Alterra Mountain Company has reached an agreement to acquire Arapahoe Basin, Colorado from Dream Unlimited, a Canadian developer which has owned the Basin since 1997. Alterra did not disclose the sale price but Dream Unlimited said in a release that “management believes this sale will result in after-tax profit of CA$110 million” before closing costs and adjustments. Under Dream, Arapahoe Basin nearly tripled in acreage and replaced its entire lift fleet. “Arapahoe Basin has been a great investment for Dream and one that we are very proud of,” said Michael Cooper, Chief Responsible Officer of Dream. “We have had the honour of taking care of this Resort over the last quarter century, with a constant commitment to the visitor experience. We are thrilled that Alterra recognizes and shares the same values and will continue to foster its unique and incredible culture.”
Arapahoe Basin will become Alterra’s 18th owned destination in North America and third in Colorado when the sale closes later this year. Veteran Chief Operating Officer Al Henceroth will continue to lead A-Basin under Alterra and guide the next phase of capital improvements, to include expanded snowmaking and parking. Henceroth noted on his legendary blog that “it has been a wild and fun 27 years, but it is time for the next step. Through the Ikon Pass, Alterra has created a partnership of the greatest resorts in the world. They know and understand The Basin and are enamored by its culture and vibe. I think they are the best team to help us through our next phase of growth and maturation.”
A-Basin partnered with Alterra to join the Ikon Pass in 2019 and Ikon access will remain unchanged for the current season. In Colorado, Ikon offers unlimited access to Copper Mountain, Eldora, Steamboat and Winter Park along with limited access to Aspen Snowmass and Arapahoe Basin. “Arapahoe Basin is considered legendary for a reason,” said Jared Smith, President & CEO of Alterra Mountain Company. “From its unparalleled terrain, to its commitment to sustainability, A-Basin has a team that has a passion and commitment for this unique place and its traditions, making it an ideal fit for the Alterra Mountain Company family.”
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On the ground, this likely means not much changes. Where A-Basin needs to make improvements is with parking since that’s their biggest limiter.
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I think that they won’t do too much to expand parking, or at least I hope they won’t, because parking limiting the amount of people on the hill is honestly a large part of what makes the Basin great.
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Next try to pry Kirkwood from Vail. Please.
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I wonder how much it takes for a resort to break free once its owned by someone like Vail or Alterra.
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The only time I can think of where a resort switched between big operators is when Crystal made its way from Boyne to Alterra. This was a very complicated situation and is unlikely to be repeated.
From what I remember hearing is that John Kircher wanted out of Boyne and gave up all his stake in Boyne to own just Crystal. He then turned around very quickly and resold Crystal to Alterra. Since Vail and Alterra aren’t family owned like Boyne I don’t see how anything similar could take place there.
So to answer your question, I think it would take a lot for a resort to break free from either of those companies.
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Powdr losing Park City to Vail was also very notable
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What about Whistler Blackcomb?
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I would think the only thing for either of these companies would be regulatory forces. One of them may give up a smaller resort if necessary to buy a larger one.
Like Alterra may give up management of Winter Park in order to buy Telluride if the Colorado government deems it so.
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Alterra owning {Winter Park, Steamboat, A-Basin, Telluride} seems less monopolistic than Vail owning {Vail, Beaver Creek, Breckenridge, Keystone, Crested Butte}.
Beyond that, Telluride is arguably in a different market than WP/A-Basin, since it’s much further from Denver. In fact, Telluride is further from the Front Range than Taos. A weaker but similar argument can be made for Steamboat. Almost no one is day-tripping there.
If Alterra had to spin off one CO resort to gain another, it would probably be the one they just bought. It likely has far lower revenue than Winter Park. That’s exactly what Vail did when they bought Keystone/Breck/A-Basin and began their empire building.
Last point is technical … i don’t think the state government would be the most likely entity to intervene. When Vail was forced to spin off A-Basin, it was the Justice Department (Federal Government) that compelled them to do so. In the very special case of Winter Park, the City of Denver also potentially has leverage, as they own the resort. But it would probably be in Denver’s best interest not to antagonize the company they’ve successfully partnered with for so many years.
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One complicating factor though is Aspen/Snowmass. They are owned by KSL/Crown, which also owns Alterra. So maybe there’s a novel case to be made that this broader holding company would have an unprecedented concentration of resorts in a single ski region.
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Didn’t Vail Resorts buy PCMR from POWDR? I know POWDR isn’t as major as something like Alterra but it’s up there.
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No. Powdr failed to renew their lease on time and Vail gobbled up a new lease from the landowner.
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Powdr’s management never seemed to learn the importance of turning your assignbemnts in on time. Ended up loosing them perhaps one of the most lucrative ski resorts in the world.
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Kind of fits the bill for Powdr. They’re not malevolent as Vail or even Alterra, they’re just incompetent goofballs.
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Helamans warrior- without disclosing financial details or anything else sensitive, PCMR was not Powdr’s most lucrative property.
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If Vail/Alterra/Boyne, etc. owns a resort outright, the only way for that resort to “break free” is if the company decides to sell it.
It seems very unlikely that Vail will want to shed any of its western resorts in the foreseeable future; Epic is already an inferior product in the West and selling Kirkwood would only make it worse. They’d probably have to get into serious financial trouble (a la Intrawest or ASC) to start selling stuff. All we can do is dream about Whistler / CB / Kirkwood leaving the Epic pass…
If a resort is leased / operated by one of the big companies but owned by someone else (like Alterra with Winter Park) they could conceivably lose that lease and the resort’s new operator could change pass affiliation – like Powdr’s PCMR debacle. I think it’s safe to assume VR, Alterra, and Boyne are competent enough not to let that happen.
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I think there are a couple of scenarios where a resort could “break free.” One is if the resort in question perpetually loses money and some billionaire with more money than brains makes an offer on it. I could actually see that happening with kirkwood as I doubt it is very profitable (if at all). Several of the resorts in the VR and Alterra stables were part of package deals and included some money losers. June mountain, for example. Another scenario is where VR, Alterra, et al. don’t own a resort outright and there could be some sort of buyout option. I wonder if Nippon Cable has some sort of option based on their 25% ownership of Whistler. Finally, there is the scenario where the state or province they operate in becomes hostile in the regulatory sense and the operator decides to cash out. Again, I could see British Columbia or California doing this by restricting water rights or First Nations agitating for land use restrictions.
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Kirkwood loses money on paper but it prints Epic Passes. It is the only answer Vail has in California to Squaw’s expert terrain. Considering how many advanced/experts write off Northstar as a joke already, you remove Kirkwood and suddenly for a lot of people its the Heavenly season pass competing with other resorts (including Squaw+Alpine) one on one. Heavenly is going to lose that one a lot of the time.
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This is a fun thought exercise. The only way it happens is if one of the established operators wants to sell. There are a few scenarios where that would be the case.
Recently, Powdr sold Lee Canyon to MCP, maybe to generate capex funds for use at other resorts, maybe because it wasn’t profitable enough for them, maybe to remove a climate-burdened resort from their long-term portfolio. So that’s one situation where an operator would sell.
I think generating capex funds for use at other resorts is one of the likeliest scenarios in which you’d see a Vail sell a resort. I could also see Vail deciding to spin out a resort like Whistler, while maintaining a partnership of some kind, as a way to generate returns for shareholders.
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Vail once owned Arapahoe Basin for a brief time. They were forced to sell it back in 1997. https://www.justice.gov/archive/atr/public/press_releases/1997/1021.htm
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A big question will be whether Alterra moves A-Basin to a Steamboat like pass product with unlimited access for the full IKON or a Deer Valley model where you need a separate season pass for unlimited access. If it is the latter, I imagine it would be more than A-Basin’s current season pass.
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Really hope they remain on a 5/7-day model, with a separate season pass. A-Basin is a small resort, and relatively close to Denver. Granting unlimited access would dilute the experience, and ultimately the value to pass-holders. The current management has done an excellent job limiting pass sales and day tickets.
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There are reasons to think they’ll stick with it. In the past, Al Henceroth has said that A-Basin became more profitable when they moved from unlimited days on Epic to the 5/7-day on Ikon model. Guest experience matters. Also, Alterra seems to give individual resort GMs latitude on things like this (Crystal’s journey from unlimited on Ikon Base to only 5 days with blackouts is a good example).
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I was originally very upset about this announcement but I think I’ll just take a wait and see approach to see how this plays out.
When you step back, its not surprising that Dream was going to eventually sell A-Basin. Its the nature of their business / industry that I only know the very basic operating fundamentals. Real Estate holding companies buy and sell properties all the time and use the proceeds to fund other investments, etc. Its just like the board game of Monopoly. So we are at the point where there really only 2 (maybe 3) major players engaging the game of ski resort M&A activity currently.
Everyone knows that A-Basin has a unique culture, ski experience, terrain, and overall vibe. Alterra would be dumb to just “blow it all up”. I trust they aren’t that dumb. A-Basin can only physically change because of its location on the divide and in the USFS. So no, its not going to be condos, massive lodges, etc. The future potential changes/opportunities are already outlined in their most recent master plan.
Everyone knows parking / parking utilization is the biggest limiting factor the capacity of the mountain. We all saw what happen in later years being on Epic. I hope they don’t try to pull that.
I truly think there is no way can have A-Basin just all out fully unlimited on base Ikon, otherwise you will half of Denver showing up again every weekend or powder day which will result in full parking lots by 7:30am, traffic backups on US-6, cars parking along the highway, etc. A dangerous situation when you have all the tankers and hazmat vehicles flying up and down the pass.
I think the biggest fear and risk is that the A-basin die-hards and Summit County locals lose the “affordable” access they have to A-Basin. There is risk that the current value passes and relatively affordable A-Basin only passes go away. There are also a fair number of Summit County locals who have Epic passes (or employees of Epic Resorts) who also get A-Basin passes or multi-packs particularly for spring skiing. The risk is they can “forced” into buying a more expensive Ikon pass.
We shall see. The mountain is still going to be far too difficult for the average Franger or punter from Texas, it will still remain an expert playground.
I think at the end of the day it will just become a more expensive place to ski and like all other mega-resorts they will raise prices and find ways to extract more revenue from each skier.
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