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A new beginning?

A new chapter in Whistler Blackcomb's history begins: Vail Resorts is pledging to foster a more stable economy, while ensuring it does not degrade the Whistler experience

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The long-anticipated powder has overtaken Whistler and Blackcomb mountains. From the community below, the line of snow accumulation has been gradually descending the slopes as temperatures drop, invigorating locals and tourists alike in the annual excitement that marks each ski season.

This season brings a major difference with the recent sale of Whistler Blackcomb Holdings Inc. (WB) to Vail Resorts. After years of running the mountain and seeing continual growth in both annual visitation and tourism revenue, Whistler's locally owned mountain operator is now under the governance of a U.S. company with the $1.4-billion deal that closed in October.

The acquisition is a momentous shift in the North American mountain-resort industry. It's a change that brings the hope of economic stability, but speculation lingers that the corporate takeover could lead to Whistler losing the unique appeal that has made it an internationally sought-after destination.

The sale of WB was announced Aug. 8 and closed Oct. 17. The $1.4-billion buyout gives Vail 100 per cent of Whistler Blackcomb's stock. WB owns 75% of the partnership that operates the mountains. Nippon Cable owns the other 25 percent.

With its 200 trails, 3,306 hectares of skiable terrain and 37 lifts, WB is now by far the largest destination among Vail's growing collection of resorts in the U.S. and Australia. This assortment includes the 2,954-hectare Park City Mountain Resort in Utah, Vail, Colorado's 2,141 hectares of terrain and Breckenridge's 1,176 hectares — but besides Whistler's superior size, its average annual snowfall of 11.6 metres surpasses by a wide margin the fellow resorts under Vail's ownership.

Rob Katz, CEO and president of Vail Resorts, has high hopes that the mountain will grow its international appeal under the company's ownership.

"Whistler is the largest ski resort in North America, it's the largest ski resort by visitation," he says. "The connection with Vancouver sets Whistler Blackcomb up for great growth with China and Southeast Asia."

A growing collection

The Whistler Blackcomb purchase follows a succession of mountain resort deals Vail has been closing in recent years — a growing collection that now totals 14 North American destinations, plus Australia's Perisher Ski Resort that Vail acquired last year for US$135 million. Other attractions Vail has gathered since 2010 include the Northstar at Tahoe Resort secured with a $63-million long-term lease, the $18-million Kirkland Mountain Resort in northern California, Minnesota's Afton Alps, Michigan's Mount Brighton, the Canyons Resort in Utah and the Park City Mountain Resort, also in Utah. Shortly after buying Park City Mountain, Vail injected $50 million into infrastructure to merge it with Canyons and create a 185-trail destination — the largest ski hill in the U.S.

Besides its size, WB's appeal has been strengthened by its growth of summer tourism, notes Katz after the deal closed. Over the last generation, the number of North American skiers who visit mountain resorts each year has remained relatively unchanged — averaging approximately two million annual visits on Whistler Blackcomb. But since 2008, Whistler's summertime tourism has increased dramatically, growing from 1.26 million individual visits to more than two million in 2015.

The winter still brings in most of the resort's revenue, as visitors usually spend more and stay longer than summertime tourists, but Whistler's summertime success could bring valuable lessons to Vail's other destinations, says Katz.

"Whistler Blackcomb has, I think, a much more balanced year in terms of winter and summer, which sets it apart from a lot of ski resorts in the U.S.," he says. "The Crankworx program is something we have a lot to learn from."

Not the first American takeover

Some are skeptical if the Whistler Blackcomb sale will translate into benefits for the community. An online comment posted after one of Pique's articles on the acquisition warns: "Welcome to Whistler; welcome to bland corporate America." Pique columnist G.D. Maxwell expressed his doubts in a piece published three days after the sale was announced in August: "This sellout has nothing to do with need and everything to do with greed," wrote Maxwell. "After decades of being told we don't want to become Aspen or Vail... surprise!"

But this is not the first time the Whistler and Blackcomb mountains have had American owners. In 1986 Blackcomb was bought by Intrawest, a resort-development firm based in Denver, Colo. The two mountains merged in 1997 to become Whistler Blackcomb when Intrawest purchased the Whistler Mountain Ski Corporation.

Then in 2006 the Fortress Investment Group, a New York City asset management firm, acquired Whistler Blackcomb, an arrangement that held until 2010, when Whistler Holdings Inc. was established.

Hopes for more economic stability

As an international destination, Whistler is subject to the flows of foreign economies. The U.S. plays the largest role in this respect, and the current disparity between the Canadian and U.S. dollar can take a good deal of credit for Whistler seeing one of its busiest winter seasons yet with more than two million individual visits by the time the lifts closed in the spring of 2016. But these close ties with Canada's closest neighbour also brings volatility, to which business leaders can attest while recollecting the disappointing ski season that followed the economic downturn of 2008.

"It took a few years for the economy to recover," says Barrett Fisher, president and CEO of Tourism Whistler, adding that vacation trips are often put off when people are preoccupied with paying for basic necessities. "When an economy crashes, typically the things that fall off the list when it comes to expenditures are things that people want to have but don't necessarily need to have."

Drew Meredith, an agent with the Whistler Real Estate Company, expects that the resort's marketing will expand exponentially now that Vail will be bankrolling promotions. He saw American investment in Whistler's economy surge in 2002 and 2003 when the resort gained notoriety on the North American ski scene.

"We saw a huge growth in real estate at that time and I think we became somewhat addicted to the American dollar — or the Americans and their dollars — because they were crazy spenders," recalls Meredith. Who was mayor of Whistler from 1986-1990.

A Whistler resident since 1971, Meredith recalls a time when the community had two gas stations, three little hotels and about 500 residents. He sees the Vail acquisition as the next chapter in the resort's maturity.

"When Whistler Blackcomb became its own entity, I think that was a very stabilizing move, getting it away from the volatility of investment funds out of New York," says Meredith. "This actually does create a higher degree of stability because I don't think Vail are sellers, I think they're long-term operations guys. I think it's inevitable that someone was going to buy Whistler Blackcomb, but this was probably the best buyer that was going to come along."

Commitment to retain local management

A report released last June by Whistler's Economic Partnership Initiative Committee compares the B.C. destination to six other world-famous mountain resorts. As a tourist attraction, the resort municipality study rates Whistler above the rest, but notes: "Whistler is vulnerable to the perception of being a high-priced destination, especially by travellers from the United States."

So far it appears that Vail intends to change this perception through efforts to lure more Americans to Whistler. Days after the takeover was finalized, Vail announced that its Epic Pass holders can enjoy up to five days on Whistler Blackcomb's runs, while Whistler's season's pass holders can venture south for five days of skiing on Vail's other mountains. Currently Vail's epic pass sells for US$849 (CDN$1,139), while in Whistler a season's pass costs up to $1,649 in Canadian dollars — but as of the 2017-18 ski season, the cheaper Epic Pass will include full access to Whistler Blackcomb.

Since the takeover was announced, suspicions have emerged that Vail is going to run Whistler Blackcomb according its own inclinations. Such an approach could leave key members of local management to watch things unfold from the sidelines.

"The team at Whistler and the community have done an amazing job of building the success of the resort, and our goal is not really in any way to change that or hurt that," assures Katz, noting the continued importance of Whistler Blackcomb's local leadership under now Chief Operating Officer Dave Brownlie. "Whistler Blackcomb is on a terrific trajectory already. I think that our job is really to help support Dave and the team to execute on that strategy."

But Katz acknowledges that a few positions will become extraneous as Whistler Blackcomb is taken under Vail's expanding wings.

"The vast majority of employees at the resort are really not going to see any impact or change whatsoever," says Katz. "There's certainly a couple of areas where there's probably some duplication in services that we provide at Vail Resorts and Whistler Blackcomb provides." In November, Vail Resorts announced the layoff of about 60 WB employees.

The Whistler experience

Vail's commitment to keep Whistler Blackcomb's management at the helm of local operations follows a pledge to protect Whistler's identity within Vail's collection of resorts.

"That's something that we celebrate," says Katz of his approach to running the mountain destinations. "Each one of them provides a unique experience."

But what is Whistler's unique identity as a mountain resort? And how is it distinctive as a community where more than 10,000 people live year-round?

It all depends on who you talk to. Gary Watson first heard Whistler Mountain call to him in the early 1960s, long before the first ski lift was built.

"It was a magnificent discovery to get onto that mountain, the potential was obvious," he recalls. "I used to come up here to climb the mountain."

The appeal of the peaks remains the same as those early ski mountaineering days, although in the valley below Watson has seen a resort municipality emerge since the 1960s.

"Everybody is very active. Obviously they come here by choice and enjoy the skiing, the winter facilities and the summer facilities and the lakes," he says. "I always say that people come here by choice, and they want to prove to themselves that they made the right choice. They're very active in the community."

Fisher believes that among mountain resorts, Whistler stands apart for being a welcoming community driven by a youthful energy.

"It's a world-class destination but you can go to a high-end restaurant in blue jeans and you can walk down in the Village with your dog," says the Tourism Whistler president.

But for many locals. life in Whistler means working full time, only to spend the night sleeping in your car due to the dire lack of affordable accommodation. Last summer the Whistler Community Services Society estimated that hundreds were forced to live in tents clustered through the community's parks or in their vehicles, a concerning trend that has continued through into winter with a vacancy rate of less than one per cent. With the nearest public shelter in Squamish, it's an unprecedented concern that cannot be overlooked when considering the future of the community, stresses Whistler Community Services Society Executive Director Cheryl Skribe.

"We're seeing not just a seasonal worker that's coming to town and trying to find accommodation for six months or a year," she said during an interview with Pique in August. "We're seeing long-term locals having to make hard decisions around their commitment to Whistler because they're losing their housing for many reasons, and that's new."

"It used to be that people would put basement suites in their houses — but now those houses are getting torn down to build bigger houses without suites in them," Watson adds. "So that supply of rental housing in the market is being depleted very rapidly."

The housing shortage has brought a struggle for local businesses to secure enough employees to meet Whistler's constant tourist traffic. According to a report released this fall from the Whistler Housing Authority, 65 per cent of local businesses reported being fully staffed over last winter — a number that has declined from the 95 per cent staffing rate of 2013-14.

Housing shortages throughout North America's resort towns

According to the Whistler Housing Authority, 76 per cent of the resort's workforce lives in town. That leaves a significant number of commuters, but the accommodation rate is still superior to many high-profile mountain resorts south of the border, says Resort Municipality of Whistler (RMOW) Mayor Wilhelm-Morden.

"Aspen is something like 10 per cent, Vail is just marginally better than that," she explains. "One of the reasons why we are so remarkably better than the American resorts is that we recognized very early on that in order to keep the community spirit of Whistler alive and thriving, it was critical that we provide affordable housing."

For the first time since the hectic days of the 2010 Winter Olympics, WB leased houses last winter to give more of its employees somewhere to live. On a larger scale in late 2015 Vail announced a $30-million plan to develop staff homes in some of its busiest resorts. Now that WB is among Vail's group, the corporation is committing to do what it can to help the local lack of shelter.

"We have to put more capital into building more affordable housing," states Katz. "That's something that we are committed to in our U.S. resorts... Dave (Brownlie) and his team have our full support to do that."

Katz points to the problem of available rental units being taken off the market for tourist accommodation through online sites such as Airbnb.

The RMOW has set its sights on this practice with a Mayor's Task Force assembled in October to take immediate action on such issues. Tougher enforcement is on the agenda, including court injunctions for nightly rentals that break residential zoning bylaws. The municipality has tracked 83 Airbnb listings and 45 on the VRBO website that are not zoned for nightly rental, encompassing up to 400 beds not available to permanent residents.

"Right now we think our job is to invest and really replace the housing that has been coming off the market," says Katz. "None of these resorts can be successful with a shrinking affordable housing supply."

Is it time for a Renaissance?

In the spring, WB announced the Renaissance Long Term Strategic Plan, an ambitious, multi-phase series of investments into the mountain and its infrastructure worth $345 million. With the goal of bringing more stability to the resort amid increasingly unpredictable weather patterns, Renaissance focuses on attractions that don't rely on snowfall, such as an aquatic centre at Blackcomb's upper base, a tree-top ropes course, a suspension bridge across Whistler Mountain's peaks, more hiking trails, and an expansion to the bike park at Creekside. High-end real estate developments on Blackcomb are also included in the Renaissance plan.

"We can bring the capital that we have from operating many resorts to ensure that we can move quickly to get the Renaissance project off the ground," says Katz. "We do see this as a critical next step to build the resort's future."

Renaissance is dependent on land-use negotiations with the provincial government and First Nations, but it appears that many in the community aren't convinced that the large-scale plan is what Whistler needs.

"It's got a big real-estate play, and it's got to get local approval here in Whistler — there's a ground movement of opposition," cautions Watson, who has been involved in the resort's growth since its first Olympic bid that began in 1961. "We have limits to growth in our official community plan, and this will require raising the limits, so it's got some obstacles ahead."

The community plan cites a limit of approximately 30,000 available beds in Whistler, including hotels and residences, based on the existing infrastructure. But with an average of more than 30,444 people in the resort each day — including tourists, workers who live elsewhere and permanent residents — there are signs that the community is having difficulty handling the current volume of visitation.

For part-time local Gary Cadman, who has a primary residence in Vancouver, this is evident watching the traffic jam at the Creekside parking lot on Sunday afternoons.

"To get out of that underground parking lot at four in the afternoon, you'd be waiting in the underground for half an hour to 45 minutes to get to that Creekside intersection," he says. "We have reached capacity. To build more infrastructure to bring more tourism when the infrastructure isn't in place, it's not a smart idea."

Says Watson, who was a municipal alderman from 1975-80: "Some people think it's a little too crowded. I wouldn't ski on the weekends anymore,"

"I was on the first council when we adopted the principal of a limit to growth. It's been raised a number of times, but it's still a very important principal and held dearly in the community. Yes, we have reached the limits."

Warns Cadman: "We're known as an awesome place around the world, we're just going to destroy it if we keep growing. Are we Disneyland?"

Empty hotel beds

In 2015 visitors spent more than $320 million on Whistler's accommodation, with 71 per cent of these dollars coming from tourists who live outside of B.C. and Washington State. Although hotel spending has increased by 35 per cent since 2012, Tourism Whistler believes that there is still plenty of room for more overnight visitors. During peak periods like the Christmas break or weekends in February the resort can have upwards of 95 per cent capacity, but during the middle of the week more rooms are available.

"Our longtime and loyal guests from British Columbia and Washington regional markets typically come on weekends," says Fisher. "It's the destination visitors that come further afield that come mid-week. So we definitely have availability and capacity during mid-week periods."

Occupancy numbers from July 2015 show 80 per cent of rooms being filled on weekends, which fell during the week to almost 70 per cent. Vacancies are far more common during the spring and autumn shoulder seasons.

"In November you're closer to 30 per cent occupancy for that month, meaning that you've got tons and tons of room mid-week and you've still got room on weekends as well," explains Fisher.

The slower times are what Vail is most interested in tapping into.

"Our marketing efforts and our season-pass efforts as a company are really not about building the peak but providing a more consistent and stable visitation to the resort," says Katz, adding that Vail's goal is not to increase crowding. "You can't degrade the experience in the community or on the hill and if you see that happening, then we have to shift our business approach."

A good economy solves a lot of problems

"It's good to be busy. A good economy solves a lot of problems," says Meredith when asked about the future ramifications of having Vail Resorts behind WB.

Whistler already accounts for one quarter of B.C.'s tourism spending, making it Western Canada's resort leader. So as it moves onward with a new owner running the community's largest employer, does Whistler need to focus on what it has done best? Or is it time to slow down this tourism machine until the roads are less packed, businesses can hire the employees they need and locals working full-time no longer have to sleep in their cars?

The development of the Renaissance initiative is destined to be a critical issue for Whistler's future. The municipality's ability to manage residents' needs is also vital as a new mountain operator with deep pockets strives to see that every hotel bed is filled throughout the year. Whistler is a resort — but it's also a community that more than 10,000 people call home. Ensuring that the local economy continues to grow while the limited space remains livable will be the balancing act that defines Whistler's future.

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