Our View: Intrawest looking forward

Advertisement

Steamboat Today editorial board — May to September 2014

  • Suzanne Schlicht, COO and publisher
  • Lisa Schlichtman, editor
  • Tom Ross, reporter
  • Tyler Goodman, community representative
  • John Merrill, community representative

Contact the editorial board at 970-871-4221 or editor@SteamboatToday.com. Would you like to be a member of the board? Fill out a letter of interest now.

Intrawest didn’t tell us everything we wanted to know during its third-quarter earnings call this week, but the insights CEO Bill Jensen chose to share were enough to encourage us that the company’s recent stock offering, while modest in the amount of money it raised, will be used well.

Jensen told stock analysts this week that Winter Park and Steamboat together grew skier visits by 10.3 percent compared to the average growth of 4.3 percent for all Colorado resorts. So, which was it? Did Steamboat grow more than Winter Park, or did our friends 100 miles to the east, who benefit from upslope snowstorms, outperform us?

We get it, that’s a trade secret and the answer deliberately was obscured. But Jensen was frank in saying that the numbers for its resorts in Colorado likely benefited from the snow drought in the Sierras.

There’s much to like in what Jensen said, particularly about Steamboat and Winter Park enhancing each other by sharing expertise. Winter Park does more than $1 million in summer business thanks in part to more highly evolved mountain biking parks. Using that resort’s knowledge to do the same here holds the promise of a more vibrant ski base in summer that can capitalize further on our successful refurbishing of Burgess Creek.

The promenade along Burgess Creek has made all the difference at the base of the ski area in summer, but there’s more to a summer resort experience than strolling a path along a tumbling mountain creek. When people come to a resort, they expect to enjoy activities. The summer fun zone likely has boosted our net promoter score (people who would recommend a vacation destination to friends) with families who have children, but the ski base needs more activities for adults, and we’ll take whatever help Winter Park can offer.

If Winter Park is able to help Steamboat boost its summer revenues, that likely means more Ski Corp. employees working more hours of the year and a bigger payroll that turns over in the community.

Steamboat can reciprocate by exporting the success of its new Four Points Lodge to Winter Park. Jensen didn’t provide the food and beverage data to support it, he but told analysts that Four Points exceeded financial expectations. The customer satisfaction brought about by a successful new on-mountain dining experience may be more important to the rest of us than the revenue it brings in.

When it comes to Steamboat’s first season of night skiing, again, we don’t have the numbers, but anecdotally, we saw the fledgling operation begin slowly and gather momentum as the temperatures grew milder and the days got longer in late winter. By the end of the season, the Vogue trail was crowded on many evenings. Intrawest’s willingness to expand night skiing from three nights a week to five (again increasing payroll) confirms they are in it for the long haul.

Perhaps the biggest news of the latest earnings report is old news reaffirmed. Jensen reiterated that Intrawest continues to actively explore acquisitions (presumably with about $24 million from the stock offering) and added the insight that there is opportunity in the form of a generational shift that involves a significant number of privately held ski areas where the founding families are ready to move in a new direction (see the sale of Taos in autumn 2013 and the news this month that Snowbird, Utah, founder Dick Bass, 84, had sold a majority interest in his resort to the family that owns Park City Mountain Resort.).

Acquiring a smaller resort or two would allow Steamboat to leverage its involvement in the Rocky Mountain Super Pass Plus (with Winter Park and Copper Mountain) with new feeder areas that could benefit from its technology-driven resort management systems.

Intrawest hasn’t told us as much as we might have wished. We’re still dying to know how many night skiing tickets were sold and the impact Four Points Lodge and night skiing had on overall food and beverage earnings.

Still, we like what we are hearing.

Comments

Scott Ford 5 months, 2 weeks ago

For as long as I have lived here we seem to have an obsession about the number associated with skier days/visits. Without question it gives some sense of how busy the ski area was– but in reality it is none of our business as a community to know this number precisely. No more than asking a base area restaurant how many dinners they served. Or a downtown retailer how many cowboy boots they sold. The desire to know does nothing more than satisfies a general curiosity but nothing more.

In addition, the number of skier days is data that has a lot of “noise” associated with it. The number of skier days is not just visitors. This is because in the number of “skier days” is mix-up the local population, part-time residents and perhaps even Ski Corp employees that get to their job on the mountain via the lifts.

If one is so inclined a “ballpark” estimate of the number of skier days associated with visitors can be developed by looking at the number of passengers arriving at YVRA. During the 2012/13 ski season (Dec-Mar) there were 71,162 deplaning passengers. Intercept surveys show about 85% of these folks are destination skiers. (The other 15% are locals/part-time residents/business travelers and a small segment that traveled here during the winter, however, do not ski).

A typical destination visitor skis 4.5 days during their visit. This alone would account for about 272,000 skier days in the 2012/13 season. It is necessary to add to this number those that drove/shuttled here. This needs to be a reasonable assumption. I think it is reasonable to assume that driving here accounts for something between 25% and 50%. Splitting the difference let’s assume that 38% of the destination skiers drove/shuttled here. This group likely ski fewer days because of the travel time – so let’s assume 1 fewer day skied or 3.5.

Putting all this together it is possible to estimate the number of skier days associated with just visitors to be in the 350,000 to 400,000 range. Is this number perfect? No way but it is in the “ballpark” and is likely close enough to satisfy our curiosity associated with a number which is none of our business to know precisely in the first place.

0

Neil O'Keeffe 5 months, 2 weeks ago

Scott, I thought it was regular practice for ski areas to post their skier days for each season. In my mind that number was/is always padded to include not only locals and employees but also free/comped tickets and what ever else they can come up with to create a more impressive or consistent number similar to previous seasons.

0

Scott Ford 5 months, 2 weeks ago

Hi Neil – There was a time that most ski areas in Colorado did report their skier numbers. They did so as a part of the trade association, Colorado Ski Country USA. This number was useful when viewed on a national/statewide basis.

If memory serves me correctly it typically showed year after year that of the 50 million skier days nationally that Colorado ski areas captured in the range of 11 to 15 million of total skier days and the Steamboat Ski area reliably captured about 8% of the total Colorado skier days.

This number had some usefulness if for nothing more than comparability. The challenge was that not everyone counted the same way so there was always a great deal of variability associated with the number.

However, when Vail Associates withdrew from the Colorado Ski Country USA they no longer provided skier numbers for the areas they owned in Colorado. (Vail, Beaver Creek, Keystone and Breckenridge). At about the same time the trade association would only release aggregated skier visit numbers of their 21 member resorts.

For the 2012/13 season they estimated that Colorado as a whole had about 11.5 million skier visits and that the 21 trade association member resorts had about 6.4 million skier visits.

My guess is that sometime in mid-June that Colorado Ski Country USA will release the aggregated number of skier visits for the 2013/14 season. This will be an interesting aggregate number when it is released and I am sure that Lisa will be on the lookout for it.

0

rhys jones 5 months, 2 weeks ago

Neil -- Working employees go through their own line to the gondola, and are recorded on their own scanner, so their numbers do not go in to the skier-day totals, nor do they have to wait in line.

0

Neil O'Keeffe 5 months, 2 weeks ago

But what about employees that are off the clock? I am assuming most of them wait in line and do get their passes scanned the same as the general public. I wasn't actually thinking about employees on the clock but thanks for pointing that out.

0

rhys jones 5 months, 2 weeks ago

It's hard to argue that off-the-clock days are not "skier-days" -- there has got to be a cash value attached, it does cost money to staff and run those lifts, so there is a cost to the Ski Corp involved, same as any other skier. The employee pass is a cash benefit (not to mention the locker at the base, worth at least as much). Ski Corp realizes a benefit for those days -- the employee's labors -- which is how the employee earns those days -- It IS a skier using the facilities for recreational purposes -- why should it not be counted?

0

Scott Wedel 5 months, 2 weeks ago

Scott Ford,

Though, a restaurant does not control a multi-million taxpayer supported airline subsidy program.

The ski area may have proprietary reasons to want to not disclose skier days or whatever other measurement, but they also need to make the argument that the airline subsidy program is working or risk losing taxpayer support. The articles on the airline subsidy program for the past three years only mention the percentage decline in passengers without ever giving the number of passengers

As far as I can tell from the 2011 passenger number and then applying the percentage decreases, it was about 78,400 in 2012, about 73,600 in 2013 and about 70,800 this year. That is less than half of what was promised in the campaign for the tax. Taxpayer subsidy per passenger appears to be $43.

I;d be surprised if ski area continues this lack of transparency when seeking renewal of the airline subsidy tax.

0

Scott Ford 5 months, 2 weeks ago

Good Morning Scott W. - The LMD is a whole different "kettle of fish" and beyond the scope of what is being discussed in the postings above. Related to be sure - but different.

0

rhys jones 5 months, 2 weeks ago

Mornin' all!! Just thought I'd drop in for my usual digression/regression/obfuscation...

While skier-days are a nice feel-good number, I submit that they are of little relevance to the vast majority of support workers -- we're talking cooks, maids, drivers, bartenders, servers, dishwashers, lift ops, store clerks, hotel workers -- everybody is slammed, even in a "bad" year -- and a 10% swing one way or the other is barely noticeable, to us -- only to our bosses, and how much they bank this year.

This article is about Intrawest and where they're going, and I can't complain about any of their recent enhancements, Four Points and night skiing tops on the list.

I do miss the old quarter ski racks, though... six bucks a day for storage, blah. No longer can the ski bum leave them there for days. Any chance to make a buck, I guess...

0

Scott Wedel 5 months, 2 weeks ago

The more relevant number for buyers of company stock is revenue per skier day. Selling ski passes to people that ski 50+ days is not great business. It doesn't bring additional revenues if the increase in skier days is from locals making more of an effort to ski more days.

The more relevant number to SB service workers is the SB sales tax numbers.

0

Scott Wedel 5 months, 2 weeks ago

Skier days was once announced with fanfare to promote the popularity of the sport. That the millions of Colorado skier days suggested that everyone in Colorado was skiing. The skier days affirmed skiers that they were participating in a popular sport. Similar to how McDonald's used to say how many billions of hamburgers had been sold showing their popularity.

I think Vail stopped reporting because they don't want to tell the competition the mix of their seasons pass sales and how it is directing skiers to which of their resorts. (Only get so many days to ski at Vail Mountain on some passes). Their season pass sales has become a key business strategy which they say is 55%-60% of their overall lift revenues. So they've booked most of their lift revenues before ski season. Thus, largely protecting themselves from bad weather like this year at Heavenly and tend to get those pass owners to book vacations at other Vail owned resorts.

0

Requires free registration

Posting comments requires a free account and verification.