California ski resorts are struggling to make ends meet right now. They’ve been struggling to make ends meet for the past 3 winters. In 2011/12 Tahoe received 80% of average snowfall. In 2012/13, Tahoe received 50% of average snowfall. Thus far in 2013/14, Tahoe has received less than 40% of average snowfall.
These low snowfall numbers have translated into very low skier visits and very low revenue for California ski resorts (Mammoth filed for bankruptcy protection in 2012). This would be a great time for big companies to buy up California ski resorts. In the past few years, Vail has bought up Northstar, Kirkwood, and Heavenly. Who will get bought up next?
There has been a lot of talk of Vail buying Squaw. Some say KSL’s job was simply to fix Squaw up to be sold to Vail. We’ll see…
Business Week just wrote an interesting piece about western ski resorts getting bought up by big companies. Here’s an excerpt:
Ski Resorts Seen as Buyout Targets Amid U.S. West Drought
The same winter that brought blizzards and the polar vortex to the East Coast has left ski destinations in California and Nevada largely dry. Resorts are making do with the least snow in more than four decades and a 50 percent drop in attendance in some areas. Smaller, independent owners may struggle to hold out for a better season next year, said Smedes Rose, an analyst at Evercore Partners Inc. in New York.
“It wouldn’t be out of the range of possibilities that some of the resorts would become capital-constrained, and that we will see some consolidation because of that,” he said.
After three years with little precipitation, California Governor Jerry Brown this month declared a drought emergency. Snowfall at the 25 ski resorts in the most-populous U.S. state is the lowest since the 1971-72 season, according to the California Ski Industry Association.
The lack of snow is putting the toughest strain on the western states’ smaller, independent resorts, according to Rose. That may allow bigger, more diversified operators such as Vail Resorts Inc. (MTN:US) to snap up their struggling rivals, he said.
“We are always looking,” Robert Katz, chief executive officer of Vail Resorts, said in a phone interview. “Seasons like this can be an opportunity, but acquisitions in the ski industry are often the result of long-term discussions. Owners are usually very passionate about their business. Negotiations can take a long time. It’s not like a hotel or an office.”
Read the full article here:
People are happy with the Vail strategy? Can’t believe this! I just can see bad services bad organization budget budget budget and who cares about quality and equal redistribution of the incomes…
Vail resorts are just full of j1 visas. Unqualified guys paid 8 dollars every hours that fuck the jobs to the qualified americans.
Vail policy are one of the reason because the “real quality” in the ski industry in north america not exist.
And this is a real shame!!!!
I am curious to see what the Epic passes will be priced at after April… 3 years in a row with lackluster snowfall should dictate a lower price IMHO but that’s my opinion and yet I am wrong almost every year! Think about it this way …. I recently read that attendance in Tahoe resorts are down by 20 to 30 percent from 4 years ago. You have to start thinking about Bay Area kids that are coming to tahoe less and less every year which mean they are not connecting with snow sports.. When that disconnect occurs its a lost generation essentially that you won’t get back even if you get an above normal snowfall season…. I would love to see the demographic data regarding attendance in Tahoe.. I see less and less families and especially teens; Vail and KSL need to pay close attention to that retention rate because if the kids stop coming they disconnect with the snow and only a few of them will come back once they are older and can afford it. The surfing biz is looking better everyday!
My guess is Sugar Bowl’s next in the crosshairs. I think KSL has deep enough pockets and a big enough development plan to hold down the fort. With the JMA relationship, connecting Homewood –> Alpine –> Squaw –> Sugar Bowl could be an interesting plan a half century down the road, to the chagrin of backcountriers and environmentalists.
It was the town of Mammoth that filed for Ch 9 Bankruptcy, not the mountain, and it was due to a frivolous lawsuit from a developer who tried to develop near the airport. The FAA wouldn’t allow the development, and the town got blamed.
No way on Sugar Bowl, old school investors.
I think they will hold on for several decades.
You are right on Mammoth, bummer eh?
Sierra at Tahoe will be the next. Anyone….
Then its game on with White Wolf.
Pfft. Vail is not buying Squaw.
In addition to Squaw and Alpine, Vail should also consider buying Sugar Bowl and Sierra at Tahoe. One pass for all those Tahoe resorts would be awesome, and it would probably drive a lot of season pass sales. On the flip side though, that would probably put a lot of hurt on the smaller operators like Diamond Peak, Boreal, Donner, Homewood, etc.
So many resorts under one ownership group would be a monopoly. It didn’t work for Les Otten.
Diamond Peak is owned by IVGID (town). Homewood is owned by sucky developers JMA of SF.
JMA wants to develop a huge ugly village in the parking lot. They stole somebody’s playbook.
Boreal/Soda Spring owned by former giant Powder Corp. May be the best run money maker.
What happened after the 2002 games Powder Corp? Sierra at Tahoe, somebody buy me!
So you are left with only one ski area who still ha the real “Soul of Skiing” that’s right…
Donner Ski Ranch! Thanks to people like Norm Saylor there is still a little bit of flavor
left in this silly sport. Do your soul a favor and spend a day and a few bucks on good
old DSR. See what a real ski lodge used to be and smell like. No Joke! Slow chairs and
great views will invigorate your love of skiing. Just need some snow and they can open.
Vail, KSL, JMA go suck an egg!
Alright, Sugar Bowl is OK too. Smart investors and cool people
like the late Warren Hellman.
Vail, if they do purchase Squaw as purportedly rumored, will F Squaw up far worse than KSL. They have more than enough leverage and capital to overdevelop the crap out of everything as well as the experience.
KSL is fledgling in this area compared to Vail as far as ski resorts go. Vail will bring in more of their Colorado insiders to replace more longtime local employees here.
For all the crap Andy Wirth and KSL gets, some deserved, some not, they are at least figuring out how to somewhat appease the local base. Perhaps if a deal is done, Vail may gain financial control with KSL having a remaining interest in both Squaw and A.M. with upper management in place for a while running ops.
Seems like every time a resort changes hands, there is always unnecessary operational changes as the new management team tries to figure out a way to be profitable. Just think of the absurd changes that continually have happened to Alpine during the changeover to Powder Corp, then JMA now KSL. They still are having trouble figuring out the mix of what is true to Alpine’s legacy and moving forward with profitability targets. A good example is the constant changes to the terrain park features at Alpine, do they or don’t they put the features on Dancefloor, what is the identity of Alpine going to be for the future?
The corporate chuckleheads are the so called experts yet they are still trying to figure it out, WTF? Over.
Kirkwood and Squawlpine on the same pass? Yes please.
Anything VailCorp would do to Squaw couldn’t be worse than what KSL is doing. They have handled Kirkwood pretty well.
Unless you’re an employee when Vail takes over. Then things are bad. Such an awful, soulless company to be taken over by.