Vail’s Whistler Deal Has Global Impacts

Vail Resorts’ $1 billion acquisition of Whistler Blackcomb (see “Industry Reports,” page 10) is stunning in its implications on several levels. First, it values WB at 11 times EBITDA, a higher multiple than the eight or nine that is typical for the industry, and VR usually pays less than that.

KSL Capital Partners, which owns Squaw Valley Alpine Meadows, Calif., is a big winner in the deal. KSL bought 24 percent of Whistler Blackcomb’s public offering back in 2012 at C$12.75 a share; VR is paying C$36 in a combination of cash and VR stock. So KSL is tripling its investment, and will have 2.5 percent stake in Vail Resorts.

Whistler Blackcomb looks strong as well. VR plans to proceed with the $345 million Whistler Blackcomb Renaissance year-round development over the next decade or two. Plus, WB will gain from inclusion in the Epic Pass program starting in 2017-18. That is sure to bring new visitors to the resort.

In return, Vail adds North America’s most popular winter resort to the Epic Pass. VR will likely sell more than 500,000 Epic Passes for the coming season, a figure that could exceed 700,000 for 2017-18, once Whistler is included. That translates into about $450 million in pass revenue, give or take.

VR also extends its global reach. With markets in Canada, Asia, and the U.K., “Whistler Blackcomb’s impact on Vail Resorts really is about the whole world,” said VR CEO Rob Katz. “There is so much power here that goes well beyond the United States.”

Meanwhile, back in North America, the multi-company, multiple-resort Mountain Collective and M.A.X. passes have expanded their rosters, too. Coincidence?

This Trail Goes Right and Left

Some trail names at ski resorts have historical significance, others are just fanciful. But few tend to evoke much in the way of emotions. Does anyone react with more than a giggle (or a sigh) when they see Jaws of Death, Naked Lady, or Devil’s Crotch on a trail sign?

However, one trail at Deer Valley, Utah, has struck a chord with politically sensitive skiers. A relatively short green circle trail, “Trump,” was named after an old mining claim, like many of the trails at Deer Valley. It has zero connection with the billionaire Republican presidential candidate.

Nonetheless, in the heat of the primary season last winter, Trump-haters repeatedly defaced the “Trump” trail signs. The resort also received a bit of flak for the trail name from guests who inferred a political message. In a display of reason and sanity, the resort says it has no intention of changing the trail name.

ready for a possibly Snowy Winter?
It’s early, of course, but meteorologists are cautiously predicting a return to more normal winter patterns after last year’s dismal showing across most of eastern North America. Matt MacDonald of Environment Canada noted that with El Niño reversing to La Niña conditions, winter should be colder and snowier. Being a weather forecaster, though, he hedged, saying La Niña can also mean a drier than normal winter.

According to AccuWeather, La Niña puts emphasis on the northern jet stream while weakening the southern jet, keeping moisture in the northern tier of the country. In late June it forecast a weak La Niña, with average snowfall in the Northeast, heavy snow across the upper Midwest, and a stormy season in the Pacific Northwest. AccuWeather predicted below average moisture for the southern tier from coast to coast.

OK, so it isn’t a perfect forecast. At least it’s better than last season.

We’re All In this Together

As the discussion about climate change reverberates through the mountain resort industry, there may be no louder voice than Protect Our Winters (POW). Since its inception, the non-profit organization has leveraged the clout of pro athletes to raise awareness of environmental issues that impact snow sports. But it has also drawn support from the wider business community.

Since Jeremy Jones founded POW in 2007, Clif Bar has been a key partner. Clif donates one percent of the net sales from its seasonal Clif Bars to POW, this year totaling $60,000. This donation directly funds the Hot Planet/Cool Athletes program, an in-school assembly program presented by professional athletes aimed at providing high school and middle school students with a better understanding of climate issues. And we used to think Clif Bar was simply a handy way to grab a quick lunch on the lift.

Red Takes Funding Route Less Traveled

Red Mountain, B.C., has taken the road less traveled in its marketing over the past few years. In the words of CEO Howard Katkov, “We have consciously maintained our mom ’n’ pop/weird uncle feel.” So it’s not totally shocking to see it turn to crowdfunding for its latest capital campaign.

Red is, at least for the moment, the anti-mega resort. It wants to remain the Little Resort That Could. Hence, its fundraising campaign, “Fight the Man. Own the Mountain.” In late August, the resort launched round one of the campaign, “Test the Waters,” to see how many people are willing to invest $1,000 or more to own a stake in the resort. If there’s sufficient interest, Red will file the proper offerings in the U.S. and Canada.

If successful, other resorts are likely to poach the idea, too, as happens with every other good idea in the ski industry. That’s how trends are born.

It’s All a Matter of Trust

Park City, both the town and the resort, has a pretty strong brand. For this reason, several businesses in the area use the town’s name in their moniker. That includes Vail Resorts-owned Park City Mountain Resort. And it’s common practice for businesses to trademark their brands, to prevent other businesses from capitalizing on (or worse, diluting) any established brand recognition.
But it gets a little sticky when the town and resort brand are deeply intertwined, as Vail Resorts discovered after it filed a trademark application in May to secure the name “Park City” for the resort.

Local residents, business owners, and even local government officials were like, “What? Really? No.” VR assured critics that the company was only protecting its brand, and limited its application to resort-based activities. It promised it would not seek action against other businesses in town bearing the Park City name. Still, in the wake of the bruising battle Vail Resorts waged with former owner Powdr, there are some Park City denizens who don’t yet trust the company. So, in July, VR abandoned the trademark effort.

That leaves the resort’s brand a bit unsettled. The resort’s official name is still Park City Mountain Resort. But VR itself refers to it as Park City or Park City Mountain. How long can that ambiguity last?

Tonga Aims For Winter Olympics

While some resort country residents worry about global warming’s impact on snow sports, faith in winter is coming from an unlikely source: the Pacific Island nation of Tonga. The micro-nation hopes to have a team of four skiers entered into the Winter Olympics in South Korea in 2018 despite a lack of snow in the homeland.

With no native downhillers, Tonga is seeking competitors among the ranks of Tongans living abroad. The Royal Tonga Ski Federation (yes, there really is such a thing) says it will provide training and funding, and it has joined the International Ski Federation. And this is not the country’s first foray into winter sports: It fielded a luge competitor in Sochi in 2014.

Royal Tonga Ski Federation Secretary-General Leafa Mataele Wawryk told Radio New Zealand she hopes the team can inspire young Tongans back home, not to mention neighbors in Fiji and American Samoa. She is hoping to line up training facilities in Australia and New Zealand.

“If we can pull this off, it will be awesome for all the Pacific Islanders,” Wawryk says. And how.