So how are the acquisitions working out?

[ski diva]

The past few years have seen an enormous number of acquisitions in the ski industry. I did a blog post about this in June, in case you're interested or just want to get up to speed.

So I've been wondering: For those of you whose resorts have been swallowed up by Vail or Alterra or Boyne or Peak or Powdr, or who work at a recently acquired resort, what do you think? Has it been a positive or a negative experience?

 

[mustski]

I didn't notice any difference in guest experience at BBMR last season, but it was the worst snow season that I can remember and the only one where we didn't even get most of the mountain open. The Mammoth management at BBMR had been terrible so we are all hopeful for an improved experience. Alterra has invested considerable dollars in building a kids development center at both Summit and Bear. The one at Summit is very nice; I haven't seen the one at Bear yet as that was just built this summer. The new kids' building (Summit) is much more convenient for parents and very nicely done. The addition of the magic carpet "run" right next to the parking building allows parents to be up close and personal during the little ones first lessons which I think is a huge win. Alterra also just designated Snow Summit a "no smoking" resort (parking lot only) which includes weed. We will see how the enforcement actually goes.

 

[marzNC]

The season passholders and homeowners at Snowshoe in WV have been quite happy based on discussions on DCSki and SkiSE. Alterra approved spending a lot of money for snowmaking infrastructure. When Mother Nature provided cold weather by late October, the improvements became obvious fairly quickly. By all accounts, the amount of open terrain for Thanksgiving weekend made everyone who went very happy. Snowshoe typically opens by then, but the regulars could tell how much more snowmaking had happened on some trails that usually didn't open until some time in December.

 

[Christy]

If we ever build up enough of a base to actually ski on, I'll let you know. Although this could be an interesting part of the new management. Hopefully they understand how much of a base we need around here.

 

[marzNC]

If we ever build up enough of a base to actually ski on, I'll let you know. Although this could be an interesting part of the new management. Hopefully they understand how much of a base we need around here.

Other than the new COO, do you know of other senior management changes? I remember reading that John and Kim Kircher plan enjoy skiing Crystal this season. I wonder what their son, Andrew, is doing. He was the Asst. GM for the last year before the sale to Alterra.

 

[ski diva]

Interesting perspective from an article in Outside magazine:
The Giant Resort Companies You Hate Are Saving Skiing
The corporations buying up resorts are making the slopes crowded. But they're also throwing the sport a lifeline.

 

[marzNC]

Interesting perspective from an article in Outside magazine:
The Giant Resort Companies You Hate Are Saving Skiing
The corporations buying up resorts are making the slopes crowded. But they're also throwing the sport a lifeline.

Good article.

". . .
Roughly half of a resort’s revenue still comes from season-pass and lift-ticket sales. The new multiresort passes add to that cash stream and, by locking in skiers to a family of resorts, enable execs to more precisely forecast revenues. That’s a huge boon to a publicly held corporation like Vail—and to skiers. With shareholders calm, the company can invest in better grooming, new lifts and restaurants, and staffing. And, of course, more resorts.
. . ."

Unless I missed it, one aspect of the Epic pass that wasn't mentioned is that sales end well before it's known how the snow will be at the VR destination resorts. While there may be a few people who buy an Epic pass and then cancel a planned trip out west because of less than optimal ski conditions, my guess is most go anyway. Especially those from the midwest. Poor conditions out west are still pretty nice in comparison to ski hills in the flatlands. Even if there are trip cancellations, VR already has the Epic pass money in the bank. That means they should be able to forecast revenue better than having to wait until March to see how things have turned out based mainly on lift ticket sales. Local season pass holders don't stay in resort lodging and may spend very little at the resort during day trips.

The Alterra COO was part of developing the MCP. Deciding to close sales for Ikon in mid-December is probably based somewhat on knowing the inside story of MCP sales in January. In the initial years, MCP sales ended by mid-Dec.

VR will have to report revenue and pass numbers. Alterra will say something, but as a private company doesn't have to go into as much detail. I would guess VR is shooting for a million Epic passes since last season 750,000 were sold. Alterra said recently that 250,000 seemed likely.

 

[echo_VT]

Peak took over Hunter and we are now starting to see changes. They have been cleaning up the hill like demolishing unused buildings and such - and they’re expanding the hill with a new lift and new trails and new glades. So far it seems good. I’d say they are certainly saving skiing while letting the management do what they do best and stay on.

To survive, the ski resorts near NYC have to cater to the new class of folks earning well enough to spend on a leisure activity. Buses are huge business but they need to target the ads on all types of people - and update the premises to attract newcomers. Old run down buildings without new decor (uh the decor is from the 70s-80s) isn’t helping anyone.

Hunter gets bus loads of Chinatown buses where the clients speak mandarin.

There is a really great program for wheelchair access skiers. I think called para skiing? I’m not sure on the name. But they don’t target the audience so not many come for that.

My husband speaks Portuguese- as an instructor he gets anyone speaking Portuguese (usually someone from Brazil). It makes a difference having staff that can speak the different languages...!

Getting into schools and attracting youth is one thing I think Hunter has done okay with - but could do more. When I see what mountain creek or Stratton is doing, I think Hunter is just behind.

 

[EasternSkiBum]

To soon to know....but the managers at Snowtime are feeling good about the acquisition by Peak.

 

[Obrules15]

The problem is Peak's finances aren't too spiffy. They've poured a ton of Money into Mt Snow and Hunter and it seems investors are getting pissy. I wonder if they'll be able to keep it up.

 

[marzNC]

To soon to know....but the managers at Snowtime are feeling good about the acquisition by Peak.

From what I've read about Irv Naylor, the founder of Snowtime, he's taken his time to find the best fit for his three ski areas. I would guess he could have sold to Vail Resorts a while back but chose not to pursue that route. Peak Resorts is publicly traded but is very much a family business.

 

[EasternSkiBum]

The problem is Peak's finances aren't too spiffy. They've poured a ton of Money into Mt Snow and Hunter and it seems investors are getting pissy. I wonder if they'll be able to keep it up.

Peak bought a trio of healthy resorts that have managed to stay in the black by expanding there 4 season opportunities. Irv Naylor has always put money back into his resorts to keep them updated.

 

[marzNC]

Peak bought a trio of healthy resorts that have managed to stay in the black by expanding there 4 season opportunities. Irv Naylor has always put money back into his resorts to keep them updated.

Peak Resorts began in Missouri, not exactly ski country. My sense of Tim Boyd from reading a few articles is that he thinks long term. He wasn't even a skier when he ended up in the ski business. He learned early about the importance of snowmaking and having a 4-seasons approach.

2009 article about Tim Boyd, CEO of Peak Resorts
Crouching Tiger, Hidden Valley
How a Midwestern golfer battled a city, the sun and his skeptics to build a skiing empire

 

[Christy]

"That’s a huge boon to a publicly held corporation like Vail—and to skiers. With shareholders calm, the company can invest in better grooming, new lifts and restaurants, and staffing."

That's a hugely optimistic view of what publicly held companies are doing right now. The trend is to value shareholders above all else, especially above workers. Shareholder profits are the number one goal.

I hadn't even thought about this angle in terms of these companies supposedly saving skiing. If they operate like many (most?) publicly traded companies, they're going to be very very bad for workers and communities. And I'd argue if it's bad for workers and bad for the ski towns, it's bad for skiing as a whole.

Maybe Vail Corporation operates differently. Obviously there's already lots of evidence as to how they operate. I just find that statement that I quoted incredibly naïve. Although also telling – – Companies do have to worry about calm shareholders before they can make the investments they need to.

We saw this locally with the last ownership of Stevens Pass. The publicly traded hedge fund that owned it made no investments and really cut things to the bone. Lifts were closed on weekdays, badly needed improvements weren't made, etc.

 

[WaterGirl]

Well, its been a weird week at Mammoth. Seems all the IKON pass holders within a 10 hour drive showed up for the recent storms. Or at least their cars were there - never have seen so many cars other than on a true holiday. Met lots of Nevada folks, and some really nice male snowboarders (?)
It did seem like college week - a pretty young crowd. Based on conversation with local retailers, it was all hard core skiers - not many rentals only hard good sales. I did pick and choose my times to ski however trying to avoid any crowd, but I really never had any wait times at the lifts. Maybe b/c the crowd was at a higher level it just seemed to flow better.

So it does seem that the IKON will bring more people to resorts that are open early or later, since its not costing them anything more.....

The only negative is that the resort is putting in a smelly rubber mat in all the interior walkways at main -- I'm allergic and it gives me a headache. I understand its no slip, but it reeks.

 

[mustski]

I would expect Mammoth to be busier now. It caters to the entire LA Basin, the Inland Empire, San Diego and environs, the OC, & Palm Springs. People who never wanted a Mammoth or California Pass DO want the Ikon. It’s pulled a lot of the Epic folks because they can still have Tahoe and now Mammoth too, and some big destination resorts for their one week a year ski vacation. Mammoth got a lot more snow than Tahoe in this storm so it’s the place of choice.

 

[ski diva]

This is the sort of thing that worries me. The first responsibility of big, publicly traded companies, like Vail and Alterra, is to their shareholders. So stuff like this can have a profound effect on what's going on at each and every mountain in the family. Still, Bloomberg Analytics said Vail’s geographic diversity means its long-term outlook remains strong regardless of how its stock fared Friday. Still.........

Vail Resorts’ Stock Suffered Greatest Loss In History on Friday
SnowBrains | December 10, 2018 | Industry NewsIndustry News

Vail Resorts’ stock price fell off a cliff Friday, enduring the biggest single-day loss in its history when they reported bigger than expected losses and slower than expected revenue gains for season pass sales for its most recent financial quarter, reports the Denver Post.

You might also like: Vail Resorts Offers $99 Epic Pass For All Military Members & Their Families
The company began the day at $258.60 per share, but then plummeted 17.85 percent during another rough day for the market, closing at $223.25. The previous worst loss was 17.3 percent on Nov. 14, 2008, according to Marketwatch.com, a decline that came when the market was imploding due to the mortgage crisis.

Strong early season snow that allowed Vail Ski Resort to open early this year may have hurt the company. While pass sales remained “relatively consistent” during the reporting period compared to the fiscal quarter immediately preceding it (25 percent growth in units sold and 15 percent growth in revenue) “the bar had drifted slightly upward in recent weeks as favorable early season weather trends unfolded across the portfolio,” KeyBanc Capital Markets analyst Brett Andress wrote.

“Our first fiscal quarter historically operates at a loss, given that our North American mountain resorts are open for ski operations during the period,” CEO Rob Katz said in a statement that accompanied the financial results.

When looking at sales declines in Utah and Northern California, analyst Brad Boyer pointed to the “presence of a new competitor”, a clear reference to Denver-based Alterra Mountain Co. and its Ikon Pass, as to the reason season pass sales “likely fell slightly below buy-side expectations”.

“We are very pleased to see double-digit revenue growth in our season pass program after a very strong record performance last year,” Katz said. He added that, excluding military passes, “we achieved solid growth in our Colorado, Destination and Whistler Blackcomb markets, while experiencing declines in both the Northern California and Utah markets.”

Vail Resorts Inc. reported a net loss of $107.8 million for the period Aug. 1 to Oct. 31, compared to a loss of $28.4 million over the same span last year.

“Vail’s recent acquisitions and new season-pass offerings aren’t enough to sustain demand and will likely hurt its fiscal 2019 growth prospects,” Bloomberg Analytics wrote in response the Vail’s release, referencing summer buys that included Crested Butte and three other U.S. resorts.

The company’s geographic diversity means its long-term outlook remains strong regardless of how its stock fared Friday, according to Bloomberg Analytics:

“Its global resort network provides alternative destination options and is an added benefit to pass holders,” Bloomberg wrote. “Recent acquisitions further enhance the season passes’ value, helping Vail to secure its position as North America’s leading ski-resort operator.”

By the numbers:
17.85% – biggest single-day stock price loss in the company’s history on Friday
17.3% – previous biggest stock-price loss in Nov 2008
$107.8-million – net loss between 8/1 – 10/31, compared to $28.4-million the previous year
$175-million – capital improvement plans for 2019
925,000 – Epic Passes the company expects to sell this year
750,000 – Epic Passes sold last year
+21% – North American pass sales are up 21% (although the introduction of a $99 military pass meant this volume increase didn’t translate directly to a revenue increase. That was only a 13% increase)
$50-million – share buyback during the quarter
$1.47 – quarterly dividend paid to shareholders

 

[marzNC]

publicly traded companies, like Vail and Alterra, is to their shareholders

Vail Resorts is a public company. Alterra is not.

Alterra is a big player in the tourism industry at this point but currently a private company owned by KSL and HCC (Crown family). HCC also owns Aspen Ski Co. separately. Of course, Alterra going public could be a goal for the near future.

 

[ski diva]

Still, that doesn’t change my concern about Vail.

 

[Christy]

Wait, so Vail always loses money early season, and since this early season was so early they lost a lot of money? Why the race to open so early then with losses so big?