Is bigger better for the consumer? The ski industry has been beta-testing that for going on a decade with the ongoing consolidation of ski-resort ownership. Joining that trend is the mega-announcement today of a $1.5 billion deal by Aspen Skiing Company and KSL that they have acquired Intrawest Resorts Holdings, which owns Steamboat, Tremblant, and Stratton, among others, and operates Winter Park. Aspen and KSL formed a new investment group as part of the deal. (Update: The new group followed up the Intrawest merger by purchasing California's Mammoth Mountain, one of the busiest resorts in the U.S.)
Stay tuned for changes ahead in season passes and other multi-resort offerings. But the Intrawest resorts will honor current passes for next season (2017/18), including the Rocky Mountain Super Pass and the MAX pass.
Steamboat, Colo., is the crown jewel in the Intrawest merger, consistently in the top five or so in skier visits each season, regularly topping the million-visits mark. With the acquisition of Tremblant and Stratton, the merger also expands the footprint of Aspen and KSL, a private equity firm, in the East.
Combining today’s merger with Vail Resorts' portfolio, which now numbers nine major destination resorts (and counting?), that adds up to nearly 20 top ski resorts under management—in one form or another—of two giant resort operators.
With Vail Resorts and Aspen both calling Colorado home, the deal reignites an old-school state rivalry that had diminished in recent years as Vail Resorts expanded into the world's biggest ski operator. The merger also makes Colorado the hub of the red-hot battle of consolidation as Aspen/KSL gains traction against Vail Resorts in the fight for winter market share, and also in the key area of future growth of summer resort business.
Is that good for skiers and the ski industry? Then again, is that a moot point? Consolidation looks to be the dominant business model in today’s global economy—and doesn’t appear to be slowing down anytime soon.
Undeniably, resort consolidation has lowered one part of the cost of putting skis on snow: ski passes, though there has been upward price creep lately. Vail Resorts’ signature Epic Pass program created the market and remains the industry standard, prompting other resorts to launch similar programs. Also on the good side of the ledger: Multi-resort passes do bake in incentives to travel to a variety of destinations, which is healthy for the sport.
But along with consolidation comes standardization, with both its cost-reduction benefits but also its inevitable merging of the ski experience across destinations. What once was unique is now one tile in a bigger corporate mountain mosaic.
In the ongoing competition between the Epic Pass and the Mountain Collective pass products, this merger should lead to an expansion of the Collective, which originated with the Aspen Skiing Company. With the recent addition of Sugarbush, Vt., and Snowbasin, Utah, the Mountain Collective now includes 16 resorts.
While not a condition of the merger, Squaw Valley/Alpine Meadows, an affiliate of KSL, will become part of the new portfolio at the closing, but will continue to operate under its current management, according to the announcement. The mega-merger is scheduled to close in early fall 2017, and also involves other Intrawest properties, including Canadian Mountain Holidays, the biggest heli-ski operation in the world, and Snowshoe Resort in West Virginia.
“This transaction creates significant opportunity for Intrawest and delivers tremendous value to our current shareholders,” Thomas Marano, Intrawest’s chief executive officer, said in the announcement.
Indeed. The valuation of the Intrawest stock price in the deal is nearly a 40 percent premium over recently traded prices, Marano said.
This is just the latest announcement to rock the ski-resort industry. Earlier this season, Vail Resorts snagged Stowe, its first foray into Eastern skiing, in addition to the mega-move last summer of acquiring Canadian giant Whistler Blackcomb resort in another billion-dollar deal. For more on the march of resort consolidation, head here.