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Business was good, trust us

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The Christmas and New Year’s period was good for both Whistler-Blackcomb and its parent company, Intrawest, but neither will say just how good.

While skier numbers clocked by the mountains over the peak holiday period may be valuable information to resort community residents, Intrawest says releasing the skier stats for this period is of little value to its shareholders.

The information could spook investors one way or the other.

"We will intentionally not be providing specific percentage growth rates," said Intrawest executive vice president and chief financial officer, Daniel Jarvis.

In a conference call with analysts and institutional investors last week, Jarvis, said the percentage increases this year, over the same peak period last year, are not really meaningful in trying to forecast how Intrawest will perform over the entire season, especially considering the poor performances associated with millennium travel issues last winter.

"When you take last year’s numbers, which were depressed because of Y2K travel-related issues, and then you put on top of that some very strong results, you obviously get some pretty exciting percentages," noted Jarvis.

"In our view though, those percentages are not terribly meaningful in trying to assess the results for the full season."

Colorado ski resorts, on the other hand, reported an overall 29 per cent jump in skier visits over last year through the holidays and a seven per cent increase over the state’s five-year average.

Although last winter was a poor snow season for the state, Colorado Ski Country USA president and CEO, David Perry, said the numbers this winter were within two per cent of the record-breaking season of 1997-1998.

While the numbers for Colorado’s Front Range resorts were relatively flat, the destination resorts – which compete directly with Whistler-Blackcomb – experienced a 37 per cent spike in skier visits.

Analysts asked Jarvis if he would discuss how Intrawest’s visits were tracking relative to these Colorado announcements. He would say only that Intrawest resorts "have equalled or exceeded" the competition results. "You can bet our resorts have done very well and our numbers compare favourably with our competition."

Intrawest did, however, say that based on the strong growth in revenue and visits over the Christmas/New Year period compared with last year, combined with bookings in place across all of its resorts, the company is confident it will meet or exceed the estimated 18 per cent growth in EBITDA – or earnings before interest, tax, depreciation and amortization – for this fiscal year.

Jarvis attributed the strong holiday results to an increase of over 3,200 beds at its resorts and the accumulative effect of investments made in facilities and villages over the last three years.

"Whistler-Blackcomb continues to perform extremely well," Jarvis told analysts. "It has clearly established itself and it is really a very unique asset – a very unique franchise in the leisure world."

Jarvis said the new Westin hotel helped boost overall numbers in Whistler. "And we have seen some very good occupancy through the holiday period." He said even more encouraging than the increase in visitor numbers, was that each visitor generated more cash toward the company’s bottom line this period over the same time last year.

Jarvis said across the resorts the strongest performance in terms of revenue-per-visit came from ski school, rental and retail operations. "The other area which is very strong is property management," he said. "Because we brought on more units we now have more units under management so that division is also seeing very good growth."

Whistler-Blackcomb’s new director of sales and marketing, Stuart Rempel, said ski school performance in Whistler was definitely strong.

"We had excellent results in our ski school and we had record days in our kids programs. We have increased our Creekside product and with the new Creekside development we can take up to 300 more kids in that program," noted Rempel.

"We have streamlined our whole offering at ski school and it really is one of the finest programs in the world now and our results were fantastic over Christmas time."

How fantastic?

Rempel said Intrawest is not reporting specifics and this is something that sits fine with him. He said it is common practice not to release the results of individual business units within a public company.

"We had a good season and it was the result of having excellent snow conditions. We were busier than last year," said Rempel.

Although Whistler-Blackcomb’s performance was good, in terms of percentage increases over the same period last year, it was not Intrawest’s top holiday performer.

Jarvis was asked by an analyst from CIBC World Markets to rank the resorts in order of performance this holiday.

"In terms of percentages, Mountain Creek was the one that had the most dramatic reversal because of where it was last year," responded Jarvis.

"Copper was very strong in terms of year-over-year change and Tremblant and Mammoth had very strong year-over-year change," he said.

"And then, strong, but not as dramatic, would be Whistler-Blackcomb, Stratton and Snowshoe in that second category."

The poor performer this season, due to an unseasonable lack of snow in B.C.’s high mountain regions, was Intrawest's newer division, Canadian Mountain Holidays, touted as being the largest heli-ski operation in the world.

CMH was not able to start full operations until January, 2001.

"The biggest story for us this holiday season was Mountain Creek," Jarvis told investors. He said there is finally recognition of the changes that have been made in the New Jersey resort.

It is the only Intrawest resort still totally reliant on weather for business and it will continue to depend on day-skiers until Intrawest gets the planned village out of the ground.

Last season saw Mountain Creek take a beating due to inclement weather but this winter saw a turnaround. "We had a huge week at Mountain Creek," said Jarvis. "We clearly benefited from good snow conditions there but we were ready for the numbers. We handled them well. Just before Christmas we also had a very successful real estate launch and this has given the resort a strong injection of momentum."

Jarvis noted that Tremblant was able to avoid strike action before Christmas and should be free from labour unrest for a while. "We settled with our unionized work force there and we have a new five-year collective agreement," said Jarvis. "We were very pleased to resolve that without any disruption of our Christmas season."

Jarvis was also happy with the performance of Intrawest’s vacation booking arm, the Resort Reservations Network that started in Tremblant, was expanded to Whistler and this year taken to Colorado.

Resort Reservations Network bookings have more than doubled compared to the same time last year. The company did $20.3 million in bookings versus $9.5 million to date last year.

"We are looking at potentially taking it to market beyond Intrawest resorts," noted Jarvis. "And we are having some very productive and encouraging discussions with resorts in Mexico, the Caribbean and Europe."

Accommodation providers that sign with Resort Reservations Network contribute to a marketing budget. The result, noted Jarvis, is cost-effective, "major coverage". He said, for example, the program generated a 22-page insert for Whistler-Blackcomb in Ski Magazine in the fall.

Intrawest takes about a 15 per cent commission on accommodation, car rentals and airfares booked through the system. Jarvis said Resort Reservations Network provides good old-fashioned marketing with strong e-commerce capability.

Despite the upbeat holiday news, Intrawest CEO, chairman and president, Joe Houssian, cautioned investors and analysts not to take too positive an outlook.

"Despite the great snow year and all the positives coming out of the industry, just as in the last two years we cautioned you not to take too negative a view in terms of Intrawest's performance, I would again caution you not to take too positive an implication because we got a lot of snow this year," said Houssian. "We certainly had anticipated we would have a good year, based on the bed base and our other marketing initiatives, and we basically are achieving what we thought we would achieve," he said.

A Deutsche Bank analyst questioned why the forecast wasn’t more upbeat. "It seems like it sounds business is so strong, I am surprised there is not a little it more colour on the up side in terms of estimates for the full year," he said. "Are you just taking a more cautious view given the state of the U.S. economy or did I miss something?"

Jarvis said Intrawest was merely being responsible given there was still three-quarters of the season to go.

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