Our View: Intrawest looking forward
May 18, 2014
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.
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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.