killington cancelling lifetime passes

[riverc0il]

On their web site, I see $525 for a regular pass (very similar to last year, iirc) and $305 for student (up from $200ish last year?). The increase in the student pass is quite large. Interesting they would make such a large jump and leave Jay a huge opening to completely steal the market away with a better product and potentially cheaper price. Last year, Burke was only slightly more expensive than the Jay student pass. Only $199 for the student living in the NEK though.

I think I see... the student pass is only good for those up to age 24. Sorry Boss, I know that stinks for you. Based on BobR's original post, I thought there was a significant increase across the board. How many ski areas offer student discounts to those over 24 going to college?

BTW, Burke's new web site sucks. The fixed vertical pane requires a huge amount of scrolling with a tiny window for reading text and the front page's flash animation covers up the navigation links (on the latest version of FF).

 

[bobbutts]

...And as far as the bad PR issue, I say good idea for getting it out of the way with up front. If they wanted to do it, nice to be done with the issue and now they don't have to worry about something in the closet. They can start focusing on some good PR with the ugly stuff done right out of the gate.

I think you are underestimating how sensational this story is. I expect it to eventually make its way from forums to conventional media. The headline, "New Killington owners cancel Lifetime Passes" IMO really stings. My wife who knows nothing of the situation and doesn't care about Killington let out an OMG when I told her about this, which to me is a good indication that the story would be interesting to outsiders.

On another subject, how many resorts have lifetime passes? Anyone else aware of any others?

 

[Greg]

I expect it to eventually make its way from forums to conventional media. The headline, "New Killington owners cancel Lifetime Passes" IMO really stings.

http://www.rutlandherald.com/apps/pbcs.dll/article?AID=/20070518/NEWS04/705180371/1002/NEWS01

Notice the K-zone mention. While ski forums like AZ and K-zone probably only represents a small percentage of actual skier visits, I believe we are a growing and somewhat influential contingent.

 

[thetrailboss]

On their web site, I see $525 for a regular pass (very similar to last year, iirc) and $305 for student (up from $200ish last year?). The increase in the student pass is quite large. Interesting they would make such a large jump and leave Jay a huge opening to completely steal the market away with a better product and potentially cheaper price. Last year, Burke was only slightly more expensive than the Jay student pass. Only $199 for the student living in the NEK though.

Yep, I have noticed this as well. Jay and Cannon are going to eat Burke's lunch.

I think I see... the student pass is only good for those up to age 24. Sorry Boss, I know that stinks for you. Based on BobR's original post, I thought there was a significant increase across the board. How many ski areas offer student discounts to those over 24 going to college?

Very good question. Burke is the ONLY major ski area in VT/NH that I have found that has such a low age requirement. Okemo USED to restrict it to 25 years old. They have now pushed that limit to 29/30. So now the only ski areas are Burke and Okemo. All others simply say that if you have ID and valid verification of enrollment you get the discount. Ascutney also used to have a low ceiling. They eliminated that in 2006 in order to get the grad students at Darmouth and VLS.

For the record to, I might add that Stowe, Sugarbush, MRG, and Killington all actively sell to Vermont Law School students through student agents. Ascutney, Okemo, Sunapee, and Whaleback have been actively marketing to VLS students as well.

In 2005 I contacted Burke several times to see if they would like me to sell passes to Dartmouth and VLS students as a student agent. I never received a response. They certainly could have made some money...maybe gotten a few students for little effort or money. I guess they are just not interested.

Right now Stowe's student pass option (at over $400) is a better value than Burke for me. That is pretty :blink: and

I have been in contact with Burke about this.

 

[SkiDork]

Here's the letter:

=====================================

May 10, 2007

Dear Pass Owner:

You are receiving this letter because our records indicate you currently hold the right to a season pass ("Pass") for the use of the Killington ski lifts as operated by Killington Ltd. (formerly known as the Sherburne Corporation). As you may already know, we are currently in the process of selling the Killington and Pico Ski Resorts, and contemplate that the consummation of such sale will occur shortly.

The Pass was a benefit you or your predecessor in interest, received for being an initial investor in Sherburne Corporation during the resorts infancy. The specific language in your stock or bond certificate granted you "a pass entitling the holder to use free all ski lifts operated by the corporation in Killington Basin so long as the [Sherburne] corporation shall operate in that area under the agreement with the State of Vermont." When the resort changes ownership as part of this sale, Killington, LTD will no longer own or operate the lifts at the resort. Thus, at the time of the transfer of ownership, your Pass will expire and the new Owners have no obligation to honor your pass.

If you are wondering why the rights under your pass survived the last sale of the resort it is because when we acquired Killington, we acquired the stock of Sherburne Corporation's parent (which owned other resorts in addition to Killington) and therefore Sherburne Corporation continued to operate the resort under an agreement with the State of Vermont, unlike in the current contemplated sale, where the new owners are acquiring the assets of the Killington and Pico Ski Resorts.

Notwithstanding that your pass benefits will expire upon the sale as noted above, we have been informed by the new owners that they have decided to offer you the following benefits for the next two ski seasons:

1) 2007/2008 ski season: You can obtain a complimentary season pass
1) 2008/2009 ski season: You can obtain a complimentary season pass subject to certain blackout dates as to be determined by the new owners prior to the 2008/2009 season
3) These passes will not be valid for summer or foliage lift access.

We have been informed that the new passes remain subject to the resort's existing policies and procedures. To obtain your new pass, we have been told that you must present your original certificate and photo identification to the season pass office at Killington on or before October 8, 2007. Additionally, we understand restrictions on transferability will be as follows:

A. New passes issued to holders of certificates that permitted a single transfer during the lifetime of the Pass holder will remain with the present holder and may not be transferred.

B. New passes issued to holders of certificates that permitted a transfer each year to a new holder may be transferred, however, the Pass holder must select one individual who will be the recipient of that pass for the next two seasons (the 2007/2008 and the 2008/2009 season). This election must be made in writing to the season pass office at the Killington Resort on or before October 8, 2007, otherwise that pass may not be transferred.

The Bank of New York will not be the transfer agent for the issuance and distribution of new passes.

We appreciate the many years of support that you have provided us and are confident that the new owners will continue to make the Killington and Pico Ski Resorts a premier ski destination on the East Coast. Any questions about the new owner's program should be addressed to the Killington Season Pass office at (802) 422-6868 (Option #7).

Pleas note: the Killington Season Pass office will be closed until August 6, 2007

Sincerely,

Allen W. Wilson
President

 

[ski_resort_observer]

This is what I have been able to find out so far about the history of the "lifetime passes" at kmart.

The original lifetime passes issued with the early stock offering in 1957 at $250 a share had a sale inducement of a lifetime pass for each of four shares bought. These original stocks and the accompanying "lifetime" passes are the most coveted as they can be resold every year, most were tied up by the original investors in Killington about 75 investors on record of November 1957.

There is a second type of "lifetime passes" that can only be re-sold once, these were issued during stock offerings in 1961, 1965 and 1967.

I think Powdr is between a rock and a hard place here. They know that the A41 passes were a financial disaster in that the skier visits dropped nearly 20% from last season(05/06) vs the previous season. No other resort in Vermont except Mt Snow saw such a dramatic drop. Okemo reported a nice increase during the same time period to go past Mt Snow with skier visits topping 600,000 and become the 2nd busiest resort in Vermont. Kmart went with the Walmart business model and it did not work. Alot of longtime kmart skiers who are not so price sensitive went elsewhere.

They have to turn that around and increase the revenue per skier visit to succeed. I guess dropping the lifetime passes is part of that. Obviously the inclusion in the P&A that they continue to honor the LT passes is a sticky wicket that has to be resolved.

It's pretty easy from where we sit to conclude that allowing the LT passes to continue to be honored is an easy positive PR thing to due but in such a competitive business every dollar counts as evidenced by the hassle we now all have to endure by having our passes scanned everytime we get on a lower lift in the hopes of catching a few people who misuse the system.

I suspect that the large amount of views is more from people seeking info about season passes than lifetime passes. I also feel that Powdr will not raise season passes to market value next season but try to seek a more common ground approach by pricing them somewhere between the two prices but after capital improvements are online they will have no choice to go with market value which is around $900 with blackouts and $1200 without.

 

[JimG.]

I am surprised that you and Jim G downplay the significance of this site. Is it the NY Times? No. Of course not.

I'm not underestimating the significance of this site...I don't even think about that.

I downplay the siginificance of this particular event, and I downplay the reaction to it that many of you feel will be extensive.

Plus I'm a moderator and I want to stimulate posting on the topic. Thanks everyone!

 

[Greg]

I didn't read through this whole thread, but does anyone have any indication how many lifetime passes were issued? The number must be significant for Powdr to risk such ill will, no? I mean is just honoring the passes really going to affect the bottom line all that much?

 

[JimG.]

I didn't read through this whole thread, but does anyone have any indication how many lifetime passes were issued? The number must be significant for Powdr to risk such ill will, no? I mean is just honoring the passes really going to affect the bottom line all that much?

Sorry in advance to those who are affected by this, but where is this outpouring of ill will coming from? Like dmc said before, there are many folks who could care less about people who own fancy ski condos and who drive big BMW SUV's north every weekend to ski with the beautiful people losing a lifetime pass.

Come on, let's get real here.

 

[skiadikt]

This is what I have been able to find out so far about the history of the "lifetime passes" at kmart.

The original lifetime passes issued with the early stock offering in 1957 at $250 a share had a sale inducement of a lifetime pass for each of four shares bought. These original stocks and the accompanying "lifetime" passes are the most coveted as they can be resold every year, most were tied up by the original investors in Killington about 75 investors on record of November 1957.

There is a second type of "lifetime passes" that can only be re-sold once, these were issued during stock offerings in 1961, 1965 and 1967.

... and i'm pretty sure the number of those yearly resaleable passes is in the thousands. during my first season at k, i found that everyone in my ski house was buying one of these yearly bond passes usually for $100-200 below the k early bird price. after that, i never bought a pass from k until the a41. there were a number of businesses on the access who brokered these passes and the supply seemed pretty limitless. some of these folks made tens of thousands (maybe 100k+) from these sales yearly. not that they get my sympathy but if anyone, they're going to be ones hit the hardest.

the pr fallout among individual skiers is minimal. few to none are going to take their business elsewhere. but the biggest problem may turn out to be those folks on the killington town board who got screwed by this, whom sp land may have to go through to get approvals for their various expansion projects.

 

[Greg]

Sorry in advance to those who are affected by this, but where is this outpouring of ill will coming from? Like dmc said before, there are many folks who could care less about people who own fancy ski condos and who drive big BMW SUV's north every weekend to ski with the beautiful people losing a lifetime pass.

Come on, let's get real here.

Whether it's justified or not, there is ill will, at least online... But now we have the Rutland Herald article so it's made its way into the mainstream media. Perhaps Powdr didn't anticipate such fall-out?

 

[JimG.]

But now we have the Rutland Herald article so it's made its way into the mainstream media. Perhaps Powdr didn't anticipate such fall-out?

I'm sure they did and appreciate that we all continue to rack up the post count. Who knows, maybe the NY Times next?

Brilliant!

 

[Greg]

I'm sure they did and appreciate that we all continue to rack up the post count. Who knows, maybe the NY Times next?

Brilliant!

Any publicity is good publicity?

 

[ctenidae]

Any publicity is good publicity?

I was going to say that, in this case, that may not be true.

I'm really only interested because of the insight this gives into the minds of the new owners, SEC filing regulations, and that sort of thing. It's also a good look at "going private" transactions, and some of the problems they entail.

 

[JimG.]

Any publicity is good publicity?

It's bad publicity only if alot of folks really care about the issue...those folks are probably concentrated here more than most places since it is a ski forum. The "outcry" here seems pretty small to me...the discussion is mostly about legal issues.

But out in the real world? There aren't enough skiers who really care about this to make it bad publicity.

 

[thetrailboss]

I didn't read through this whole thread, but does anyone have any indication how many lifetime passes were issued? The number must be significant for Powdr to risk such ill will, no? I mean is just honoring the passes really going to affect the bottom line all that much?

To answer your question approximately 250. Many are folks from KZone and many are local business people on the Access Road who have some clout and some say.

 

[ctenidae]

To answer your question approximately 250. Many are folks from KZone and many are local business people on the Access Road who have some clout and some say.

...who HAD some clout and some say, you mean.

 

[SkiDork]

To answer your question approximately 250. Many are folks from KZone and many are local business people on the Access Road who have some clout and some say.

I'm not so sure that number is correct. That may be the number of original multi-transferrable bonds, but there were subsequent single transfer bonds issued which are also in this same situation, if you add those the number is probably significantly higher.

 

[Greg]

Looks like the AP got it:

http://news.google.com/news?hl=en&ned=us&ie=UTF-8&q=killington+lifetime+passes&btnG=Search

 

[threecy]

Those two letters, the original letter and the termination letter, put it in clear language. Powdr appears to have no obligation to continue to allow those passes (again, those passes involved investment in the original corporation - which the buyer paid fair market value for - ASC received these funds). It's one thing to give away a few thousand dollars for PR - as Powdr is by honoring these passes for 2 years (200 passes X say $500 = $100,000!), but its another for them to let $1,000,000 in passes float around over the next few years for free - as a corporation, the buyer would not be doing what's best for their shareholders. If I were a shareholder and I knew my company was letting $1,000,000 or even $500,000 go, I'd be furious!