Big hills, big business
Apr 13, 2017 | 5089 views | 0 0 comments | 399 399 recommendations | email to a friend | print
News this week of the pending sale of Intrawest Holdings certainly had a ripple effect through southern Vermont and the valley. The deal was pegged at $1.6 billion. If that number does nothing else, it should make the casual observer realize that the ski and winter resort industry is big business.

As part of that sale, nearby Stratton Mountain will now be a part of an even larger conglomerate that includes Aspen Mountain, Squaw Valley, Steamboat Springs, and other resorts spread across the United States and Canada. This comes less than three months after Vail Resorts pledged to purchase Stowe Mountain Resort, and a little more than a year after Peak Resorts added Hunter Mountain to its stable of ski areas, which includes Mount Snow.

These deals continue a consolidation trend that has been arcing upward for the past 40 years. While multiple resort ownership was not unheard of in the 1970s, it also wasn’t the norm to have large business conglomerates own multiple ski resorts. That began to change in the late 1970s, in large part spurred by Killington’s purchase of Sunday River and Mount Snow resorts. A decade later, the owners of Killington and Mount Snow had formed a publicly-traded company, S-K-I Ltd., and the genie was out of the bottle.

By the mid ‘90s, Les Otten had created the American Skiing Company, proclaimed it the largest ski area operator in the country, and promptly over-extended the company’s ability to pay for its purchases, which included S-K-I (Mount Snow and Haystack) and a host of other resorts. While the woes and eventual collapse of ASC are a cautionary tale for another time, those problems didn’t deter others in the winter resort industry from continuing to look for opportunities to expand. If anything, it merely stoked the engines of industry to look for more opportunities. Which, in many ways, brings us back to the present.

The Stratton and Stowe sales have put Vermont back in the spotlight. That should be good for all of the resorts in the state. It also means investment dollars should be coming to Stratton from the new owners, as they look to upgrade facilities, generate skier traffic, and build market share. That effort should rub off on the local economy as well. Stratton is a key player in the economy of southern Vermont. New ownership, committed to building the brand, should bring more business to the region.

How all of this consolidation plays out for the consumer remains to be seen. No doubt more and more multiple-mountain ski passes will be available, which should be good for skiers and riders who can commit multiple days or weeks to pursue their passion. But it could mean higher single-day ticket prices and more expensive ancillary products, like food and beverages, due to a dilution of competition. History is rife with good and bad examples of consolidation, and only time will tell who really benefits from all of these mergers.

Speaking of history, the ski industry has come a long way from those pioneering visionaries who were set on developing one or two mountains in their own image. Think Walter Shoenknecht at Mount Snow or Pres Smith at Killington. They were founders driven by their love for skiing and their desire to build ski resorts.

Which, interestingly, brings us to one of the few ski resorts in the country that is bucking the consolidation trend. We’re talking, of course, about the Hermitage Club at Haystack Mountain. At this point, it is a company driven in many ways by the singular vision of its owner, Jim Barnes. It is kind of a throwback to those early days of resort development. What does its future hold? Will it become a target in the takeover game? Granted, it’s a small player. But it’s certainly become a jewel in terms of small mountains and should have appeal to someone looking for something unique.

While we’re speculating, is Peak Resorts a target for purchase? Given what’s happened in the past year, nothing appears to be off the table when it comes to resort mergers and acquisitions.

We should point out that in the case of Peak Resorts or the Hermitage Club, we’ve heard nothing to say either are on the market, or anything is imminent. But given the current trend, and if the price were right, why not?

What fate the future holds for any of the local resorts remains to be seen. One thing that is certain is that money, and resorts, will continue to change hands in unexpected and interesting ways.
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