Liftopia forced into bankruptcy

[Tricia]

On June 2, 2020, Liftopia was forced into involuntary bankruptcy.
I don't know details but wonder if this is some of the fallout from the early season closures due to COVID-19, but that is speculation on my part.

As seen at BusinessBankruptcies.com

 

[raytseng]

There was a blurb over at snowbrains:

Liftopia Facing Involuntary Bankruptcy for $3-Million Owed to Alterra, Aspen Skiing Co, and Others - SnowBrains

Popular lift ticket discount site Liftopia is allegedly facing Chapter 11 Involuntary Bankruptcy, according to businessbankruptcies.com,

snowbrains.com

Says they owe $3M to MountainColletive (Aspen Ski Co) and Alterra among others for failure to pay commercial fees.
I don't understand the business of how that came to pass that they owe $3M, but probably means Liftopia was operating via Debt to begin with.

 

[James]

Their problems were illustrated by naming Magic the #1 ski area in North America.
Kidding. Sort of.

 

[Ski&ride]

First of the dominos?

 

[tch]

It felt like something more than Covid was up to me. Five years ago, I depended on Liftopia to get cheap tix all over Utah while I was on extended vacation there. Two years ago, most of the resorts were associated with Ikon and those that weren't (Powder Mt., Snowbasin) didn't have tickets available on Liftopia but were offering bargains through their own online outlets. Same story on the east coast: most areas I was interested offered Liftopia-esque deals online on their own websites if you bought ahead of time. Last year, I looked at Liftopia several times, but could never find a ticket for the place/day I wanted to go.

 

[Ski&ride]

It felt like something more than Covid was up to me. Five years ago, I depended on Liftopia to get cheap tix all over Utah while I was on extended vacation there. Two years ago, most of the resorts were associated with Ikon and those that weren't (Powder Mt., Snowbasin) didn't have tickets available on Liftopia but were offering bargains through their own online outlets. Same story on the east coast: most areas I was interested offered Liftopia-esque deals online on their own websites if you bought ahead of time. Last year, I looked at Liftopia several times, but could never find a ticket for the place/day I wanted to go.

I suspect their business got undercut by the forming of Alterra, followed by the Epic purchase of the entire PEAK portfolio. They were already on shaky ground at the beginning of the season. Then Covid hit and the season got cut short...

Shoulder and tail end season is when discount ticket hunting heats up. But with all resorts closing on March 15, that really took away a good chunk of the “discount season”.

I confess I used to be a regular liftopia user. But I haven’t used it much for the last few years once Vail and Alterra started including Northeast mountains. Not point in paying when I can ski “for free”. Last season, Vail had such a large collection of resorts in the northeast I didn’t have any use for liftopia at all. Even without Covid, a lot of people like me would be leaving liftopia behind.

 

[mdf]

most areas I was interested offered Liftopia-esque deals online on their own websites

Originally Mountain Collective purchases were run by Liftopia. I don't know when they went in-house, but there's another big chunk of business gone.

 

[BS Slarver]

Think they were on the skids and would have fallen even without C19. With Ikon being the the new sheriff in town and other collective pass offerings they just became Irrelevant for most skiers.

 

[Tricia]

most areas I was interested offered Liftopia-esque deals online on their own websites if you bought ahead of time.

That's what I find if I hit something not on my passes.
When I have friends in town who want to hit Mt Rose with me, I choose days with deals because they are still better than my buddy pass.
Example: On women's day, a woman can buy a lift ticket for 49.00 which includes a 4 hr group lesson.
Tuesdays are Two for Tuesdays. If you only have one person, you can usually find someone in line who will do it with you.

 

[Andy Mink]

most areas I was interested offered Liftopia-esque deals online on their own websites if you bought ahead of time

I found that at Lee Canyon outside Vegas and Arizona Snowbowl. The earlier you bought, the cheaper the ticket.

 

[Ski&ride]

The earlier you bought, the cheaper the ticket.

Unlike season pass, liftopia tickets are date specific.

So yes, buying early is cheaper. But you have to be comfortable skiing ALL conditions when that specific date rolls around.

 

[Andy Mink]

Unlike season pass, liftopia tickets are date specific.

So yes, buying early is cheaper. But you have to be comfortable skiing ALL conditions when that specific date rolls around.

Correct. Even a few days out will save a few bucks, and you can check the weather, for what it's worth. I didn't buy online for AZSB because I wasn't 100% sure when or if I'd be there.

 

[fatbob]

I thought Liftopia essentially administered Mountain Collective therefore they were a pet Aspen operation?

Can see they may have had too many refunds/ no late season cashflow to make to foot the bills they owed to resort creditors though. Won't

 

[raytseng]

Even with the Covid season closing, or business sales dwindling or even refunds I don't see how the slowdown leads to the $3M owed to other resort companies versus them just running their own cash out. I would imagine any refunds they would pass through to the resorts, because ultimately the Resort couldn't fulfill on that ticket, not Liftopia.

There must have been some business partnership with the Ski Cos where Liftopia took this liability and wasn't able to make it back, like a startup loan or something.

Maybe Alterra/SkiCo was already floating them and letting them be pastdue for tickets issued for several months before shutdown even happened, but that means Liftopia has already been using months of ticketsales cash as a slushfund for operations rather then paying for the tickets they resold. This seems really bad and they deserve to go bankrupt for that.

The only way I can imagine them getting $3m in debt to the resorts if they aren't dipping and using their ticketmoney; maybe somehow they were on the hook to prebuy/prepay a minimum amount of tickets or minimum partnership fee, no matter the situation, and couldn't get anything back from the resorts for the unsold tickets. Still to have this grow to $3m, something doesn't add up...

 

[Dakine]

As Warren Buffet says..."You don't know who is swimming naked until the tide goes out."
I'm currently out $1300 for a pair of skis that I ordered but don't seem to exist.

 

[fatbob]

Even with the Covid season closing, or business sales dwindling or even refunds I don't see how the slowdown leads to the $3M owed to other resort companies versus them just running their own cash out. I would imagine any refunds they would pass through to the resorts, because ultimately the Resort couldn't fulfill on that ticket, not Liftopia.

There must have been some business partnership with the Ski Cos where Liftopia took this liability and wasn't able to make it back, like a startup loan or something.

I guess probably - I assumed Aspen were in them for equity but maybe they had debt financed them or structured for some fee kickback. Coulda been kinda smart - taking a slice of action on resorts you didn't even have a partnership with. Anyone know what LIftopia made in the good years? - wouldn't surprise me as a West coast disrupter if it's never been anything.

 

[raytseng]

I guess probably - I assumed Aspen were in them for equity but maybe they had debt financed them or structured for some fee kickback. Coulda been kinda smart - taking a slice of action on resorts you didn't even have a partnership with. Anyone know what LIftopia made in the good years? - wouldn't surprise me as a West coast disrupter if it's never been anything.

https://www.crunchbase.com/organization/liftopia

Burned through $7.3 of funding money + this $3million they owe for ?, so they made a negative $10.3M over their history, and likely never profitable

 

[SkiMcP]

Couple of quick notes:

involuntary bankruptcies are not all that common and Liftopia is fighting this one. Their argument looks compelling but the creditors haven't weighed in yet so take that with a grain of salt.

Also, many of you who used to buy tickets through Liftopia but are now buying from the resort are probably still using Liftopia. Its happy to sell you tickets, lodging, gear etc. but its real business model is selling its underlying software product for branding by small to medium ski areas and similar businesses. So, when we buy a ticket on line from "Our fave indy mtn" we are more likely than not buying through a Liftopia product with a different brand name and logo slapped on it. The Liftopia pleadings claim more than 120 customers. That is a lot of ski areas even presuming some of the customers are in other businesses.

It is somewhat curious that this was filed as an involuntary 11 (reorganization) and not a 7 (liquidation). If you are a creditor that thinks the business can't survive, you would normally file a 7 in the hopes having the assets sold off and recouping some of your investment. An 11 leaves the management you presumably don't trust (and may even believe to be incompetent or worse) in charge of running the bankruptcy. Seems like there is some sort of story here. Whether or not it is actually interesting or if we will even ever hear it remains to be seen.

 

[Mike King]

Ski resorts push lift-ticket seller Liftopia toward bankruptcy, revealing deep impacts of coronavirus closures

Aspen Skiing Co., Alterra Mountain Co., Arapahoe Basin and Canada’s Cypress Bowl are asking a federal bankruptcy judge to force online lift ticket seller Liftopia into bankruptcy, saying the California-based company owes the resorts more than $2 million. Liftopia, one of the first companies in...

coloradosun.com

 

[fatbob]

^ Hmm that doesn't paint a very rosy picture of Liftopia as the innocents in the room. Plus hacking off Aspen and Alterra and Mtn Collective suppliers/customers doesn't sound like a very good way to get future investors on board.......