Stratton resort village by Hubert Schriebl
by Timothy McQuiston Vermont Business Magazine A New Jersey financial firm is anticipating more ski resort mergers, following a flurry of such activity earlier this year that led to some of Vermont's largest resorts changing hands or engaging in ski ticket deals. Condor Capital sees a strong economy backed by good snowfall as a recipe for continued competition between Vail and Aspen. Already in 2017, Vail bought Stowe Mountain Resort and Stratton was part of a complex deal that makes it part of Aspen. Meanwhile, Sugarbush, still independently owned and operated, has partnered with Aspen on some sharing of ski passes.
As the cold air begins to set in, skiers across the country grow anxious for a 2017/18 ski season filled with not only bountiful slopes, but new experiences.The prior year's winter weather, while quite delayed, proved to be beneficial for resorts acrossthe United States, resulting in an average resort snowfall increase of 36 percent year-over-year. Vermont saw a notable increase compared to the prior year beset by warmer weather and fewer skiers.
Last year's betterweather also contributed to a 1.5 percent increase in nationwide skier and snowboarder visits for the 2016/17 season, or 54.7 million skier visits from 53.9 million during the 2015/16 ski season, according to figures by the National Ski Areas Association (NSAA).
Vermont skier visits finished this past season at nearly 4 million, well over the previous season's disappointment of 3.2 million, according to Ski Vermont. The 2014/2015 was a record 4.7 million, second best in the nation (Colorado is by far the largest, with California typically second, Vermont third and Utah fourth).
For this season, early signs look like winter may yet again be off to a slow start, although many long-term forecasts call for average to slightly above-average snowfall for many popular ski destinations in the country, especially in the Northeast.Looking ahead, relatively positive winter weather forecasts, coupled with growing ski resort consolidation among many notable resorts across the country that is strengthening multi-resort pass competition, hasKen Schapiroof Condor Capital Management optimistic for a solid 2017/18 ski season.
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This season will likely be impacted by a weak La Niña, resulting in generally drier and warmer weather in the southern portion of the US, with the northern region of the country experiencing colder temperatures and more abundant snowfall, an especially hopeful sign for the Northeast and Mid-Atlantic regions that largely missed out on snowfall last season.Although, it should be noted that it is unlikely that massive storms will again bring forth the record snowfall totals that ski resorts in states such asColoradoandCaliforniaenjoyed in the 2016/17 ski season.However, despite the long-term forecasting results of many organizations, it appears that early season weather may be mimicking that of the prior winter, which included a significant lack of snowfall across virtually the entire country until the holiday period came about.Colorado, for example, has seen very little snow accumulation thus far, with warmer temperatures spiking up through the beginning of December.
Stowe was bought by Vailin 2017 for $41 million. Stowe photo.
Although the weather is certainly a significant component in gauging the strength of the ski season, the condition of the overall economy is also important to consider.Signs point to a very healthy economy, with third-quarter gross domestic product (GDP) growing 3.3%, the fastest pace in three years, and following a strong second-quarter 2017 GDP increase of 3.1%. Furthermore, the overall economy could also receive a boost depending on the outcome of the proposed tax reform currently being legislated.These items, along with solid consumer spending figures as of late (3.3% growth during the second quarter of 2017), appear to shape a sound backdrop for the U.S. consumer and should translate to respectable revenues for ski resorts as the winter grows colder.
Weather and economic indicators aside, developments in the ever-growing resort consolidation race between Vail Resorts and a relatively new entrant that is yet to be named, should certainly begin to change things up this ski season.
In the past year, Vail Resorts acquiredVermont'snotable Stowe Mountain Resort, as well as Whistler Blackcomb inBritish Columbia, the largest ski resort inNorth America, leavingVailwith a robust portfolio of 15 ski resorts. These acquisitions are a key component inVail'splan to increase sales of its highly popular multi-resort pass offering – the Epic Pass, which gives individuals the opportunity to ski at some of the most premier destinations across the country, such asPark CityinUtahandColorado'sBreckenridge.
Not to be outmatched, in April of this year, investment group KSL Capital Partners (KSL) joined forces with owners of Aspen Skiing Co. (SkiCo) with the intention of amassing a portfolio of resorts rivaling that of Vail Resorts.Accordingly, the currently unnamed company has been on an acquisition streak, adding the six U.S. and Canadian resorts owned by Intrawest Resort Holdings, which include popular locations such as Steamboat inColoradoandMont Tremblant(Canada).
Two days later, the partnership went on to purchase Mammoth Resorts, which runs four ofCalifornia'smost popular ski resorts: Mammoth, June, Bear, and Snow Summit. Following these moves, the unnamed firm acquiredUtah'sDeer Valley, which is located just nearVail'sPark Cityresort.Through these transactions, the newly formed resort company has an impressive portfolio of 13 resorts that attract more than seven million skier visits, and are geographically diversified across the majority ofNorth America'smost popular ski regions, includingCalifornia,Utah,Colorado,Vermont, andCanada.
Clearly, businesses in the ski industry are finding acquisitions to be the quickest way to increase market share, particularly given the high infrastructure costs and environmental regulations that go along with forming a new resort.Even independent ski resorts are joining together to be included in multi-resort passes such as the Mountain Collective and MAX Pass, which may be the only strategy to keep up withVailand KSL/SkiCo.
Sugarbush is part of Aspen's "Mountai Collective" ski pass. Sugarbush photo.
All in all, these developments should be a boon for skiers across the country, with multi-resort passes offering skiers the opportunity for even more outings, some at resorts that may have historically been too far/expensive to make a visit worth it. On this front,Vail'sacquisition of the Mount Brighton resort inMichiganshows that the firm hopes this resort will create a feeder stream of new consumers that usually choose to ski at more affordable, family-run resorts, a strategy that KSL/SkiCo will likely employ itself.
Additionally, as more consolidation takes place, skiers can expect increasing price competition for multi-resort passes, which could potentially forceVailto limit or reduce historically steady price increases for its Epic Pass, especially once KSL/SkiCo releases its pass offering for next season.
However, while this consolidation will likely bring new visitors to resorts across the country, these influxes of new skiers could at the same time negatively impact the exclusivity and overall experience for skiers who regularly attend resorts like Aspen Snowmass. It should be noted that it remains to be seen if SkiCo's four resorts will be included in a new pass offering, as they are not formally included in the newly formed partnership.
With continued consolidation taking place amongst many of the most notable ski resorts in the USthis past offseason, skiers aim to benefit from an ever-growing breadth of opportunities available. These developments, an increasing shift towards skiers purchasing popular multi-resort pass offerings, along with a generally positive weather forecast, leadKen Schapiroto expect skier days growth of 3-5% this season.
Condor Capital Management
Founded in 1988,Condor Capital Managementis an employee-owned, SEC-registered investment advisor based inMartinsville, NJ, employing 16 professional and support staff.Since Condor is a fee-only investment management firm, its fees are based on portfolio size, not sales commissions or number of trades. For more information on Condor Capital Management, please visithttp://www.condorcapital.comor call 732-356-7323.
SOURCE MARTINSVILLE, N.J.,Dec. 11, 2017/PRNewswire/ --Condor Capital Management