One year ago Intrawest opened its first resort club at the base of Blackcomb. This year it is opening a second resort club at Tremblant and another is being planned for the company's real estate development at Keystone, Colorado. "These five-star facilities are the beginning of a network of resort clubs Intrawest intends to establish in North and South America and around the Pacific Rim," the company boasts in its 1994 annual report. But resort club ownership, the 1990s adaptation of timeshare properties, is only one aspect of the new Intrawest. The Vancouver-based company — and majority owner of Blackcomb — has undergone a significant transformation over the past 18 months. "Intrawest's goal, and it is achievable, is to become the dominant player in the North American mountain resort industry of the 21st century," writes Joe Houssian, chairman, president and CEO of Intrawest, in the annual report. Early last year Intrawest announced it would sell off its urban real estate to concentrate on four-season mountain resorts. The Vancouver-based company is now rid of the majority of its non-resort real estate assets and most of those remaining are expected to be sold by the end of 1995. The company is now organized into three divisions: resort operations, resort development and resort club. The divisions are headed by Hugh Smythe, Gary Raymond and Jim Gibbons respectively. With the realignment has come a new logo, a mountain range, "symbol of strength, boldness and vision." The glow of sun on the mountain tops and the suggestion of water at their base is supposed to reflect the diversity of the four-season resorts the company operates. Intrawest, which also owns Panorama Resort in B.C., Mont Tremblant in Quebec and Stratton Mountain Resort in Vermont, now owns resorts in three of the five major North American ski areas. "Through 1995, Intrawest will seek to acquire additional major mountain resorts in the United States," Houssian writes. Despite the consolidation that has occurred in the ski industry in the last year — including the Aspen Skiing Company buying Aspen Highlands and S-K-I Limited's purchase of Waterville Valley, Sugarloaf and Haystack to add to its Killington, Mt. Snow and Bear Valley operations — no one operator controls more than four per cent of North America's annual 75 million skier visits. Intrawest believes consolidation will intensify and the industry will be dominated within a few years by relatively few players, "one of those being Intrawest." According to its annual report, the company is focusing on acquiring two types of resorts: true destination resorts and smaller regional resorts "which have a strong local following and can provide a customer base for other Intrawest-branded resorts in the network." "Creating a familiar Intrawest 'brand' is one objective of our multi-resort strategy," the report continues. "While each resort within the network will be distinctive — capturing the local flavour and the natural attributes of its geographic setting — vacationers will increasingly seek out Intrawest resorts because of the uniformly high standards of excellence identified with the company." And Intrawest is prepared to build once it acquires resorts. The company invested $65 million in resort operations in 1994 and a further $71 million in resort real estate and the resort club in the same period. Since acquiring controlling interest of Blackcomb in 1986 Intrawest has steadily expanded its resort holdings. It bought Tremblant in 1991 and has invested $173 million in the venerable ski area since then. Other recent highlights include: o March 1993 purchased Panorama for slightly more than $7 million. o October 1993 entered into a joint venture agreement with Ralston Purina (Ralston Resorts) to develop a mountain village and accommodation base for Keystone Resort in Colorado. o April 1994 opened first Intrawest Resort Ownership Corporation facility, 45 units at Blackcomb. o October 1994 acquired 100 per cent of Stratton Ski Corporation, owner and operator of Stratton Mountain Resort in Vermont. For U.S. $24.2 million (U.S. $ 11 million cash, U.S. $ 13,234,000 in bank indebtedness and other obligations). The purchase included ski area and related facilities, a 27-hole championship golf course and 22-acre golf school, sports centre, tennis centre and more than 50,000 square feet of commercial space in a village square. o 1994 founded the Intrawest Mountain Institute, "a school of higher learning, to provide imaginative sales, management and leadership programs for Intrawest people from across North America." With last year's announcement that it was concentrating on mountain resorts the company restructuring was the next logical step. "Management believes that Intrawest's new strategic direction will significantly improve shareholder value by enhancing profitability and reducing risk," the annual report states. Blackcomb is the primary example of the direction Intrawest has chosen. It controls the ski area, 19 ski shops, ski schools, food services and some hotels, as well as sizeable real estate holdings (approximately 620 units remain, expected to be developed over a four-year period) and now the resort club. "Because vacation ownership members generate year-round occupancy rates of 70 to 80 per cent, the highest of any form of resort accommodation, this translates into substantial increases in ski, golf, retail, food-and-beverage, real estate and amenities revenue for Intrawest resorts," the company states. "Almost half of Intrawest's 1994 resort revenue was derived from non-ski ticket items and this percentage is expected to increase as retail and other revenues continue to grow." Daniel O. Jarvis, executive vice president and chief financial officer writes: "In aggregate we expect gross profit from our continuing resort businesses to increase by 50-60 per cent from the present level of $23.3 million in fiscal 1994." Jarvis concludes his report by writing: "As we look forward over the next two to three years we expect significant and sustainable revenue growth in all three of our core divisions based largely on recurring sources."


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