So, who is Vail Resorts and what do they want with Stowe Mountain Resort?
The two companies reached agreement last month for Vail to buy Stowe’s ski operations for $50 million. The deal is expected to close fairly soon.
Vail hasn’t been talking about its specific plans for Stowe, but some insights can be gleaned from a profile of Robert Katz, age 50, CEO of Vail Resorts, written by Josh Dean and published in Men’s Journal.
Vail now owns 14 resorts that have a total of 305 lifts. They include The Canyons in Utah, bought in 2013, and neighboring Park City Mountain Resort, bought in 2014; Vail then merged the two into a huge resort called Park City.
That approach has led many local people to wonder if Vail also has its eye on Smugglers’ Notch Resort, just over the summit of Mount Mansfield from Stowe’s ski slopes.
The Park City deal cost $538 million. That was the priciest in the ski industry until last August, when Vail bought British Columbia’s Whistler-Blackcomb Resort, for $1.06 billion.
Dean reports that Katz — an excellent, lifelong skier — thinks long and hard about all the little things that go into making the properties successful — check-in times at the ski school, why this lift line is a minute longer than that one. He also believes in specific uniform colors for employee ski gear at all Vail resorts — black for mountain operations, yellow for ski safety, red for ski patrol, green for photography, blue for ski instructor. Katz himself wears gray. “It means desk job,” he told Dean, chuckling. “It means the people who rarely go skiing.”
“Have fun” is one of the six company values he’s instituted at Vail since he took over in 2006. Managers are given pins to hand out to employees who exhibit spontaneous eruptions of joy, and each year a “Have fun” award is given to the employee who did the most to promote fun at work.
Katz tries to be as approachable as possible. He encourages all Vail Resorts employees to share their ideas, and Dean reports that Katz genuinely seems happy to speak with them.
Katz’s signature innovation is the Vail Epic Pass, introduced in 2008 — a season pass to all the company’s resorts (which then numbered five) — for $579, a price so low that people didn’t believe the offer was legit. Last season the company sold more than 650,000 Epic Passes at $809 apiece, generating $525 million in cash. There are Epic Pass holders in all 50 states and in 99 countries.
And with every new property, Katz builds on the pass’s value, attracting more buyers from more areas in an industry that is flat at best.
The Epic Pass explains why, starting in 2012, Katz picked up three small mountains in the Midwest: Wilmot, located halfway between Milwaukee and Chicago; Mount Brighton, near Detroit; and Afton Alps, outside Minneapolis. None will ever be considered world-class, but “we get access to 800,000 skiers in Chicago and 400,000 each in Detroit and Minneapolis,” Katz told Dean.
At those small resorts, a season pass was already as much as or more than an Epic Pass, so buyers get that, plus improved facilities. But more important, when those Midwesterners plan a big annual trip out West, they’ll be taking their Epic Passes to a Vail-owned property — in California, Heavenly rather than Squaw; in Utah, Park City instead of Snowbird .
Vail Resorts now has 30,000 employees; 42,547 acres of skiing; and, last year, more than 10 million skier visits and $452 million in revenue, up from $241 million in 2013.
It owns and operates 30 lodges and more than 200 retail shops.
The important point, Katz told Dean, is that Vail is not just collecting resorts. “We want resorts that make our network more powerful, sophisticated, and smarter,” he says. He’s looking to places like Japan and China, and possibly massive numbers of new Epic Pass buyers.
Katz grew up an East Coast skier. After he went to work for a hot investment bank on Wall Street, he traveled to Vail. “I was completely blown away,” Katz told Dean. “It was like The Matrix or something: You can’t go back.”
In 1990, Katz moved to a private-equity firm, Apollo Investments. In 1991, Apollo bought a piece of Vail Associates and handed Katz the account, which was in trouble. Katz helped the company through a bankruptcy and reorganization that ultimately resulted in Apollo taking full control.
Sept. 11 ‘like a trigger’
In 2001, Dean reports, Katz and his wife — the cookbook author Elana Amsterdam, an early proponent of gluten-free and paleo eating — were getting antsy. Their sons were 2 and 1, and the idea of life in a Manhattan apartment seemed less attractive every day. Then came Sept. 11. “It felt like a trigger,” Katz says. The family moved to Boulder, Colo.
In 2006, Vail’s CEO resigned, and Katz was offered the job. He knew the company well and had loads of ideas about how it could be improved. He also saw an opportunity to try new leadership techniques he’d been studying. He took the job.
His vision of leadership: “You can’t just connect to the leader. People must connect to one another.”
On his first day on the job, Dean reports, Katz dropped a bombshell: Vail was moving from its longtime headquarters in Beaver Creek to a new LEED-certified building two hours away in the Denver suburb of Broomfield. The company, he said, needed to think of itself not as a ski resort but as a global travel business. “Four Seasons isn’t based in Nevis,” he told Dean. “It’s right in Toronto.”
People were upset, but Katz told Dean it was one of the best decisions he’s ever made. It showed that he would not bury bad news and also signaled that everything was subject to change.
Katz looked at his company’s disparate holdings and asked, “What are we going to be the best at?”
He couldn’t claim with confidence that Vail was best at developing real estate or Caribbean resorts. But multiresort ski management? “Our level of sophistication in how we run our resorts is unparalleled,” he told Dean. “That was the goal.”
Data collection
Vail has developed an app called EpicMix, which allows skiers to track vertical feet, share and purchase photos taken by company photographers, and view a constantly updated list of waiting times at resort lifts.
Vail’s secret weapon is data, and not just because it helps people avoid lift lines. By analyzing Epic Pass data, the company can see exactly which runs its visitors are skiing, and with whom. The information allows Vail to target its marketing and personalize emails: Expert skiers get aggressive pictures; the mom who skis once a year sees happy kids on the green runs.
Vail has its detractors. It’s big, corporate, the antithesis of the mom-and-pop culture of the early ski industry. Its resorts change their communities. Traffic, parking and rich visitors are constants.
“It’s love-hate for me,” one social-media post says. “When they buy a mountain, they transform the vibe to conform with ALL their mountains. On the other hand, they make resorts better by actually investing.”
Katz told Dean he has this view of his resort towns: “These communities rightly feel that these mountains are treasured, iconic, and that they belong in the control of the community. Whoever is in charge is responsible for anything that goes wrong — or any fear about anything that might go wrong.”
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