Alterra Buys 15th Ski Resort: Snow Valley, CA

[thetrailboss]

If they really have > $1B in cash, is that even close to happening? God, I wish they’d sell the NH areas.

My understanding is that the cash was a reserve for operations and bad times.

 

[abc]

For many living in New England, even Albany is “west”!

Exactly.

I’m “inline” with Albany. As far as I’m concern, even Denver is “east”!

Anywhere don’t have dry snow is “east”. I’m in the ”east” by that definition.

 

[cdskier]

There's more than just New England to consider though. We had been discussing which resorts Alterra owned in the "east", not just New England. If we were talking about "New England", then even Tremblant doesn't count (nor would Snowshoe). So in the context of discussing "eastern" Alterra holdings, I don't see Blue being even remotely "west". It looks like Snowshoe is actually ever so slightly west of Blue.

 

[urungus]

Nobody from Ontario considers themselves a westerner. Blue (Ontario) is only an hour or two longer drive from NYC than Sugarloaf.

 

[Tonyr]

I don't imagine you'll ever see much swapping of owned properties between Alterra and Vail. Partner swaps sure. Snowbasin and A-Basin, etc, etc. switching sides or going independent. That'll happen frequently. Once one of the cartels owns the mountain outright, they're likely a part of that cartel until a court order or massive corporate collapse (see ASC) occurs.

You never know regarding resort swaps. I'll say this not knowing how true it is but I've heard that at some point Deer Valley, Park City, and this new Mayflower resort being built will all be skiable on one pass someday. I'm a little skeptical of that happening but it's a rumor I've heard from a Park City employee so take that for what it is....

 

[ss20]

The end-game for Alterra has to be what Vail has done. Control all your resorts and then sell the Ikon as access to Alterra-only resorts. Ikon is a great way to build market share.

FWIW... I've heard more traction to the rumor of ~$80 per day Alterra pays resorts for Ikon redemptions. That's a tough pill to swallow when Vail controls all the resorts on their pass products (that is, at least 95% control... don't know if there's any independent resorts left on an Epic pass partnership).

 

[Tonyr]

The end-game for Alterra has to be what Vail has done. Control all your resorts and then sell the Ikon as access to Alterra-only resorts. Ikon is a great way to build market share.

FWIW... I've heard more traction to the rumor of ~$80 per day Alterra pays resorts for Ikon redemptions. That's a tough pill to swallow when Vail controls all the resorts on their pass products (that is, at least 95% control... don't know if there's any independent resorts left on an Epic pass partnership).

It was $70 or $75 a couple of seasons ago, $80 could be the number now. It's easy to figure out, if you buy or had bought pass insurance the credit they give you per day vs the amount you used the pass before you were injured is the redemption rate that the resorts get. I had also read somewhere that there needed to be a certain amount of visitors first to get the full redemption rate but I'm not entirely sure how it all works.

 

[BenedictGomez]

I figured. But if Vail gets overstretched, maybe they will have to dump something.....

Two words: Activist Investor.

 

[thetrailboss]

It was $70 or $75 a couple of seasons ago, $80 could be the number now. It's easy to figure out, if you buy or had bought pass insurance the credit they give you per day vs the amount you used the pass before you were injured is the redemption rate that the resorts get. I had also read somewhere that there needed to be a certain amount of visitors first to get the full redemption rate but I'm not entirely sure how it all works.

That’s my understanding. It was $1 mill up front, used as a credit for the start of the season and billed against at something like $40 or so until it was exhausted. Then it was the $74ish rate.

 

[Edd]

Two words: Activist Investor.

Can you elaborate? Lost me here.

 

[thetrailboss]

Two words: Activist Investor.

Is that you?

 

[danimals]

Blue Mountain and Camelback passes are not interchangeable. One offers a 25% discount to the other resort.

You’re right, but they did offer a pretty cheap “add on” option, which if you bought before 12\30 would make your pass work at both

 

[thetrailboss]

You’re right, but they did offer a pretty cheap “add on” option, which if you bought before 12\30 would make your pass work at both

That’s weird.

 

[crystalmountainskier]

Huh ? 90% of Ontario, including Blue and all other major Ontario ski areas, is in Eastern time zone.

To be fair, drive north from Duluth Minnesota and you are in Ontario.

 

[cdskier]

To be fair, drive north from Duluth Minnesota and you are in Ontario.

Also to be fair, you have to drive about 800 miles almost straight east from Duluth to get to Blue... Provinces in Canada are huge compared to most states in the US...

 

[jaytrem]

Also to be fair, you have to drive about 800 miles almost straight east from Duluth to get to Blue... Provinces in Canada are huge compared to most states in the US...

Ontario is crazy wide. 974 miles, that's about 200 more than Texas. The eastern most part is just about due north of Titus (20 miles or so).

 

[BenedictGomez]

Can you elaborate? Lost me here.

Vail's business is essentially a roll-up strategy, and eventually roll-ups run out of stuff to buy and/or their acquisitions become less attractive (because they already bought the good stuff). They squeeze juice from each successive lemon, but the lemons begin to run dry, simultaneous to all this the roll-up increase prices on ancillary revenue items to make even more money. In the ski industry those items would perhaps be things like food, lessons, heretofore-nonexistent-parking-fess (COUGH).

Anyway, skipping ahead some years, prices on both core & non-core items have been increased to the max, margins begin to become compressed, growth starts to either slip or stagnate, stock price begins to fall, and that's when the activist investor rears his head. He's someone who owns a ****ton of shares and/or has a seat on the board (or demands one if not), is unhappy with his investment, and uses that considerable leverage to demand change in the form of expense cuts and "monetization" (i.e. sell stuff) of assets. For Vail, this would take the form of selling off some properties. This has been my belief for how this saga goes for a while now.

 

[thetrailboss]

Vail's business is essentially a roll-up strategy, and eventually roll-ups run out of stuff to buy and/or their acquisitions become less attractive (because they already bought the good stuff). They squeeze juice from each successive lemon, but the lemons begin to run dry, simultaneous to all this the roll-up increase prices on ancillary revenue items to make even more money. In the ski industry those items would perhaps be things like food, lessons, heretofore-nonexistent-parking-fess (COUGH).

Anyway, skipping ahead some years, prices on both core & non-core items have been increased to the max, margins begin to become compressed, growth starts to either slip or stagnate, stock price begins to fall, and that's when the activist investor rears his head. He's someone who owns a ****ton of shares and/or has a seat on the board (or demands one if not), is unhappy with his investment, and uses that considerable leverage to demand change in the form of expense cuts and "monetization" (i.e. sell stuff) of assets. For Vail, this would take the form of selling off some properties. This has been my belief for how this saga goes for a while now.

Who are the major individual or institutional stakeholders in Vail? That may give us a hint of who to watch.

 

[ericfromMA/NH/VT]

Snow Valley is a smaller hill close to population centers of SoCal.

So maybe Alterra would be looking at Windham or something similar?

I've heard rumors that Boyne may take some mountains off Ikon and do their own pass. Hope not as we will likely stick with Ikon and we have used it at Sugarloaf and Sunday River and would like to use it at Big Sky.

just give me a pass with both Sugarbush and Ragged Mountain on it and shut up and take my money.