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Condor Capital Management's 2016/17 Ski Season Wrap-Up: Ski Resorts Gear Up for a Multi-Pass Showdown
Although there are still some slopes to be conquered, many skiers and snowboarders can agree that the 2016/17 season turned out to be quite a success. According to Ken Schapiro of Condor Capital Management, resorts across the United States were able to benefit from a flurry of winter storms that arrived just in time for the holidays, translating to 30% and 4% increases of total skier visits from last season for the months of December and March, respectively. Overall, average resort snowfall increased 36% from last season. Accordingly, recent figures by the National Ski Areas Association (NSAA) showed that nationwide skier and snowboarder visits rose to 54.7 million, a 1.5% increase from 53.9 million during the 2015/16 season.
The majority of ski regions throughout the U.S. posted solid skier visits, with the Pacific Northwest having its best season on record (4.4 million skier visits). Similarly, the Rockies region ended up having its second-best winter in terms of skier visits (21.7 million). However, not every resort in the area was able to weather the lack of early season storms, with Vail Resorts (Vail) posting a 2.8% decline in skier visits for the season (while revenue was up 7.4%). Interestingly, the dearth of early winter weather in the Northeast staged a major turnaround, with 27% growth in skier visits from last season. In the Midwest and Pacific Southwest regions, there were slight declines in skier visits. In spite of this minor drop in visits, resorts surrounding the Sierra Nevada have been pummeled with snow storms, leading to snowfall totals of over 500 inches in many resorts, and prompting Californian resorts such as Mammoth Mountain and Squaw Valley to extend their seasons.
While weather has certainly been an important aspect of the season, it has arguably been overshadowed by recent developments regarding the consolidation of some of the most notable resorts in the U.S. On February 21st, Colorado-based Vail Resorts acquired Vermont's Stowe Mountain Resort, one of the oldest and most prominent resorts in America. This acquisition further enforced Vail's intent to grow its resort portfolio and will give owners of Vail's Epic Pass access to yet another premier skiing destination. Owners of the Epic Pass have unlimited access to several of Vail's premier locations, including Park City in Utah and Colorado's Breckenridge, as well as five complimentary days to Whistler Blackcomb in Canada, a world-acclaimed resort that Vail acquired in the summer of 2016.
However, Vail is not the only company looking to increase its resort offerings. On April 10th, a partnership of Colorado-based Aspen Skiing Co. and private equity firm KSL Capital Partners agreed to acquire the owner of popular resorts such as Blue Mountain and Steamboat, Intrawest Resort Holdings Inc. (Intrawest). In addition to Blue Mountain and Steamboat, Intrawest is the owner of the Mont Tremblant (Canada), Winter Park (Colorado), Snowshoe (West Virginia) and Stratton (Vermont) resorts. Two days later, the same partnership signed an agreement to acquire Mammoth Resorts (Mammoth), which runs four of California's most popular ski resorts: Mammoth, June, Bear and Snow Summit. Mammoth Resorts has a commanding presence in Southern California and will greatly enhance the offerings of this new entity. For perspective, Mammoth's four resorts combined had nearly 500,000 more skier visits last season than Aspen Skiing Co.'s four ski resorts.
With these two substantial acquisitions, it is clear that that the partnership of Aspen Skiing Co. and KSL Capital Partners is poising itself to be one of the premier options for destination skiers, while also furthering the pressures on "standalone resorts" that are unable to offer multiple resort experiences to guests. In addition to Aspen Skiing Co.'s four resorts, KSL Capital Partners owns two California resorts: Squaw Valley and Alpine Meadows. With these resorts, as well as the holdings of Intrawest and Mammoth, the new partnership will have a portfolio of sixteen resorts that attract approximately 7 million skier visits each season. While the portfolio of this partnership now outsizes the thirteen resorts that are currently in Vail's portfolio, Vail's resorts managed to attract a record 10 million skier visits last season. However, holders of Vail's Epic Pass may want to take a closer look at their pass selection for the upcoming season, as multi-resort passes such as the Mountain Collective and the MAX Pass have been on a mission to outmatch the resort offerings of Vail. The Mountain Collective pass boasts a total of 16 ski destinations such as Jackson Hole and Sun Valley for the 2017/18 season, as well Aspen and Mammoth resorts. Owners of the 2017/18 season MAX Pass are able to ski at a total of 44 mountains, which includes Killington and Big Sky resorts, as well as Intrawest's six resorts. While the resorts of Aspen, Intrawest and Mammoth are currently included in multi-resort passes, individuals can likely expect a multi-resort pass offering from Aspen Skiing Co. & KSL Capital Partners in the near future, which some skiers may view as an even better option to what Vail currently offers.
All in all, while next season's snowfalls may not reach the record levels that some regions have experienced this past season, the rapid growth of multi-resort pass offerings should leave many skiers and snowboarders optimistic for the 2017/18 season to come. This prospect, coupled with a consistently improving economy, could contribute to yet another strong gain in skier visits.
Condor Capital Management
Founded in 1988, Condor Capital Management is an employee-owned, SEC-registered investment advisor based in Martinsville, N.J. 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 visit http://www.condorcapital.com