Whistler’s still number one according to Snow Country magazine but a corporate merger between Vail Resorts and Ralcorp Holdings, combined with Vail’s ambitious on-mountain expansion this summer and a planned public stock offering, indicate the stakes in the mountain resort business have gone up another notch.
"They’re an incredibly powerful force in the ski industry," said David Perry, Whistler Mountain’s director of marketing.
"They’re going to dominate Colorado, and Colorado is the biggest ski region in North America."
On July 23 Vail Resorts Inc., owner of the Vail, Beaver Creek and Arrowhead ski areas in Colorado, announced an agreement to merge ski and resort operations with Ralcorp Holdings Inc. Ralcorp’s resort properties include Breckenridge, Keystone and Arapahoe Basin ski areas, as well as extensive real estate holdings. The merger creates the largest mountain resort company in North America, with approximately 5 million skier days and $300 million in annual revenue.
Andy Daly, President of Vail Associates Inc., the principal subsidiary of Vail Resorts, said in a press release: "The merger has the potential to transform the ski industry. We will now have five different mountain resorts with different personalities, offering different skiing and vacation experiences, aimed at different clientele, all located within a 40 mile radius."
The merger takes place just before Vail Resorts goes public this fall with a $150 million stock offering. Leon Black of New York will continue to hold a majority of the company’s stock after completion of the offering.
The Vail-Ralcorp deal is the latest in a series of mergers and acquisitions in the mountain resort business in recent years. Earlier this year LBO Enterprises, a New England ski area operation, bought S-K-I Ltd. The deal, which at the time created North America’s largest mountain resort company, brought S-K-I’s five areas — Killington, Mount Snow and Haystack in Vermont, Waterville Valley in New Hampshire and Sugarloaf, in Maine — together with LBO Enterprises’ Attitash and Mount Cranmore in New Hampshire, Sugarbush in Vermont and Sunday River in Maine. The new company is called the American Skiing Company.
Following the merger the Justice Department required the privately-held American Skiing Company to sell Mount Cranmore and Waterville Valley to forestall anti-trust claims from the perceived domination of the New England ski market.
Vancouver-based Intrawest Corporation, which owns Blackcomb and Panorama in B.C., Mont Tremblant in Quebec, Stratton in Vermont, Snowshoe in West Virginia and one-third of Mammoth Mountain in California, has been involved in a real estate and village development with Ralcorp at Keystone for the past couple of years.
Intrawest has said it wants to acquire a ski resort in Colorado and was believed to be eyeing the Ralcorp trio of resorts. Hugh Smythe, president of Resort Operations for Intrawest, was out of town this week and could not be reached for comment. A spokesman for Daniel Jarvis, Intrawest’s chief financial officer, said the company had no comment on the Vail-Ralcorp merger.
At the same time the merger was announced, Vail Resorts announced Adam Aron will join the company as chairman and chief executive officer. Aron, 41, is currently president and CEO of Norwegian Cruise Lines Ltd. and has extensive experience in marketing. He is expected to be involved as Vail Resorts expands into "other leisure and hospitality opportunities beyond the alpine resort business."
"We have an even more formidable competitor in the marketplace," Perry said of Aron.
"We can still hold our own," he said of Whistler resort, "but if we’re not planning changes we’ll be in trouble."
The Vail-Ralcorp group plans to spend $20 million annually on marketing, pooling the resources of its ski areas to reach the overseas and Colorado day-skier markets more effectively.
The Whistler Resort Association has an annual marketing budget of about $4.2 million. WRA President David Thomson said co-op marketing programs with various tourism associations and airlines help make those dollars go further, but co-op marketing can also take longer to put in place.
Perry said Whistler’s advantages are the village, the two mountains, the amount of snow Whistler receives, the Canadian dollar and the Canadian experience of the resort.
The recent mergers and acquisitions make Whistler Mountain Ski Corporation, a private company, a relatively small player in the mountain resort business. But Perry said WMSC sees itself as an integral part of the whole resort.
"We’re here with all the businesses in town, we’ll be competitive," he said.
Perry pointed out that competition between Whistler Mountain and Blackcomb has accelerated development on the two mountains, to the benefit of skiers and boarders.
"As long as we’re focused on improving our products we’ll be competitive. The key is to be aware of (the resort’s) competitors and marketing efforts," he concluded.