Doral: A New Brand in Snowsports
Well, our industry’s own headline-maker was at it again. This time Leslie B. Otten, the creator of American Skiing Company (ASC), North America’s biggest ski resort conglomerate, went head-to-head with nine justices of the Supreme Court, the vice president of the U.S. and the governor of Texas. And he lost. ASC’s merger with MeriStar Hotels and the creation of a new entity, Doral International, as the umbrella brand for the nine ski resorts and over 200 hotels involved—well, they simply couldn’t compete with the endplay of the presidential election.
Some details of this complex deal can be found in Reports on page 18. Here we’ll nibble around the edges of this intriguing story. First, what will Otten’s role be as chairman of the new company? Will this dynamo—deal-maker, riverboat gambler who draws to inside straights, passionate snowsport promoter—be happy in Washington, D.C., chairing a company of middle-tier hotels and international corporate housing, mixed in with the far-flung ski empire he assembled? Will Otten’s hands be on any operational levers? After all, CEO of the new Doral will be MeriStar’s leader, Paul Whetsell, while CFO will be another MeriStar executive, John Emery. The operational control of the Doral Leisure Division—one of four created and the one directing the ASC ski resorts—will be headed by William J. “B.J.” Fair, current COO of ASC. He and the other four division heads will report directly to Whetsell. So where does that leave restless Les? Well, in his mind anyway, not twiddling chairmanly thumbs in Washington. “I’ll be down there perhaps one day a week,” he told SAM. “I will have a very active role in directing the company, doing what I love to do. It’s the best of all worlds for me. Paul [Whetsell] and I are in complete agreement. My relationship with my company is not going to change.”
But Otten does concede that his expansionist genes will be on indefinite hold. The company, as he sees it, is not at all in an acquisition mode; nor, he insists, is any thought being given to sell any of the ski properties, as some analysts have surmised. Otten sees ASC’s segue into Doral International as holding some lessons for the ski area industry. Seeing himself as “a breakthrough guy for this industry” based on the moves he made to put ASC together in the first place, he says the MeriStar merger takes the industry to another plane by the creation of “a four-season leisure company, with stable, year-round cash flow, geographical diversity and insulated from the vagaries of the weather.”
How will the Doral brand play in the snow-covered mountains? Otten says they tested the name carefully and it plays well because of its leisure connotation. “Who knows, we might want to have a Doral Village at Killington, complete with a 4 or 5 star hotel,” he says.
After all the incidental details are pored over, what really happened at ASC? Following is a rough consensus of the off-the-record interpretations by a number of financial experts both within and outside the industry. First, regardless of the benefits the merger brings to the operations of both companies, it can also be seen as a realignment of the deep investments the Texas-based Bass family has in both ASC (through Oak Hill Capital Partners)and in the MeriStar hotel management operations and associated REIT.
Wall Street has not been exactly dazzled by any brilliance in Bass family investing in the past few years and this skepticism may color people’s assessment of the merger on its own intrinsic merits. Significantly, Oak Hill will own 45 percent of Doral International and will name four board members. Those four, plus insiders Whetsell and Otten, make the case for Oak Hill’s control of the 11-member board, in the view of some. Other conclusions: Otten should sleep better. Many saw a soft landing from the perilous limb he occupied and probably decreasing pressure from the personal loans he undertook when trying to maintain control of ASC. Another observation: that the infusion of stability and operational savvy cannot help but be good for the ski operations.
Dept. of (Utterly Useless) Statistics
Sometimes, we in the ski media are asked by our non-ski media friends to provide statistics on our industry. Recently, SAM was asked by a Florida newspaper to give a figure for the total dollars spent on making snow (capital plus operational expenses) since snowmaking started in 1950. We ran our giant statistical database through our humongous mainframe, adjusted old dollars to millennial ones and (Tah-Dah!!!) came up with $4 billion. That sounded too pat, so let’s up it to $4.1 billion. Remember, you saw it here first.
Colorado’s Lynx: A Report Card
Of the 96 Canada lynx released by the Colorado Division of Wildlife (41 in 1999 and 55 in 2000), 61 are still being tracked through radio telemetry. There have been 28 known mortalities (including one shot in southeast Nebraska who gets the long-distance award) and some others where the animals slipped the collar or the collar became inoperative. The biggest concentration of the lynx is, as was predicted, in the San Juan Mountain National Forest where the lynx’s favorite food, the snowshoe hare, is abundant. One irony in the whole re-introduction program is that its funding came largely from Vail, the very resort where the ecoterrorists committed their arson attack “in the name of the lynx.” One could hope that what is learned from the satellite tracking will help produce science-based regulations on land use to replace the guesswork that underlie the current ones.
Area Expansion? You Flunk Enviro Test
The A to F letter grades for environmental worthiness handed out by Ski Area Citizens Coalition (SACC) to 51 western ski resorts immediately prior to the Thanksgiving weekend predictably got a mixed reaction, ranging from outrage to a philosophical shoulder shrug. After the dust had settled and the news media had reported on the saints and sinners (e.g. Sundance, Sun Valley and Aspen with A’s; Vail, Deer Valley and Snowbasin with F’s), the consensus was that, though skiers are riders are environmentally concerned, their decision on where to slide would be more likely based on snow conditions than on an enviro report card. There seemed to be a disconnect between what those guests want and what SACC says they should want. Also, the report card seemed to be more of a once-a-year shot that couldn’t expect to have season-long legs.
On the other hand, there was frustration over the contrast between SACC’s immediately understandable, media-friendly thrust of a report card and the industry’s earnest but plain-Jane stance of an Environmental Charter. “It’s no contest,” said one observer. But, NSAA’s Geraldine Hughes feels she has more than enough to give the industry the upper hand. On February 24, NSAA kicks off a campaign in which ski areas will bring their message of Sustainable Slopes in an outreach to consumers. It is designed to open the eyes of skier/boarder guests not only to the environmental sensitivity of the area they are visiting, but also educate them in how they, as individuals, can respect the environment where they are recreating. “What You Can Do” is the theme.
Another environmental arrow in Hughes’ quiver is the PBS “Spotlight” series, this one a five-minute film titled “Environmental Charter/Sustainable Slopes,” that will be aired on PBS as many as 500 times over a three-month period this winter. Millions of viewers will see this film, shot at Aspen and at Jiminy Peak, Mass., and underwritten by those two resorts and also by the Department of Energy, one of NSAA’s Environmental Charter partners. Hughes is also excited that NSAA has received a grant from the National Fish & Wildlife Foundation (another Charter partner) that will fund a part-time person to coordinate implementation of the Charter.
Funny thing about all this: it probably is improving the environment.
Spike in Consequences of Recklessness
With the conviction of Nathan Hall for criminally negligent homicide, a new threshold has been reached in risk management. It is the first time a ski collision has resulted in a criminal trial. The accident occurred at Vail in the spring of 1997 and the trying of Hall on criminal charges in Eagle County was largely the result of the Colorado Supreme Court reversing lower court dismissals in the intervening years. Hall, now 21, will have been sentenced by the time you read this. Up to six years in jail is possible, though most predict no jail time. Interestingly, all jurors identified themselves as skiers or boarders.
Vertical Bragging Rights Resolved
Killington’s Website used to claim the greatest vertical drop in the East at 3,150 feet.In an e-mail to about 50 in the ski media, Sandy Caligiore cried, “I’m mad as hell. New York”s Whiteface has 3,216, even 3,350 if you count The Slides.” Killington’s site now claims the greatest vertical in New England. Oh, the power of vertical spurned!
