In addition to 17,000 early layoffs of seasonal employees, Alterra Mountain Company has made the difficult decision to furlough many of its year-round workers and defer capital projects. Affected workers will remain employed with benefits such as health insurance but will not receive any pay for the foreseeable future. CEO Rusty Gregory will forego his entire salary as long as full time employees are furloughed. Employees in key roles who continue to work will receive full salaries for now. “While it is my fervent intent to avoid reducing anyone’s full pay rate for work going forward, we do not know how long this crisis will continue,” said Gregory in a letter to employees. “It is imperative that we ensure that our finite resources last long enough to get us to the other side of this pandemic and fully open for operation when the time comes.”
More than 50 percent of planned capital spending will be cut. In a sign of just how fast the coronavirus changed everything, Alterra announced $223 million worth of improvements just four days before being forced to shut down all 15 of its resorts. Postponed Alterra lift projects are both located at Mammoth Mountain in California, where Doppelmayr was slated to replace the mountain’s two oldest high speed quads with six place models. The Broadway Express and Canyon Express were constructed in 1988 and 1994, respectively. Alterra also announced last month the purchase of a Doppelmayr high speed quad for Tremblant, Quebec to be installed in 2021. The future of that project will be determined at a later date.
Boyne Resorts and Doppelmayr have reached an agreement to delay construction of two major lifts due to the Coronavirus emergency. Both Swift Current 6 at Big Sky Resort and Kancamagus 8 at Loon Mountain will now be constructed in 2021. “Proceeding with a complex and deadline sensitive construction project during the COVID-19 emergency would not be a prudent decision,” stated Troy Nedved, General Manager at Big Sky Resort. “Concerns about construction worker health and the unknowns related to the construction supply chain make the project too risky to undertake in 2020,” he continued.
Site preparation and limited construction may proceed this summer if public health conditions permit. Manufacturing of Swift Current’s components is nearly complete and the lift will be stored either in Wolfurt, Salt Lake or the Bozeman-Big Sky area until next year. When completed in 2021, Swifty will become the fastest six place chairlift in North America.
At Loon Mountain, skiers and riders will have to wait another year to ride the east’s first eight passenger chairlift, Kancamagus 8. “Although significant investment has already been made, we cannot proceed with a project of this scale knowing the COVID-19 situation could further complicate its installation – potentially cutting off the Governor Adams Lodge and base area from the rest of the resort next winter,” said Loon General Manager Jay Scambio in a letter to season passholders. “This postponement allows us to better support our team, our guests, and the greater Loon community at a time when it is needed most.” Permitting and planning will continue in preparation for 2021 installation.
I spoke with Boyne Resorts President Stephen Kircher this morning about the decision and his outlook during this challenging time. The company will closely monitor impacts on summer business as well as season pass sales and proceed accordingly. “We are going to be assessing our capital projects each week,” said Kircher. “We’ve got milestones on every single project and last possible start dates to meet deadlines for next winter. We’re optimistic we are going to be executing a number of projects but we need to see clarity.”
As long duration, all-or-nothing projects, the two D-Line lifts had to wait. Boyne knew it needed to be underway this week at Loon and within two weeks at Big Sky in order to meet aggressive construction schedules. Bubble lifts by definition include carrier storage buildings that are as complex to build as the lifts themselves. “What happens if work stoppages occur again in the middle of summer or the fall?” lamented Kircher. “Once we tear the existing lifts down, we’re at risk. We would be dead in the water [without Swift Current or Kancamagus.] The second worst thing other than this shutdown would be not having a key lift coming out of the base next winter.”
Boyne’s decision is the second such deferral among North American multi-resort operators this week. On Wednesday, Vail Resorts delayed seven different lift projects with two different manufacturers in order to cut costs. Kircher acknowledged his decision was difficult for both customer and supplier but in some ways proved clear. “We are working with a great partner in Doppelmayr. Obviously they are dealing with a lot of difficult conversations across the planet,” he said. “We talked through what the best scenario was for both companies. They don’t want to be in a situation where they can’t finish a lift either. I want to install a lift that we own and is sitting in warehouses more than anybody but it’s just not prudent.”
Ski industry fallout from the global pandemic continues. Vail Resorts today announced the deferral of lift construction projects slated for Beaver Creek, Breckenridge, Keystone and Okemo due to a dramatic decline in revenue, which is expected to continue into fiscal year 2021. The suite of projects was first announced last December, the same month COVID-19 first appeared in Wuhan, China. While the virus spread across Asia, lift manufacturers were gearing up to build lifts that now won’t happen this year. Beaver Creek had planned a major expansion into McCoy Park and Okemo earmarked a new bubble six pack for Jackson Gore. Both Breckenridge and Keystone planned new chairlifts to increase uphill capacity in high traffic areas.
Vail said weeks ago coronavirus will cost the company between $180 and 200 million in March and April alone. Eliminating lift construction, terrain expansions and discretionary base area improvements will save the publicly-traded company $80 to 85 million while allowing the vast majority of maintenance capital projects to proceed. “The circumstances surrounding COVID-19 are unprecedented and the financial impact to our Company and the broader travel industry has been significant,” noted Rob Katz, Chief Executive Officer of Vail Resorts. “We are taking proactive steps to align our capital spending and return of capital approach to ensure that we remain positioned for long-term success.” Other steps revealed today include the furlough of nearly all year-round hourly employees, suspension of the company’s shareholder dividend, salary reductions for non-hourly employees and elimination of cash compensation for the CEO and board of directors.
As the impacts from COVID-19 continue, it's becoming less clear when our business may reopen. Because of this and to ensure we navigate the financial challenges ahead, we have made some difficult decisions that affect our employees. More from our CEO: https://t.co/7EmbUl3v0cpic.twitter.com/CDcwtUYqQ7
The decision to postpone lifts is a blow to both major lift manufacturers but particularly Leitner-Poma, which like Vail itself, is Colorado-based. The firm had been awarded contracts to build three detachable chairlifts and move another this summer. Doppelmayr USA had planned to install the two machines at Beaver Creek.
As goes Vail, often go others. While I’m hopeful some lifts (and the jobs that come with them) are safe, more deferrals are possible. Rival Alterra Mountain Company planned to add only two lifts this year, both six place chairlifts at Mammoth Mountain. The privately-held group has not announced any changes to its capital plan thus far. In tough times, every company is understandably revisiting capital budgets and commitments, however.
The sudden onset of such deep uncertainty in this critical period of the lift production cycle is unprecedented. With the elimination of Vail Resorts projects for 2020, announced US and Canada complete new lifts stand at 24, fewer than Doppelmayr built by itself last year.
Citing continued losses and economic uncertainty, the owner of Ski Blandford is pulling the plug on one of the oldest ski areas in Massachusetts. Owner Jef Murdock, who also operates Ski Butternut, purchased the closed Blandford in 2017 and invested significant dollars to upgrade the mountain’s lift and snowmaking systems in advance of the 2018-19 season. Prior to that, the nonprofit Springfield Ski Club ran the area for 80 years. “Our goal was to keep the ski area operational and to grow the sport of skiing and riding,” reads a letter to passholders from Murdock and general manager Ronald Crozier. “However, after all of this hard work, we are still losing money. Unfortunately, Butternut cannot continue to support the losses we have experienced at Blandford. When you add present economic uncertainties to the mix, we are forced to make a very hard business decision. With much disappointment, we are announcing the closure of Ski Blandford.”
Ski Blandford featured three Hall chairlifts built in 1969, 1971 and 1978. Two of them recently received new control systems and other upgrades.
West Virginia’s first six passenger chairlift is coming to Timberline Mountain. Despite the coronavirus situation and surrounding uncertainty, Chip Perfect and his team today announced a $10+ million commitment to reopen the mountain by the end of this year. Timberline closed in the middle of the the 2018-19 season following years of financial challenges. Perfect purchased Timberline out of bankruptcy last November and his ownership group brings four decades of experience running Perfect North Slopes, Indiana. The West Virginia mountain is a hidden gem, featuring one of the highest natural snow totals and largest vertical rises in the mid-Atlantic.
The thousand vertical foot six pack will travel from base-to-summit with a ride time under six minutes. A Doppelmayr fixed grip quad will service lower mountain beginner runs, a terrain park and slopeside lodging. Other improvements will include a re-graded learning area with a conveyor carpet lift, extensive upgrades to the snowmaking system, a fully remodeled rental shop, consolidated food service facilities and an updated outdoor arrival area. “We look forward to participating in the economic development of Tucker County and we’re excited to announce the significant investment in Timberline Mountain’s infrastructure that will take place this summer,” said Perfect, who is both President of Perfect North Slopes and CEO of Timberline Mountain. “I believe skiers and snowboarders next season are going to really enjoy the new experience on this very special mountain.”
One positive of the mid-Atlantic’s low-snow winter was the ability for Perfect’s team to get to work quickly. The mountain’s three Borvig and Heron-Poma lifts are already gone with many of the chairs in the hands of loyal Timberline guests. All three new lifts are expected to be complete in time for the mountain’s grand re-opening.
Skyline Investments, owner of two ski resorts and many other hospitality businesses, reports record revenue but warns Coronavirus will have significant impacts including the possible closure of resorts through summer.
Vail Resorts has made the difficult decision to suspend operations of all its North American mountain resorts beginning March 15 through March 22. Please read this letter from our CEO Rob Katz. https://t.co/8082XVtCFr
North America’s ski industry is following in the unfortunate footsteps of its counterparts in Asia and Europe, forced to end winter operations early to help prevent the spread of the novel coronavirus. Among the first to pull the plug the past two days were Berkshire East, Jay Peak, Taos and Nub’s Nob.
What started as a trickle became a deluge Saturday. In Colorado, Governor Jared Polis issued an executive order compelling all resorts to close following outbreaks in Eagle, Pitkin, and Summit counties. Even before the order, the continent’s two largest resort companies almost simultaneously announced complete shutdowns effective tomorrow. The 37 Vail facilities will remain closed until at least March 22nd and will continue to pay scheduled employees. Many independent mountains are staying open for now.
Alta Ski Area will be suspending operations starting Sunday morning, March 15, until further notice to limit the spread of the COVID-19 (Coronavirus). Lift operations, food service and retail and rental services will be closed.
This is uncharted territory but I’m certain the ski business will be okay. Unlike other industries, we are used to doing this between seasons, albeit under very different circumstances. The United States government has promised help to small and mid-sized businesses along with hourly employees who are missing work and pay. Canada and governments around the world will likely do the same. Hopefully many full time, year rounders can keep working and get important maintenance done.
We are skiers at heart and understand the therapeutic nature of our shared passion. But, by order of the Governor of the State of CO, we are closing all ski operations immediately and ancillary businesses over the next week. Please view full details here: https://t.co/xj2Diz5rmg
Normally March on this blog features announcement after announcement of exciting new projects from lift manufacturers and their customers. At this point, already formalized projects are pacing about the same as last year and none have been publicly canceled. Hopefully production can continue and this mess abates in time for construction to get going as snow melts. There are many unknowns, however.
Those of you on Instagram know I’m in one of the world’s most amazing places right now: Alaska. Operations at resorts were normal across the board the past few days and the weather was perfect in a state with only one confirmed case of COVID-19. Tomorrow I will attempt to fly home and reassess. As of this writing, Jackson Hole intends to stay open and I will be in on Monday if there is work to go to.
With so many resorts shut down and the global economy struggling, there may not be much lift news to report for awhile. When there is, I’ll write, and will get back to exploring as soon as I can.
Vail Resorts reports financial results: skier visits are down 5.3 percent percent this season through March 1st but lift revenue is up 0.8 percent. On a conference call, CEO Rob Katz addresses coronavirus, lift lines at Vail and possible future acquisitions.
Timberline Mountain promises to make multiple big announcements at a media event Tuesday. All three existing lifts are in poor condition and being dismantled.
Arctaris Impact Fund doesn’t expect to realize a profit on its Saddleback investment until it sells the resort in 7-10 years.
An enterprising family is building the first Australian-designed and manufactured chairlift in 30 years for private use only.
Alterra Mountain Company CEO Rusty Gregory will deliver a keynote address on Monday in Park City covering the rise of Alterra, industry consolidation and multi-resort pass products.
For the second time in three weeks, a sudden stop on the Mont-Sainte-Anne gondola elicits an emergency response and the lift is once again closed indefinitely.