Monday, October 17, 2016

Vail's Empire

In its latest issue Skiing History Magazine has a wonderful article written by Seth Masia, that brings a comprehensive beam of light over the recent purchase of Whistler/Blackcomb by Vail Resorts.

This announcement that followed the purchase of Park City and Perisher Valley in Australia, made the entire company the second-largest in the world by acreage and the largest in the world in terms of revenue and the largest ski resort operation in North America in terms of size and revenue. Seventy-five percent of Whistler was purchased for $1 billion (the rest being still owned by Nippon Cable), making it the most expensive ski resort purchase ever.

It is also the only mountain resort in North America that is profitable all summer and that is extremely easy to access from anywhere in Asia. Vail's expansion began in 1980 with Beaver Creek and today the company controls 13 resorts, covering about 45,000 acres (18,000 ha) in three countries—the United States, Canada and Australia.

In terms of sheer size, this makes it only second only to Compagnie des Alpes which manages 11 ski resorts in France covering more than 125,000 acres (50,000 ha). Today, Vail Resorts is on track to post more than $1.65 billion in revenue for the next ski season, on more than 10.6 million skier-days. It’s about 15 percent of all skier-days in North America.

Revenue is another story all together, since it's twice Compagnie des Alpes' (695.6 million euros, or $785 million) on 13.6 million skier-days. True, the European behemoth gets only lift-ticket revenues, while Vail Resorts can count on food service, ski school plus both retail and rental operations. 
Where Vail was savvier than its competition though, was how it pushed the same-day ticket-window purchases steadily higher to make its universal season pass more attractive. When a day pass costs $175, it's easy to get skiers to buy its $809 season pass instead.

 In 2015-2016, Vail sold 500,000 season passes, valid at each one of its resorts which represent 40% of all season passes sold in North America. These season pass sales also represent 40% of the company’s ticket sales, and 15 percent its revenue!

The idea is simple: lock-in the market share and keep the Epic Pass skiers within the resorts that it owns forcing competitors to scramble for multiple-resort deals of their own...

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