Whistler, Blackcomb merge
"The competition has been fun and exciting to this point, but it’s a different game now. We’re at the point where the landscape is changing very quickly. We’re in a different league now."
That was Hugh Smythe’s summary of the circumstances that brought Whistler Mountain and Colorado’s Copper Mountain under the Intrawest banner Wednesday, making Intrawest the largest mountain resort operator on the continent.
Smythe, president of Intrawest’s Resort Operations Group, and Charles Young, president of Whistler Mountain Holdings Corp., the private company which owned Whistler Mountain Ski Corporation, both emphasized the ongoing consolidation of the North American ski resort industry and the need for Whistler to take steps to remain competitive as reasons for the mega-merger.
"It’s important from a competitive point of view," Smythe said. "The resort will be stronger in the destination market. We’ll have 1,200 new rooms in the resort next year and we have to fill those."
He estimated if the 1,200 new beds are 70 per cent occupied next winter that will mean 300,000 more skier visits.
The $260 million CDN deal includes plans for capital infusions of at least $35 million CDN to on-mountain operations at both Copper Mountain and Whistler Mountain. As well, Intrawest will begin work on Whistler Mountain’s Creekside redevelopment this year and plans to invest $460 million CDN in a village at Copper Mountain over the next 10 years.
The deal comes just nine days after Intrawest announced a real estate partnership with Squaw Valley Ski Corporation in California. Vancouver-based Intrawest now owns ski resorts in all the major mountain regions of North America, including Whistler and Blackcomb, Panorama in eastern B.C., Mont Tremblant in Quebec, Stratton in Vermont, Snowshoe in West Virginia, one-third of Mammoth in California, and Copper Mountain in Colorado.
The gradual consolidation of ski resorts was accelerated earlier this year with the announcement that Vail Resorts, which owns Vail, Beaver Creek and Arrowhead resorts in Colorado, had merged with Ralcorp Holdings, which owns Breckenridge, Arapahoe Basin and Keystone resorts in Colorado. The merger is being reviewed by the U.S. Justice Department. If approved Vail-Ralcorp would control 60 per cent of the 11 million annual skier visits in Colorado.
Smythe noted the new chairman of Vail has specifically targetted Whistler/Blackcomb visitors. In fact, he was in London last week meeting with tour wholesalers who sell tours to Canada.
"I know they sit in meetings and discuss how to attract skiers that are going to Blackcomb and Whistler, the Japanese market, the Germans," Smythe said.
He added Vail tried to get a direct air route going this winter from Vancouver to the Eagle Airport in Vail.
Smythe and Young emphasized there would be no changes to operations at either Whistler or Blackcomb this winter and they see few changes to those operations in the future.
"The distinct personalities of each mountain will be maintained," Young said.
Young said the announcement of the merger, which was formalized at 9 a.m. Wednesday but won’t be completed until March 14, was "a happy day for us.
"We looked at the changing landscape of ownership over the last year, we had George Gillette (of Vail) visit us, and we decided on this deal with Intrawest."
Both Young and Smythe said the Taluswood real estate partnership between Intrawest and Whistler earlier this year led to the merger discussions.
Smythe, who started work as a ski patroller on Whistler Mountain when it opened in 1966 and was mountain manager in the early 1970s, said the Copper connection was important to the Young family and the Whistler Mountain part of the merger was important to Copper Mountain owner Tony Noevelli.
He said Intrawest’s goal with the Copper acquisition was geographic diversification, particularly in building its data base of skiers and snowboarders from each of the continent’s geographic regions. Intrawest uses that data in cross-marketing, designing ticket options and determining visitor preferences.
Smythe said Intrawest is not done buying resorts and is closely watching the Justice Department’s ruling on the Vail-Ralcorp merger. Intrawest is involved in a real estate development at Keystone, one of the resorts involved in the Vail-Ralcorp merger.
Whistler Mayor Hugh O’Reilly felt the merger would be good for Whistler.
"My only concern is that some people might feel ostracized about the mountains concentrating on the destination market, but Vancouver is too big to ignore. They won’t forget the local skiers."
O’Reilly said he could see all sorts of hurdles falling as a result of the merger, such as transportation issues, housing, the W5 Foundation and consolidation of many of the remaining bed units.
He agreed with Smythe that it will take "a huge effort to fill all the new rooms next winter," and the merger should help marketing efforts to fill those rooms.