snoloco
Well-known member
- Joined
- Jan 1, 2021
The issue with ski resorts is that for the last 15 years, Vail Resorts and then Alterra have largely set the price of ski resort acquisitions. They were buying up literally every resort they could get their hands on. I wouldn't be surprised if they were sending unsolicited offers to the previous owners to see if they'd take it. The market was literally red hot.
If those companies stop buying, or worse yet, start selling, then the values of the resorts are going to drop. Anyone who took on big debt to acquire resorts may end up owing a lot more than they are worth. Powdr is still a major player, but they aren't as big as Vail or Alterra, so their sell-off will not likely have as big of an effect. Alterra has only been around for 6 years, but Vail Resorts has been around much longer, and still has yet to sell a resort.
It's not all bad news. The industry is still profitable, and resorts aren't taking on a lot of debt to make capital improvements like they did in the 90s and early 2000s. Most of what they are spending is what they are making. Vail Resorts isn't buying resorts as fast as they used to, but they're still profitable enough to keep buying back stock. As long as people keep buying passes and skiing, I think you'll see the same pattern continue, just without as many acquisitions.
As for Killington, I read somewhere that Alterra executives were spotted there earlier. I'm not sure if they ever made an offer, but I would guess they backed out due to the fact that Killington isn't a turnkey resort. Yes, Powdr has invested in it, but it needed a lot more than it got from them. Multiple lifts are past their useful lives and in need of overhaul or replacement. They still need to replace the Ramshead and Snowshed lodges as part of The Village. The snowmaking system is also severely outdated becoming less reliable. Those things have to be done to keep the resort in a good state of repair, but they are very expensive. Normally, doing so would increase the value of the resort, but given the uncertainty of whether the big conglomerates will keep buying makes it a more risky proposition.
I think Killington is in a much better place under the new ownership than they were under Powdr, or hypothetically speaking, Alterra, for the simple fact that being an eastern resort owned by a western based conglomerate, with a lot of western destination resorts, let's face it, sucks. Alterra in particular focuses very heavily on their top 5 resorts, those being Deer Valley, Mammoth, Palisades Tahoe, Steamboat, and Winter Park. They don't leave much for anyone else. This year, they only built one lift outside of the top 5, which is Heaven's Gate at Sugarbush. Last year, the only one was Powder Monkey at Snowshoe. Before that, they didn't build any new lifts outside of the top 5 since 2018. Vail resorts has been slightly better with 7 out of their 16 eastern resorts getting at least 1 new lift since 2021.
The resorts in the east that are investing the most are not owned by those companies. Boyne only has one western destination resort in Big Sky. They have other resorts in the west, but their customers are more local and they are more on the scale of an eastern resort. Big Sky got the most love and got it first, but there was a lot of budget left over to invest in Loon, Sunday River, and Sugarloaf, all 3 of which are now thriving. Then you have ORDA which has pumped millions upon millions into Belleayre, Gore, and Whiteface over the last decade.
Note that Powdr still has a minority stake in ownership, which could be anywhere from 1-49%. It was a private sale, so we don't know the full details, but I have two theories as to why. One is that they still see potential in that value to grow, so it was worth holding onto a stake in the resort. The other is that the new owners agreed to some form of owner financing, where they gradually buy out the previous owner over some number of years.
