Vail's Latest Acquisitions: Okemo, Sunapee, Crested Butte, and Stevens Pass

[Mike Thomas]

And a blanket!

I think you mean towel.

 

[Philpug]

I think you mean towel.

I think I need to take the day off from the computer.

 

[David Chaus]

More important than the towel, is a device with friendly letters that reads “Don’t Panic.”

 

[Doug Briggs]

I ski Breckenridge and the skiing is great. Great new lifts. Great new terrain. I'll admit I haven't experienced a take-over ala PC, but since I don't eat, sleep or drink VR's products, my experience is based solely on their commitment to opening up new terrain and lifts. I think they've run out of terrain opportunities here so maybe they'll be working to open up terrain at your favorite former non-VR resort. Just a wild shot in the dark.

I'm glad that I can ski unlimited at CB and that my 10 bonus days on my Epic Local pass will get me to WB.

 

[Wasatchman]

Bummer. This kind of consolidation is ultimately not good for the consumer. Vail and Alterra having a chokehold on the entire industry means huge pricing power for them.

All I can do is buy more Vail shares as I shake my head at where this is all heading for the consumer.

 

[Doug Briggs]

Bummer. This kind of consolidation is ultimately not good for the consumer. Vail and Alterra having a chokehold on the entire industry means huge pricing power for them.

All I can do is buy more Vail shares as I shake my head at where this is all heading for the consumer.

What I'm hearing you say with your post is that this (VR expansion) is not good yet your investment strategy is saying this is great.

 

[fatbob]

You lost being cutesey local hills whenever you let PE get the stake. Somwhere along the line some places will hold out against VR and Alterra and you can rally round them or not. More likely that there will be a point where there us no strategic value to grabbing more. That's when the game goes international and becomes WAY more interesting and WAY harder.

 

[ScotsSkier]

so pretty soon, if you buy Epic pass and Ikon pass you will be covered for 90% of US resorts......

 

[fatbob]

so pretty soon, if you buy Epic pass and Ikon pass you will be covered for 90% of US resorts......

I'd argue that on a full Epic and Full Ikon you're now there on pretty much anywhere you'd thought about skiing on THE N AMERICAN roadtrip.

Which will make places like Baker and Red and Rose a bit more special.

 

[Dadskier]

And a blanket!

Don't you mean towel?

 

[Seldomski]

Vail buys resorts faster than I can ski new (to me) places.

 

[James]

The Company will purchase Triple Peaks, LLC from the Mueller family for a purchase price of $82 million, subject to certain adjustments. At closing, Triple Peaks will pay $155 million to pay off the leases that all three resorts have with Ski Resort Holdings, LLC, an affiliate of Oz Real Estate, with funds provided by Vail Resorts.

So the Muellers are getting out of the biz. The failure to procure Steamboat in the early 2000's was the beginning of the end. They sued ASC over backing out of the deal and won cash but not the agreed deal to purchase Steamboat. Then, on the rebound, they bought Crested Butte. Steamboat it is not in terms of the ability to make money. Some 10 yrs ago they sold off most of the properties to a REIT and leased them back. So that's the $155 million that Vail is paying so they own the whole shebang. I thought Triple Peaks just ran Sunapee and NH State owned it, but maybe the State sold it to the REIT also.

Likely, things will probably get better in terms of trail maintenance/development but honestly that bar is so low anyone could get over it.
I suppose the big changes will be in 19/20 when they fire a bunch of people and institute their layers of management teams working from a Starbucks in Breck.

 

[Stev]

 

[Doug Briggs]

...
Likely, things will probably get better in terms of trail maintenance/development but honestly that bar is so low anyone could get over it.
I suppose the big changes will be in 19/20 when they fire a bunch of people and institute their layers of management teams working from a Starbucks in Breck.

Ha ha (sarcasm). Did I miss something in Breck?

If people want to talk about overpriced product with poor attitude, I'd think Starbucks would be an easier target.

 

[Wasatchman]

What I'm hearing you say with your post is that this (VR expansion) is not good yet your investment strategy is saying this is great.

Yes, that is exactly what I am saying. Not good for the consumer or employees in the industry, but good for Vail and Alterra investors. Yes, I don't have to like what is going on to invest in it. I am putting my money where my mouth is when I say this is good for Alterra and Vail corporations (but ultimately bad for consumers/employees).

I would gladly support stricter government rules on antitrust/consolidation even if it meant hurting some of my investments. I believe we are way too lenient on regulation of corporate consolidation in my view.

 

[James]

Ha ha (sarcasm). Did I miss something in Breck?

If people want to talk about overpriced product with poor attitude, I'd think Starbucks would be an easier target.

See what happens when you live under the Death Star?

 

[Tricia]

Chalupa anyone?

 

[nay]

What is being missed here is that you, me, us, we are not Vail's customer. If we were, do you think they would have shut Epicski down? For the pennies (relative term) it cost to run the site let alone migrate it, it shows that the on line skier is not in their marketing plan. Are we too educated? Do we not buy the $18.00 burger that @quant is referring to? Do we not stay on the resort grounds? Whatever the reason is...the trend will continue.

I think the only truly “premium” customer in the market is the local skier who also travels. That’s the network both Vail and Alterra are building.

We still buy the pass, and to that extent what I’d call “sophisticated locals” (we are all online in some fashion) who discriminate based on terrain, snow conditions, day of the week, etc. are definitely anchor customers because our business is a virtual certainly for the base product (the pass) itself. None of us has to plan a major trip before we buy.

But us sophisticated locals bemoan the premium customer (unless we know him or her) along with the “people who ski” who arrive on our shores and fall off lifts and fill up parking, and that’s the variable revenue in the market.

There is absolutely no reason to chase fixed revenue except to add incremental customers, and so we’ll see day rates continue up to push ‘people who ski’ into the same buyer class as ‘skiers’.

Vail is now selling 750K Epic Passes per year. At a mix of local vs. full, that’s about a half billion dollars of revenue per year. The majority of these passes must be underutilized almost by definition, but they are as valuable as our passes that bring day pass costs down to as low as $10/day or less.

Once the ‘person who skis’ is also buying a pass, we’ve all been homogenized and the focus is on mountain ops and key adjacent lines of business.

All (most?) of us like the mountain ops investments, and sophisticated locals tend not to like the key adjacent lines of business.

Are those two things inextricably linked? Any ski area intending to stand alone will say “no”, but those places will need high skier density to survive, meaning large metro area proximity, and probably other differentiators such as a long high altitude season and quality terrain and snow.

I wonder how much Alterra has already offered Loveland. Luv is full given its limited parking, but is there a price for everything?

I hope not more than I trust not.

 

[nay]

If you’re going to mashup, include a Tardis and a sonic screwdriver. Made of Vibranium.

You also need that most precious of materials, Unobtanium.

 

[Philpug]

And Transparent Aluminium.