Is the ski resort model dead?

[Geoff]

I'm talking about these specific places in the Alps and not France resorts in general. Chamonix, Val d'Isère pre-date the arrival of tourists in their valleys as Les Arcs and Val Thorens are not. Places like Chamonix and St.Anton have a greater proportion of local residents versus transient tourists or unoccupied (fulltime) condos and chalets. Locals can live in Chamonix, however locals in Whistler rarely have the money to stay in Whistler or without sharing a place, most locals are forced to stay in Pemberton.

Again, Val d'Isere has a few structures that pre-date the ski resort. I had a really nice raclette dinner in one of 'em some number of years ago.

Your assertion about Chamonix just doesn't hold water. A trivial Google turns up all kinds of information to the contrary. Here is an example:
http://www.natives.co.uk/do/ecco.py/vie ... temid=1209

All real estate is priced according to supply and demand. Most ski resorts have a scarsity of land since they're rimmed by mountains. Chamonix is no different from Whistler.

 

[Geoff]

Geoff, you'll need to back up with some facts that the shares are only going to local vacation home owners. I know a few folks who have bought shares and they are either not vacation home owners at Magic, or if they are local vacation home owners, it is because they have truly made Magic Mountain their primary ski mountain, love the place, and are not buying shares for real estate purposes but rather because of their love for the mountain.

I fail to see the difference. If you have bought real estate in Londonderry to ski Magic as your home mountain, you're going to shell out the $3K to try to protect your lifestyle investment. You're probably not looking forward to the 30 minute drive to groomers at Stratton or Okemo. It's not like Magic is getting MRA people from west of the Mississippi to buy shares.

I read through all the Magic share stuff. It's not structured anything like the Mad River Glen co-op. It's non-voting shares with minority ownership.

 

[soulskier]

Whistler does two million skier visits. As a world class destination resort, their dollar per day yield per customer is quite high. Ignoring any real estate development, they have to do at least $200 million. That's not a bad business to buy in to.

I would disagree and point out that if they were a good business, they wouldn't be in debt $300 million.

And as a private investor, I would never invest in an offering designed to pay back debt. IMO, that's just to get back to even.

 

[soulskier]

I do agree with you that it'd be very, very hard to do the proposed MRA model anywhere in the east (except maybe the chic chocs or something where snowmaking would be needed less?).

Intended with no disrespect, the East is not currently on MRA's radar. Reliable and copious snowfall and big mountain terrain are prerequisites that the East does not offer.

 

[soulskier]

IMHO, Soulskier's idea of how a ski area should work is a question of scale. It is feasible at small/smaller mountains, and maybe a few medium sized mountains close to large urban areas, but it won't work for most large areas.

The answer is easy. Small on infrastructure, big on mountain

 

[riverc0il]

I fail to see the difference. If you have bought real estate in Londonderry to ski Magic as your home mountain, you're going to shell out the $3K to try to protect your lifestyle investment.

That is not what you wrote above....

The shares are mostly being sold to local vacation home owners

Local vacation home owners are NOT the same as remote die hard skiers driving up from out of state. Of course the local skier is going to protect their investment and of course they are the one's buying shares. I just want to see some data backing up your claim that the shares are mostly being sold to local vacation home owners because that is not what I have seen though I am sure the limited number of slope side owners probably have bought shares... it would be far from the majority. There ain't much real estate at Magic.

 

[Geoff]

I fail to see the difference. If you have bought real estate in Londonderry to ski Magic as your home mountain, you're going to shell out the $3K to try to protect your lifestyle investment.

That is not what you wrote above....

The shares are mostly being sold to local vacation home owners

Local vacation home owners are NOT the same as remote die hard skiers driving up from out of state. Of course the local skier is going to protect their investment and of course they are the one's buying shares. I just want to see some data backing up your claim that the shares are mostly being sold to local vacation home owners because that is not what I have seen though I am sure the limited number of slope side owners probably have bought shares... it would be far from the majority. There ain't much real estate at Magic.

Nonsense. There are close to 50 houses off Magic Circle. A couple of hundred within 2 or 3 miles of Magic. Those are the people with the most to lose if Magic vaporises.

 

[Geoff]

Whistler does two million skier visits. As a world class destination resort, their dollar per day yield per customer is quite high. Ignoring any real estate development, they have to do at least $200 million. That's not a bad business to buy in to.

I would disagree and point out that if they were a good business, they wouldn't be in debt $300 million.

And as a private investor, I would never invest in an offering designed to pay back debt. IMO, that's just to get back to even.

...then you would have missed out on some of the greatest IPOs of all time. Apple Computer. Microsoft. Intel. Startups that go public covert debt into equity.

 

[soulskier]

Whistler does two million skier visits. As a world class destination resort, their dollar per day yield per customer is quite high. Ignoring any real estate development, they have to do at least $200 million. That's not a bad business to buy in to.

I would disagree and point out that if they were a good business, they wouldn't be in debt $300 million.

And as a private investor, I would never invest in an offering designed to pay back debt. IMO, that's just to get back to even.

...then you would have missed out on some of the greatest IPOs of all time. Apple Computer. Microsoft. Intel. Startups that go public covert debt into equity.

But weren't these companies startups at the time, not a company that needed 300 million to repay debt?

 

[Marc_C]

I would disagree and point out that if they were a good business, they wouldn't be in debt $300 million.

This is so shockingly naive it and pretty much everything else soulskier wrote is no longer worth the comments.

 

[soulskier]

I would disagree and point out that if they were a good business, they wouldn't be in debt $300 million.

This is so shockingly naive it and pretty much everything else soulskier wrote is no longer worth the comments.

Let me put it another way. For many of us, skiing is a lifestyle first, a sport second, and a business third. IMO, to hear a number like 300 Million involved with a ski area has lost touch with what's important, sliding on the snow.

 

[Mike Bernstein]

I would disagree and point out that if they were a good business, they wouldn't be in debt $300 million.

This is so shockingly naive it and pretty much everything else soulskier wrote is no longer worth the comments.

Let me put it another way. For many of us, skiing is a lifestyle first, a sport second, and a business third. IMO, to hear a number like 300 Million involved with a ski area has lost touch with what's important, sliding on the snow.

That's a lot different than your original statement, which was in fact incredibly naive. W/B is a fantastic business. The problem is that the private equity fund which bought its corporate parent paid too high of a price and funded everything with expensive debt. None of that has anything to do with W/B's underlying strength as a business.

 

[rfarren]

Let me put it another way. For many of us, skiing is a lifestyle first, a sport second, and a business third. IMO, to hear a number like 300 Million involved with a ski area has lost touch with what's important, sliding on the snow.

How so? Whistler-Blackcomb is by far the largest ski area in North America. It is close to a large metropolitan area, and is a global destination. It has hosted olympics, and is thriving. We're not talking about two lifts here that crawl and take 60 minutes to reach the peak of either mountain, we're talking about a huge area!!! It needs infrastructure to support its skiers.

Secondly, I understand skiing to you is a lifestyle, but that is an obnoxious statement. That statement is elitest and excludes people like me, who love skiing, but can ill afford to live in the mountains and therefore, must vacation in order to get their days in. Sometimes, we people like to ski large mountains and relax in pedestrian towns and stroll the streets with our families, sometimes we like hotels with good restaurants and outdoor hottubs, sometimes we like ski-in ski-out condos with nice amenities. Seriously....

Thirdly, your statement that skiing is a business third reflects the obvious fact that you have no business ever running a ski area. Ski areas are businesses. They have bottom lines. They have operating managers who have to take in account factors such as, how many people need to operate facilities, how much should each be paid, when should we open, when should we close, how many ski patrol do we need per visitor, avy control, insurance, how much should on mountain food cost, where do we get that food... the list goes on probably in ways you haven't even thought of, and yet your still espousing this naive idea that big mountains can operate on a shoe string budget. Have you ever thought that perhaps the larger the mountain the more staff is needed, and the large your operating budget becomes? Have you ever thought that the larger the mountain the more interest the skiing public will be in skiing it? Do you realize that if the skiing public comes to your mountain, and your facilities are awful they won't return, and you will go bankrupt.... skiing is business.

 

[Geoff]

Secondly, I understand skiing to you is a lifestyle, but that is an obnoxious statement. That statement is elitest and excludes people like me, who love skiing, but can ill afford to live in the mountains and therefore, must vacation in order to get their days in. Sometimes, we people like to ski large mountains and relax in pedestrian towns and stroll the streets with our families, sometimes we like hotels with good restaurants and outdoor hottubs, sometimes we like ski-in ski-out condos with nice amenities. Seriously....

...or it's somebody who wants others to subsidize his lifestyle.

The whole thing is moot. You can already go to places like Monarch and find bare bones. Spend your money at those places so they don't go under.

 

[soulskier]

Let me put it another way. For many of us, skiing is a lifestyle first, a sport second, and a business third. IMO, to hear a number like 300 Million involved with a ski area has lost touch with what's important, sliding on the snow.

How so? Whistler-Blackcomb is by far the largest ski area in North America. It is close to a large metropolitan area, and is a global destination. It has hosted olympics, and is thriving. We're not talking about two lifts here that crawl and take 60 minutes to reach the peak of either mountain, we're talking about a huge area!!! It needs infrastructure to support its skiers.

It is my understanding that after the Olympics, Whistler is now at crossroads. Their current status quo will not be sustainable for the future. They have to either continue to expand, or downsize. Bigger doesn't always mean better.

Secondly, I understand skiing to you is a lifestyle, but that is an obnoxious statement. That statement is elitest and excludes people like me, who love skiing, but can ill afford to live in the mountains and therefore, must vacation in order to get their days in. Sometimes, we people like to ski large mountains and relax in pedestrian towns and stroll the streets with our families, sometimes we like hotels with good restaurants and outdoor hottubs, sometimes we like ski-in ski-out condos with nice amenities. Seriously....

The statement was not meant to be elistist. In fact, my personal belief of being bare bones and focused on the skiing experience, not all the ammenties that you list above, could fall under the dirt bag category for some.

At the end of the day, there are many different types of people looking for many different things in their ski and snowboarding experience.

Thirdly, your statement that skiing is a business third reflects the obvious fact that you have no business ever running a ski area. Ski areas are businesses. They have bottom lines. They have operating managers who have to take in account factors such as, how many people need to operate facilities, how much should each be paid, when should we open, when should we close, how many ski patrol do we need per visitor, avy control, insurance, how much should on mountain food cost, where do we get that food... the list goes on probably in ways you haven't even thought of, and yet your still espousing this naive idea that big mountains can operate on a shoe string budget. Have you ever thought that perhaps the larger the mountain the more staff is needed, and the large your operating budget becomes? Have you ever thought that the larger the mountain the more interest the skiing public will be in skiing it? Do you realize that if the skiing public comes to your mountain, and your facilities are awful they won't return, and you will go bankrupt.... skiing is business.

I have been involved in the ski industry since the 1980's. I am fully aware a ski area is a business. But I believe a ski area should be values based, instead of profit driven. I believe that if the ski area is run with the rider's best interest in mind, they will return as well as tell their friends, and hence there is the profit.

Look at Ben and Jerry's Ice Cream (before they sold out). Instead of spending 8% of marketing, they spent that same 8% on social programs. In return, people bought their ice cream because they wanted to support what Ben and Jerry's was doing.

 

[rfarren]

Look at Ben and Jerry's Ice Cream (before they sold out). Instead of spending 8% of marketing, they spent that same 8% on social programs. In return, people bought their ice cream because they wanted to support what Ben and Jerry's was doing.

I doubt that's why the majority of people who bought Ben and Jerry's bought it. It was a good product, and it's ice-cream what's there to think of. How are they doing now? Are they suffering? Are people not buying it out of protest? I doubt it...(although I don't know the details of their business)

But I believe a ski area should be values based, instead of profit driven. I believe that if the ski area is run with the rider's best interest in mind, they will return as well as tell their friends, and hence there is the profit.

How are condos, faster lifts, nice on mountain restaurants, and pedestrians villages not in the rider's best interest? Not everyone has the same "values" as you. Clearly, profit isn't everything but let's not be overly idealistic about what "most" people want in a ski area.

 

[Geoff]

Look at Ben and Jerry's Ice Cream (before they sold out). Instead of spending 8% of marketing, they spent that same 8% on social programs. In return, people bought their ice cream because they wanted to support what Ben and Jerry's was doing.

I doubt that's why the majority of people who bought Ben and Jerry's bought it. It was a good product, and it's ice-cream what's there to think of. How are they doing now? Are they suffering? Are people not buying it out of protest? I doubt it...(although I don't know the details of their business)

People bought Ben and Jerry's ice cream because it was better than anything else on the market. I used to spend money there back when they were in the gas station in Burlington. At the time, ice cream in the grocery store was lousy. The whole Vermont hippy thing was clever branding that is still being used even though it's owned by the large food corporation. Besides, this is a rediculous comparison. Ben and Jerry's is a huge corporate brand. If it weren't profitable, it would not exist.

But I believe a ski area should be values based, instead of profit driven. I believe that if the ski area is run with the rider's best interest in mind, they will return as well as tell their friends, and hence there is the profit.

How are condos, faster lifts, nice on mountain restaurants, and pedestrians villages not in the rider's best interest? Not everyone has the same "values" as you. Clearly, profit isn't everything but let's not be overly idealistic about what "most" people want in a ski area.

soulskier is treading awfully close to pinko commie fag territory.

There's this magical feedback loop with profit-oriented service-oriented corporations. If your customers like what you're selling, they will buy more of it and tell their friends. If your product sucks, you go out of business. If you look at where the ski industry is today, the sweet spot is high speed lifts, groomed intermediate corduroy, ski-in/ski-out lodging, and lots of non-skiing activities right there. Disney with snow. That's not what I seek out but it's where all the tourist money is going. I'm not going to condemn businesses for offering the product their customers want.

 

[Marc_C]

soulskier is treading awfully close to pinko commie fag territory.

Nah. Just starry-eyed idealism with a steadfast refusal to accept the harsh realities of the business and a seeming willingness to impose his values as the "proper" values for a ski area.

 

[riverc0il]

Perhaps instead of looking at the resort model as dead, perhaps the question should be is it evolving/changing and into what? What are the big resorts doing in Vermont right now? Building huge honking hotels and timeshares slopeside. Not in the traditional condo sprawl but huge honking slopeside buildings (Stowe, Sugarbush, Jay). They are doing away with selling real estate and getting in on the game with full control. I bet we continue to see more of that.

Here is a question: would rider visits and total riders have increased without the invention and deployment of high speed lifts, increased snow making, expanded grooming, and resort amenities? Without the condo build out? Resorts made skiing into a lifestyle. A very different lifestyle than most folks on this forum enjoy, but a lifestyle nonetheless that gained and retained riders and market share. As someone else point out in this thread already, ski areas are in competition with other resort based lifestyle operations such as Disney, golf courses, etc.

The fact is that the overwhelming majority of sliders want something completely different than the hardcore. That the vacationing family and slopeside lifestyle subsidizes up cheap skate dirtbags that want less grooming, more natural snow, harder terrain, natural contours, and a ski area instead of a resort. Sure, you have a few oasises in various regions that do operate sticking to the core skiers and riders or don't go after the vacationing crowd with as much zeal. But those areas are very few and far between because the market can not sustain many of these niche areas.

MRG is one of those areas. But do you know what sustains MRG? Not just hardcore skiers. Families. Take away the family connections at Mad River and I am not sure it would be viable. Families are what keeps the entire industry going. They spend the most money for the fewest amount of trips. They buy the most food in the cafeterias while spending the least amount of time on the slopes. They pass on the activity and ingrain a love of sliding as my folks did for me. That is why Jay built an ice rink and a waterpark. Take care of the families and the money will follow.

Resorts aren't dead. They are just going to respond to customer demands, innovate with new services, reduce overhead and unnecessary expenses, and do anything that will likely result in a better return on investment. Just like other business in a tough economy. Can resorts change, be profitable, and put values first? Sure. Who's values, though? If I was operating a business, I would look at the values of my highest margin customers and my most frequent, numerous, and loyal customers. Unfortunately, you can't please everyone and those different customers often want different things.... so you pick the ones that are the most profitable if you are running a business.

 

[soulskier]

Since this thread is talking about the ski resort model, check out what's going on over at Berkshire East.
http://espn.go.com/action/blog?sport=fr ... st=5663794

They will be the second US Ski area to install a wind turbine, estimated ROI 7-9 years. They will be connected to the grid and buy back the power they consume. The Asst GM says they either get a check or a bill each month.

I predict we will see more ski resorts/areas investing into clean energy to reduce operating costs and/or create another revenue stream.