Ski consolidation: Aspen buys Intrawest, Mammoth
This week the tandem of Aspen Skiing Co., which runs the four Aspen-area ski resorts, and KSL Capital, a private equity shop, has scooped up Intrawest for $1.5 billion, which includes Steamboat and Winter Park, and, in a separate deal, Mammoth Mountain, likely the largest ski resort by revenue not already part of the Aspen group or Vail Resorts.
The deal for Mammoth includes California’s June Mountain, Snow Summit and Bear Mountain. A price wasn’t announced, but it was likely north of $500 million. The resort group sold for $365 million in 2005.
Aspen's moves form a serious rival to Vail Resorts and its catalogue of ski mountains, including the recently added Whistler-Blackcomb, and will put to rest thoughts that Vail had grown too dominant. Vail's steady expansion, giving it control of more and more flagship ski resorts, has fueled growth for its Epic Pass, which grants skiers the right to ski any of its mountains. Vail sold 650,000 of the passes last season.
With its new portfolio, Aspen will surely market a rival season pass to Vail’s Epic offering, likely beginning in the winter of 2018-2019. And with Mammoth now in the fold, Aspen will have outmaneuvered Vail for the Southern California market, for which Mammoth is the drive-to home mountain.
Up until this point, the Mountain Collective, a pass put together by major independent ski resorts, including Aspen, has been a counterweight to the Epic Pass, but it doesn't offer the kind of unlimited skiing and the Epic Pass can.
A new pass with the reach of all the resorts belonging to Aspen and Intrawest will change the calculus of destination skiers. A New York family that was seeking a Park City Christmas vacation because it would dovetail well with a spring break trip to Vail might now also consider an Aspen Christmas trip, knowing that it could use its pass to go to Steamboat for spring break.
The ski resort business revolves around revenue captured during the Christmas - New Year's season, with the month of March — spring break — being the second most important period.
In building up the Epic Pass, Vail Resorts found a way to reach more and more of the destination skiers who spend large amounts of money during these two times of the year when kids are out of school and snow is on the slopes. Aspen's play could eventually lead it to pry some of that market from Vail.
Having another major multi-resort pass in the industry will only help skiers, as both resort groups will battle for buyers, which could push prices down, a happy benefit when a day pass at some Vail-owned mountains now touches $189.
Going forward, Vail Resorts and the Aspen group will likely look to bolster their portfolios by trying to purchase some of the remaining independent alpha resorts: Jackson Hole, Telluride, Snowbird and Sun Valley. This could mean the most sought-after properties could command premiums not before seen in the industry, with two major bidders now in the market. It's a startling change in the niche ecosystem of ski resort operators.
Other, smaller resort groups, such as Powdr, could also come into play as acquisition targets. Powdr owns Copper Mountain, which, if the Aspen deal goes through, will be somewhat of an orphan in central Colorado, boxed in by the two major operators in the space.
It's unlikely that this proposed deal will have a big effect on next winter, as next season's passes have been on sale for weeks at this point. But it is possible that some pass buyers could receive sweeteners before next season even kicks off.
Vail set a precedent last year when it granted Epic Pass holders some free days at Whistler-Blackcomb after acquiring the resort during the summer — a great perk for people who had already bought their ski season passes.
Outside of what this means to skiers, it may signal an upcoming IPO in the space. By partnering with private equity operator KSL, the owners of Aspen Skiing Co., the Crown Family of Chicago, may be signaling that it’s seeking liquidity on its ski assets sometime in the next few years. Most private equity companies are loath to hold on to assets for more than a few years, and the performance of Vail Resorts' stock — which has more than doubled since January 2015 — might have tipped KSL toward an opportunity.
Combined resorts of Aspen-Intrawest
Aspen Mountain
Aspen Buttermilk
Aspen Highlands
Aspen Snowmass
Steamboat
Winter Park
Tremblant
Stratton
Snowshoe
Blue Mountain
Christopher Steiner is a New York Times bestselling author of two books and the founder ofZRankings.com, a ski trip booking site.