BROOMFIELD, Colo. – Investors like what Vail Resorts has been doing of late, but some of its policies are drawing brickbats.
The company recently reported record profits, $114 million, during the first nine months of the fiscal year. It operates five ski areas in Colorado and California, plus a hotel in Jackson Hole,
Shareholders earned substantial revenue from the closings of a major real estate project in Vail called Arrabelle. Also selling well is a new slope-side “club” where members can store their skis and lounge in comfort with the other extremely well-heeled members.
On the other hand, sales at another base-area project in Vail
called the Ritz-Carlton Vail are torpid, with just one condo selling since last
summer. Two-thirds of the project remains unsold, notes the Vail Daily.
While skier-days were down at flagship operation, Vail
Mountain, by 2 per cent last winter, dipping below 1.6 million, the number of
international skiers grew 26 per cent, a little bit better than the 23 per cent
gain in international skiers reported collectively by Colorado Ski Country USA
members. The company recouped $49.48 per skier last season.
There have been brickbats as well. Critics have dismissed the company’s alternative-energy initiatives as mostly driven by marketing. In an article in the Vail Daily, Randy Udall, former director of Aspen’s Community Office of Resource Efficiency, said the windmills Vail wants to install on Vail Mountain would have trouble keeping a backcountry ski hut lit.
Vail Resorts also got headlines this spring because of its decision to drop out of Colorado Ski Country USA. Vail, which has 30 to 40 per cent of Colorado’s ski market, had argued the organization needed to downsize, to limit its marketing. As the largest contributor, Vail believed other ski areas have been riding on its coattails.
The Denver Post turned its spotlight on chief executive officer
Rob Katz. The newspaper said observers credit Katz with driving profits for
shareholders, but also note criticism that Vail Resorts is becoming more of a
corporate bully. The newspaper says that Colorado Ski Country agreed to trim
its budget from $3.6 million to $2.8 million, mostly by reduced marketing, but
that wasn’t enough for Katz.
Within Vail, the town, friction has increased. Part of the
friction can be traced to the decision by Katz to uproot the company from its
birthplace in favor of a location in suburban Denver-Boulder.
Life on the road expensive