. It might even mean better salaries for resort employees, which can help attract top tier people to its resorts. And it can mean investments in more and better non-skiing activities, which are essential in turning its resorts into four-season destinations —  critical for their survival in the face of climate change. What’s more, a growing roster of mountains under the Epic pass  umbrella gives skiers greater access to some of the best skiing in the world. Nothing wrong with that.

But still, I’m conflicted. Like a lot of people, I’m not convinced that the Vail-ification of the ski world is a good thing. I’m always a little nervous when one company gets too big in any particular industry, and I’m afraid this is what we’re seeing here. Sure, Vail is doing well now. But as a publicly traded company — and a big one, at that — Vail is certainly captive to the crazy gyrations of the stock market. A bad stock year can cause problems not just at the Mother Ship, but at all its resorts, across the board. What’s more, Vail has a responsibility to its shareholders to continually improve its bottom line. And this doesn’t always engender practices that are to the customers’ liking. If Vail decides to increase its lift prices, for example, a lot of people at a lot of mountains are screwed. The competitive incentive is gone. And that’s not good.

For the acquired resorts, there’s the issue of having a remote corporate overlord.  Will decisions have to be approved by someone hundreds of miles away? Everything from expansion plans to the color of ski school jackets may now have to through a number of corporate layers. Will pay for employees go down, instead of up? Will issues that affect the community get the consideration they deserve? And will the acquired resorts become more and more homogenized, so they bear more resemblance to one another and lose the characteristics that once made them so unique?

I’m also worried about the tremendous influence a company as large as Vail has in the ski world. Whatever Vail does — good or bad — can have a profound effect. If Vail offers a particular amenity, for example, a lot of other resorts are going to feel pressure to do the same, whether it makes sense or not.

Which leads me to the following: all this makes it increasingly difficult for smaller ski areas to survive What’s the incentive for a skier to go to a smaller, independent resort, if they can purchase an Epic pass and have access to multiple resorts for the same amount they’d spend for one? And with Vail having such deep pockets for investment, how can a smaller area compete? Before you shake your head and say, well, that’s the market at work, survival of the fittest and all, consider this: Since the 1980’s, roughly 33% of US ski areas have gone out of business and up to 150 more are considered threatened by industry experts. Sure, there are a lot of factors that have caused this to happen. Many of these places were smaller Mom and Pop hills. And though they had limited lifts and trails, they also nurtured beginner skiers and served as feeder hills for resorts like Vail. What’s more, they offered something larger resorts generally lack: a measure of character and community involvement that goes to the heart of what skiing is all about.

Are there ways for smaller areas to stay competitive with the Vail behemoth? Not many. In recent years, the ski industry has seen little to no growth, so skiers who go to one resort tend to take  business away from someplace else. In short, one resort tends to cannabilize another. For example, Vail sold about 50,000 season passes less than a decade ago. Now the number is closer to 550,000. These skiers are choosing Vail over some other resort. And while it’s great for Vail, it’s not so great for wherever it is they’re not going.

One organization that’s trying to help stem the tide is Mountain Riders Alliance, which has made it its mission to champion smaller areas that are environmentally friendly and have a positive effect on the local community. I’ve written about them here and here, so if you want to find out more about the good work they’re doing, take a look.

The bottom line is this: Vail Resorts may be getting bigger and bigger, but I’m not sure that’s best for the ski industry. What do you think?

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A Conversation with Beth Howard, New GM of Northstar California

Beth Howard,  GM, Northstar-at-Tahoe

Beth Howard,
GM, Northstar California

I’m not sure why, but the upper levels of  ski industry management is primarily a man’s world. According to statistics from the National Ski Areas Association, there are only about 20 to 30 female general managers nationwide. So when I received a press release from Vail Resorts announcing that they’d named Beth Howard as General Manager of Northstar California, it got my attention. What does it take for a woman to rise to the top of the ski industry heap? How’d she get there? I spoke to Beth last week, the day before Northstar opened for the season.

Q: Hi, Beth. Congratulations on your new position. So have you started as General Manger yet?
A:  I’m in my third week.

Q: And opening day is tomorrow?
A: It is and it’s so exciting! Everyone is out putting together the final touches for our opening weekend. We have some storms coming tonight and over the next few days, so it’s looking like it’s going to be a great opening.

Q: So tell me, how’d you get started in the ski industry?
A: I started as a college intern 30 years ago. I was in food nutrition and business at the University of Northern Iowa when I applied to Vail. I didn’t know about the ski industry, but I immediately fell in love with the company, the majesty of the mountains, and  the environment I had to work in. I just started to grow with the company; I never imagined I’d be with it for 30 years.

Q: What was your internship in?
A: I was chopping vegetables in Beaver Creek, CO, because it was in the field experience that I needed to graduate in my degree program. That’s how I got hooked. Over the years I  expanded beyond that and learned more about mountain operations, best practices, and guest service initiatives across the resort. Most recently, I was VP of Mountain Dining for the entire company. That allowed me to frequent all the resorts and get a better perspective of all our operations.

Q: How did working in that area prepare you for being the GM? What qualities are required?
A: I look back and I’ve been in a leadership position across my entire career. Even though I was in a very entry level leadership position after my internship, I’ve always been responsible for leading others, leading initiatives and achieving results. Along the way I learned where I needed to hone my skills and strove to push into areas where I didn’t have expertise and become comfortable with that stretch so I could improve those skills.

Q: There aren’t too many women in senior positions in the ski industry. Does being a woman present any special challenges for you?
A: I’ve never focused on the fact that I’m a woman. I’ve always paid more attention to my skills and the qualifications I need to do the job; I’d say that’s been the thread throughout my entire career. I haven’t seen being a woman as a  special challenge. I  also realize that I may be used as role model for other women within and without the company and and I take that very seriously. But I never thought being a woman was a hurdle at all.

Q: Any advice for women who want to enter the ski industry?
A: If you want to be in the ski industry – if that’s your passion — then absolutely enter into that path. I think the most important thing is realizing what your passion is, as well as your aspirations, and then  committing to developing all the skills around that so you can lead a resort one day, if that’s what you choose to do.

Q: What do you like best about being in resort management?
A: I’m very energized to be leading a team of people and dealing with the many complexities of a resort to execute a wonderful guest experience. It’s not an easy path. I think seeing all that come together, as well as the wonderful talent around me and the smiles of our guests —  that’s what’s energized me and kept me so passionate for so long.

Q: What challenges do you think you’ll face as GM?
A: The challenges are similar to what energizes me. There are so many moving parts and complexities involved in running a resort. My focus is making sure we’re all working together as a team and communicating well. We have to stay laser focused on that every single day. We’re already known for our great guest service, but we want to take it to the next level.

Q: How do you think Northstar compares to the other Tahoe resorts?
A: I think it’s our guest service that really makes us stand out. We’re committed to delivering on every touch point,  from the time spent getting on the bus all the way to the rentals to interaction with our lift operators, the snow surface, our warm S’mores in the afternoon at the skating rink — it all makes us special and differentiates us.

Q: Do you have anything new and exciting going on this coming season?
A: We do! I mentioned the S’mores.  We call it S’more Time. At 3:30 everyday in the Village, warm S’mores come out on trays and are served to all of our guests. I think that’s a tradition we’re going to continue. We also have two new things up on the mountain. Starting December 19 at 2PM every day we’re going to have a pop-up champagne bar, where our guests can ski in and have a commemorative toast and relax on Adirondack chairs around a fire pit. Then we’ll take it down so everything can be groomed, then put it back up the next day.  We’re also introducing something called Mountain Table, where we’ve paired with some of our local wineries. Our executive chef will prepare a five course meal with them on select Fridays throughout the winter. For us, it’s another way for our guests to get up on the mountain and have an evening on-mountain dining experience with great wines and cuisine.

Q: I read that Vail is launching an initiative to get women more involved in skiing and boarding. Will Northstar be participating in that?
A: Absolutely! We’re very excited about it. We have a couple new learning options available for women skiers and riders. We have a Women’s Ultimate Four Program, which runs from 10:30 in the morning til 3; that’ll allow them the flexibility to manage all the other things they’re trying to do with the kids, their families, and so on. There’ll be a maximum of four per group, all levels welcome, and they’ll be working with a female instructor. We’re trying to customize programs that would to allow flexibility in the schedule and also give them that wonderful experience up on the mountain. We also have an afternoon beginner program called Ladies First. This goes from 12:30 to 3, and it’ll be offered throughout the season. Again, it allows them greater flexibility with the schedule. We’re hoping this resonates with that group.

Q: Do you have a favorite run at Northstar?
A: I love this mountain. I’m not sure I have a favorite one. I  really enjoy the backside because of the long, wonderful runs.  For a groomed beautiful blue run, Loggers Loop is pretty fun. I think a lot of guests would enjoy that as well. I think after I get this first season under my belt I’ll have a lot more favorites.

Q: Do you get a chance to ski very much?
A: Yes. A wonderful part of this job is being out on the mountain a lot.

Q: What do you ski on?
A: I ski on K2s. That’s been my ski of choice. I have a couple pairs, and I love them. I’m on all-terrain superstitions right now.

Q: Does your family ski?
A: Yes! I have an 11 year old son and a husband of 15 years and they both ski, so we’re a skiing family and it fits right in.

Q: And you’re originally from Iowa?
A: Yes. I grew up on a small family farm.

Q: Not a lot of skiing there.
A: No. Not a lot of skiing. But I’m making up for it now.

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The Vail-ification of the Ski Industry.

Seems like everywhere you look lately, you see a Vail Resort.

And that’s hardly an exaggeration. Vail recently announced its entry into a long-term lease with the affiliate companies of Talisker Corporation for Canyons Resort in Park City, Utah. Vail takes over ski area operations and Talisker Corp. retains the right to develop 4 million square feet of real estate at the resort. The transaction also incorporates the potential for the lease, without additional consideration, to include the land under the ski terrain of Park City Mountain Resort that’s adjacent to Canyons and is currently owned by Talisker and subject to pending litigation.

This gives Vail Resorts its 10th ski area in five states and its first in Utah. Let’s add ’em up:  Vail (of course), Breckenridge and Keystone in Colorado; Heavenly, Northstar and Kirkwood in the Lake Tahoe area of California and Nevada; Canyons in Park City, Utah; Afton Alps in Minnesota and Mt. Brighton in Michigan; and the Grand Teton Lodge Company in Jackson Hole, Wyoming.

Granted, Vail must be doing something right. The company makes a ton of money, and Vail is consistently rated the #1 skiing destination by SKI Magazine. What’s more, a lot of people — at least from what I’ve seen on the internet — are positively delighted by this new development. Thanks to its deep pockets, Vail will most likely make many critically needed investments in the Canyon’s infrastructure. It’ll add another ski resort to the Epic ski pass. And it definitely beats having the Canyons fall into disrepair or bankruptcy. No one wants that.

Still, a part of me feels a bit unsettled.  Okay, so I’m the kind of person who doesn’t love chain stores, fast food franchises, or shopping malls. But despite Vail’s outstanding reputation, having a single company control such a large portion of the ski market may not be all it’s cracked up to be. After all, is bigger always better? I’m not so sure.

So in spite the accolades being heaped on the acquisition by the ski world at large, I have a few thoughts I’d like to share:

• Vail is just too damn big. A string of acquisitions has made it the gorilla of the ski industry. Should something go awry (i.e. remember the American Ski Company?), we’re left with a huge mess on our hands. Let’s hope this doesn’t happen, but one never knows…

• Following up on the above, Vail has a huge amount of power. This is nothing new, but it’s even more true now. And contrary to what you might think, this can result in fewer choices for skiers. I can illustrate this with something that has nothing to do with skiing, but with which I’ve had a bit of experience; the book business. A buyer at a major chain of bookstores didn’t like a particular book by an author I know. So they didn’t give it the table or shelf space it deserved. And though the book did okay, it didn’t do as well as it would have if this particular retailer — excuse me, if this particular buyer — had decided to give it more of a push. Translate that over to skiing. The implications are enormous in everything from retail space to what’s sold on site. Not only is this not particularly good for local businesses, but it creates a more homogenous culture that I believe detracts from the skiing experience.  This may not trouble you, but it does trouble me.

• As the industry giant, Vail can do whatever it wants to regarding policy and price. Right now things are looking pretty good for Epic passholders. They’ll be able to use their passes at Canyons,  Vail, Beaver Creek, Breckenridge, Keystone, Northstar, Heavenly and Kirkwood Right. But it also presents a problem for smaller areas who can’t offer something similar.  I know, I know. That’s how the market works. The big get bigger at the expense of someone else. But it can be unsettling, and we may not be happy with the results.

• Vail is a publicly traded company, and as such, its main responsibility is not to skiers, but to its stockholders. Even with lift ticket prices approaching astronomical levels (a single-day, walk-up-to-the-window rate at Vail this year was $129), lift tickets make up only a small portion of the company’s total business. The bulk is taken up by real estate, travel arrangements, and other peripherals. As Rob Katz, Vail chairman and CEO, said in the company’s press release,  “We will…leverage our guest database and domestic and international sales and marketing efforts to continue to drive Canyons’ growth. Talisker has an outstanding track record of high-end resort development and we look forward to working together to create something truly extraordinary with Talisker’s four million square feet of remaining approved residential and commercial density at Canyons.”  Of course, Vail is smart enough to know that good skiing — and a good skiing infrastructure — attracts customers.  Hopefully, they’ll continue to keep that in mind as they move forward.

I don’t mean to sound negative. Like everyone, I’m for whatever it takes to keep skiers happy and the ski industry successful. As a business that’s held captive to the caprices of Mother Nature, the industry certainly has its challenges. Let’s hope for the best.

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Vail must be reading TheSkiDiva.com.

We’ve had a lot of threads on TheSkiDiva.com about helmets. Most people are for them, but some aren’t for a variety of reasons — everything from “helmets makes me look dorky” to “they won’t help in a high speed crash.”

Hey, my feeling is that it certainly can’t hurt. Helmets offer more protection than just a thin wool hat. But the final decision should be up to you. I mean, if you want to spend the rest of your life drooling all over yourself, hey, go for it!

That being said, I’ve mentioned before — here, here, and on the forum — that helmets should be mandatory for three groups: kids, patrollers and instructors. Kids, because 1) they don’t know any better; 2) we should do whatever we can to protect them, and 3) we put them in car seats, we should at least do this. And patrollers and instructors (at least while they’re on the job) just because I think it presents a good example..

Now Vail has gone and made helmets mandatory for employees and kids in the ’09/’10 season.

Here’s the text of the press release I received from them today:

Vail Resorts Makes Helmets Mandatory for Employees in 2009-2010
Winter Season

Company also announced that helmets will be required for all children’s group ski and ride lessons and as part of their rental packages

BROOMFIELD, Colo.—April 13, 2009—Vail Resorts, Inc. (NYSE:MTN) today
announced that, beginning with the 2009-2010 winter season, the Company will
require all employees to wear helmets when skiing or riding on the job at each of its
five mountain resorts: Vail, Beaver Creek, Breckenridge, Keystone and Heavenly. Helmets will be provided to every employee next fall as part of their standard
uniform for working on the mountain. This new initiative is part of Vail Resorts’
overall commitment to skier and snowboarder safety programs.

“At Vail Resorts, the safety of our employees and guests is a top priority and we
believe the time has come for us to take our commitment to safety to the next level.
Our employees will set the example next year for all who enjoy skiing and riding our slopes,” said John Garnsey, co-president of Vail Resorts’ Mountain Division and chief operating officer of Beaver Creek Resort.

The Company also announced that it will require all children, ages 12 and under, who participate in a group lesson through one of its five resorts’ ski and ride schools
to wear a helmet. Furthermore, a helmet will become a required part of any child’s
(ages 12 and under) ski and snowboard rental package offered at all of Vail Resorts’
retail and rental outlets, unless a parent or legal guardian signs a waiver to decline
use of the equipment.

“We firmly believe when children are participating in our ski and ride school
programs that we must provide them with the proper equipment that promotes enjoyment of the sport while also reducing the possibility of injury. Even though we
will now require children in our ski and ride schools to wear helmets and make them
a mandatory part of every child’s rental package, we strongly recommend the use of helmets for all of our guests, regardless of their age or ability level,” said Blaise
Carrig, co-president of Vail Resorts’ Mountain Division and chief operating officer of Heavenly Mountain Resort.

I applaud Vail’s decision to do this. Hopefully, other resorts will take notice and follow suit. If it helps save lives and get across the message that helmets are worthwhile, then I’m all for it.

Just my two cents.

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Hail Vail!

In case you haven’t heard, Vail Resorts recently announced it’s going to purchase wind power credits equal to 100% of its annual energy use, making it the second-largest corporate buyer of wind power credits in the US (after Whole Foods Market).

According to Vail, the decision reflects a growing concern about global warming among U.S. ski resorts. They’re not the first ski resort to do this: Aspen already offsets all its electricity with 21,000 megawatt hours of wind power credits.

Vail Resorts estimates that the 152,000 megawatt hours of wind energy credits it’ll buy are equal to eliminating 211 million pounds of carbon dioxide emissions a year — the equivalent of taking 18,000 cars off the road. Companywide, Vail Resorts uses about the same electricity as about 14,000 homes. It operates the Keystone, Breckenridge, Beaver Creek and Vail ski resorts in Colorado, Heavenly Mountain ski resort near Lake Tahoe, the Jackson Lake Lodge in Wyoming, and other resort hotels from California to Vermont.

To anyone concerned with global warming (and I know all of you are), this is great news. Let’s hope other ski areas take note and follow suit.

Two ski poles up for Vail! (And Aspen, too!)


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