Vail to buy Stowe?

[Jully]

I used to get paid to predict businesses future, so here's my guess where Vail goes from here, and while things look great right now, I do have some early concerns.

This EPIC pass effort has been very successful and it still has legs, so the stock price will keep going up for a bit, but I feel they're close to approaching the top of the bell curve on their potential success with this strategy.

So.....

They're a publicly traded company, not growing profits is not acceptable. As they struggle to grow revenue they will continue to buy mountains, as bolt-on revenue is the easiest way to continue to grow, plus......without getting too deep in the weeds....you can do a lot of accounting maneuvers to mask growth decline or growth stasis through acquisitions. Also, look for more "international" mountains being purchased, and you'll hear Vail say this is both to grow the business and seek to add additional markets for growth. To the novice, at this point it will look like Vail is taking over the world, but WARNING, at about this time Vail's acquisitions will begin to decrease in quality for two key reasons. 1) You've already picked off the low-hanging, most advantageous acquisition fruit 2) Acquisition cost increases through lower supply as well as the fact sellers know your MO and know you're now a "motivated" buyer. Big difference heading into a sale from a position of strength versus a position of weakness.

As it becomes increasingly difficult for Vail to grow revenue, they will now look to cut expenses. First, they'll look to cut the non customer-facing expenses so as to be relatively unnoticeable. There'll probably be a renewed emphasis on efficiency, competitive-bidding etc.. The next thing will be the labor cuts, and you'll no longer be able to swing a dead cat and hit a Vail employee. Seriously.... it's crazy how many employees these Vail properties have. Every 10 feet you see someone with a Vail coat. That labor-excess will end, and probably swiftly. But cutting expenses too much becomes a "nose spiting" exercise since Vail focuses so heavily on the high-end market and here too, they'll quickly reach the point of diminishing returns. Oh..... also.....the CEO is young and smart, so before things get too bad and when Vail's still relatively on-top, he'll probably resign to "seek new opportunities" and "seek new challenges". Essentially, Vail is so awesome and I've done such an amazing job, that I just cant help it become any better, but that will be an excuse for him to leave while still on top and get a new, high-paid, CEO gig elsewhere, and possibly in an entirely different industry.

The stock then starts to drop once the flaws and lack of growth can no longer be masked & hidden. The Vail business model will begin to be publicly questioned. Vail is just TOO large! Divestitures will begin to occur to raise cash, pay debt, strengthen the balance sheet, and make activist Wall Street investors happy. The initial mountains sold will be called "non-core" assets. And the world turns........

I give this all.......say....... roughly 10 years.

That is the challenge of all publicly traded ski companies isn't it? Profits are harder and harder to grow as you get bigger and bigger. I'm not sure how stable any publicly traded ski company ever is.

 

[tumbler]

To add to BG- a business model that is relies entirely on something out of their control- the weather.

 

[benski]

That is the challenge of all publicly traded ski companies isn't it? Profits are harder and harder to grow as you get bigger and bigger. I'm not sure how stable any publicly traded ski company ever is.

Not only that i feel like the ski industry has been maturing in such a way that ski areas are fighting harder for skiers as opposed to making it more lucrative. If you want to keep growing ski areas need to switch strategy toward beginners, not no terrain and lifts. Maybe vail does that with midwest ski area. If Vail wants to grow, buy Tuxido Ridge and Target it at beginners.

 

[dlague]

Cheap is a relative term when speaking over 800. Is it cheaper than it was? Yes. Is it cheap? No

Well putting things in perspective - cheap for Stowe - yes. Cheap as in competitive with most competitive resports but really cheap for all the resorts that are available.

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[thetrailboss]

I used to get paid to predict businesses future, so here's my guess where Vail goes from here, and while things look great right now, I do have some early concerns.

This EPIC pass effort has been very successful and it still has legs, so the stock price will keep going up for a bit, but I feel they're close to approaching the top of the bell curve on their potential success with this strategy.

So.....

They're a publicly traded company, not growing profits is not acceptable. As they struggle to grow revenue they will continue to buy mountains, as bolt-on revenue is the easiest way to continue to grow, plus......without getting too deep in the weeds....you can do a lot of accounting maneuvers to mask growth decline or growth stasis through acquisitions. Also, look for more "international" mountains being purchased, and you'll hear Vail say this is both to grow the business and seek to add additional markets for growth. To the novice, at this point it will look like Vail is taking over the world, but WARNING, at about this time Vail's acquisitions will begin to decrease in quality for two key reasons. 1) You've already picked off the low-hanging, most advantageous acquisition fruit 2) Acquisition cost increases through lower supply as well as the fact sellers know your MO and know you're now a "motivated" buyer. Big difference heading into a sale from a position of strength versus a position of weakness.

As it becomes increasingly difficult for Vail to grow revenue, they will now look to cut expenses. First, they'll look to cut the non customer-facing expenses so as to be relatively unnoticeable. There'll probably be a renewed emphasis on efficiency, competitive-bidding etc.. The next thing will be the labor cuts, and you'll no longer be able to swing a dead cat and hit a Vail employee. Seriously.... it's crazy how many employees these Vail properties have. Every 10 feet you see someone with a Vail coat. That labor-excess will end, and probably swiftly. But cutting expenses too much becomes a "nose spiting" exercise since Vail focuses so heavily on the high-end market and here too, they'll quickly reach the point of diminishing returns. Oh..... also.....the CEO is young and smart, so before things get too bad and when Vail's still relatively on-top, he'll probably resign to "seek new opportunities" and "seek new challenges". Essentially, Vail is so awesome and I've done such an amazing job, that I just cant help it become any better, but that will be an excuse for him to leave while still on top and get a new, high-paid, CEO gig elsewhere, and possibly in an entirely different industry.

The stock then starts to drop once the flaws and lack of growth can no longer be masked & hidden. The Vail business model will begin to be publicly questioned. Vail is just TOO large! Divestitures will begin to occur to raise cash, pay debt, strengthen the balance sheet, and make activist Wall Street investors happy. The initial mountains sold will be called "non-core" assets. And the world turns........

I give this all.......say....... roughly 10 years.

Have to agree.


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[Domeskier]

Vail is missing a yuuuge potential market by not expanding into the dome skiing business.

 

[BenedictGomez]

That is the challenge of all publicly traded ski companies isn't it?

It's a challenge for any company in any industry, but the risks I pointed out I think are fairly unique to MTN because of their business model. It's seems like a great idea now (and it has been), but eventually the concept will stagnate and become a bit of an anchor. The golden goose Vail has chosen to settle upon as their raison d'être is a finite resource. There's only so many people you can aggressively herd onto EPIC. My guess is you'll eventually see Vail furiously adding new ancillary avenues of revenue, and that will probably be hint #1 that EPIC growth is declining (or stagnating/falling).

 

[Domeskier]

My guess is you'll eventually see Vail furiously adding new ancillary avenues of revenue, and that will probably be hint #1 that EPIC growth is declining (or stagnating/falling).

I'm looking forward to drinking some Vail branded glacier water bottled on site by participants in their Blackcomb summer ski camps.

 

[benski]

I'm looking forward to drinking some Vail branded glacier water bottled on site by participants in their Blackcomb summer ski camps.

Not happening this year. Not enough snow. Global warming. Strikes again.

 

[chuckstah]

Not happening this year. Not enough snow. Global warming. Strikes again.

What's not happening? Summer skiing certainly is. Starts tomorrow.

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[benski]

What's not happening? Summer skiing certainly is. Starts tomorrow.

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the Whistler summer ski camp.

 

[chuckstah]

the Whistler summer ski camp.

There are many camps, and public skiing not cancelled. Plenty of snow. Start tomorrow June 10

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[Gnarcissaro]

Camp of Champions is a no go. Not "plenty of snow." Gotta feel for the guy, sounds like he loved the camp.

https://www.campofchampions.com

 

[chuckstah]

Plenty of camps open. Sucks 2 were cancelled. If you want to ski you can. We all know glaciers are melting.
https://www.whistlerblackcomb.com/groups/school-and-youth-groups/summer-glacier-camps

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[mbedle]

So, final price for Stowe was 41 million. Can anyone explain what could make up 3.5 million dollar lost at Stowe from June 7th till July 31st (end of Vail's fiscal year. This was taken out of their latest reporting:

approximately $2.2 million of Stowe transaction and integration expenses, and $3.5 million of expected Stowe operating losses related to the period between closing and the end of the fiscal year.

 

[machski]

Possibly the lack of early season pass sales since Stowe didn't have any this year?

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[thetrailboss]

Possibly the lack of early season pass sales since Stowe didn't have any this year?

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Stowe never sold passes early IIRC


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[thetrailboss]

So, final price for Stowe was 41 million. Can anyone explain what could make up 3.5 million dollar lost at Stowe from June 7th till July 31st (end of Vail's fiscal year. This was taken out of their latest reporting:

approximately $2.2 million of Stowe transaction and integration expenses, and $3.5 million of expected Stowe operating losses related to the period between closing and the end of the fiscal year.

If I had to guess, payroll, maintenance, summer ops, etc.


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[ironhippy]

Plenty of camps open. Sucks 2 were cancelled. If you want to ski you can. We all know glaciers are melting.
https://www.whistlerblackcomb.com/groups/school-and-youth-groups/summer-glacier-camps

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From what I read, it sounded like there wasn't enough snow to create a terrain park, which is why the camp of champions was cancelled.
Sounds like there's enough snow to ski, but not enough to make huge jumps, etc.

 

[drjeff]

From what I read, it sounded like there wasn't enough snow to create a terrain park, which is why the camp of champions was cancelled.
Sounds like there's enough snow to ski, but not enough to make huge jumps, etc.

Also wonder how much the annual moving of large quantities of the glacial snowpack to build the features has to do with some loss of snow as the cats getting into the glacial snowpack in the warm months most definitely disturbs the pack to deeper depths and introduces more warm air and likely melting than if the glacier was undisturbed or at most just groomed flat for race camps and free skiing.

Kind of like why Killington did as little grooming of Superstar as possible towards the end, except when absolutely​ need to leave it undisturbed....

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