As the dust settles on Vail Resort's $1.4-billion friendly takeover bid for Whistler Blackcomb (WB), many in the resort community are asking what the mammoth deal will mean for them.
According to WB's chief executive officer, the "strategic combination" between the two industry giants that was announced on Monday, Aug. 8 is all about long-term stability.
"We believe this transaction will provide expanded opportunities for our resort and for our community," said Dave Brownlie, who will continue to lead resort operations as a member of Vail Resorts' leadership team. "This transaction will provide greater resources to support Whistler Blackcomb's current operations, as well as our ambitious growth plans, and ensures the long-term future of our resort."
With Vail Resorts adding the crown jewel of North American skiing to its roster of nine mountain resorts and two ski areas, and Whistler Blackcomb strongly positioned to leverage Vail's extensive marketing machine and international reach, it's clear that "both sides will benefit," explained Bob Falle, ski resort management expert and chair of Selkirk College's School of Hospitality and Tourism.
"Really, it's better for the whole," he said. "I certainly think it's a good decision from the perspective of the overall whole of the business because (Whistler Blackcomb) is protecting themselves from everything from weather to economic changes."
But where does this massive deal — which is expected to receive final approval from Investment Canada in the fall — leave the little guy, the frontline workers and longtime locals who make up the fabric of the community? While that answer largely remains to be seen, many residents have been left wondering if the resort's continued growth is really what Whistler needs.
Reactions on social media were mixed.
"Unfortunately, this is horrible for consumers," wrote Ron Peters on Facebook. "Affordable, family fun is about to be a thing of the past. Business owners, start rethinking your business plans."
While lift ticket pricing varies widely across Vail's resorts, the company has employed an aggressive pricing strategy when it comes to its 13-resort Epic Pass, which currently sells for US$809 — compared to a CAD$1,649 for a season's pass at Whistler Blackcomb. While pass prices at WB will remain unchanged for the upcoming season, Vail said it would cut the price of a Whistler season pass ahead of the winter of 2017/18.
The cost-slashing strategy has been the driving force behind Vail's major increase in the number of season pass holders — jumping from just 40,000 in 2008 to more than 550,000 today.
What that means for the cost of Whistler Blackcomb's ancillary products is unclear — again, Vail's product pricing differs across markets, but CEO Rob Katz said the company would ultimately follow Whistler Blackcomb's lead.
"We wouldn't see any change to the trajectory that Whistler is already taking on," he said. "The one thing that we generally do is bring down those season pass prices and make it more affordable for people in the community or in the broader local community to participate and become more engaged as long-term, lifelong skiers. Beyond that, we really let the local teams manage how they see their resort pricing and how it makes sense with the other parts of their business."
Still others lamented the deal's potential impacts on Whistler's already strained housing and labour markets after another record-breaking season.
"Affordable employee housing needs to be the first priority," wrote Mike Pernack on social media.
Vail has somewhat of a mixed record when it comes to housing. The company drew criticism from some of its Summit County, Colo. employees in late 2015 when workers who attended a closed door meeting claimed the resort said it would randomly select staff to share rooms in its two- and three-bedroom employee units to ease one of the area's worst housing crises in recent memory. The company later clarified that the program is optional and employees would receive financial incentives to share a room.
The same month the resort announced a US$30-million plan to develop new housing in its ski communities such as Vail, Breckenridge and Keystone.
Katz said that commitment to affordable housing — along with other essential infrastructure — would continue in Whistler.
"We spend a fair amount of time looking at the kind of investments we have to make to continue to build the infrastructure, whether that's transit, parking or affordable housing, which is one of the primary concerns across our communities right now," he said.
Vail has shown it's unafraid to open the coffers if need be, and Katz assured that trend would continue with Whistler Blackcomb's planned $345-million Renaissance project. The company has yet to sell a mountain resort and typically outspends the rest of the United State's combined ski industry in a given year.
In 2014, Vail bought Park City for US$182 million. Three months later it announced $50-million in infrastructural improvements. It has also poured millions into Northstar Resort in Lake Tahoe and Wisconsin's Wilmot Mountain, which it bought in January for $20.2 million.
"I would tell you that Vail Resorts is not afraid to reinvest," said ski industry consultant Roger McCarthy, who has served on the executive committees for both Vail Resorts and Whistler Blackcomb. "When I worked for Vail (as co-president of the company's mountain division between 2000 and 2007), I got to build a bunch of stuff. They're not afraid to put the money into the operation, and that's different from some other big conglomerates I've seen where they're trying to suck it dry and the money keeps going down the road and out of the valley."
The destination skier
Brownlie iterated on Monday that the transaction would boost Whistler Blackcomb's presence in key destination markets, such as the U.S., Latin America and Europe. Vail, on the flipside, hopes to leverage Whistler's cachet with a burgeoning Chinese ski market that is poised to host the 2022 Winter Olympics.
At Whistler's current capacity, Mayor Nancy Wilhelm-Morden is confident the resort is equipped to handle the influx.
"This resort is built to be a destination resort. We're hovering around 60-per-cent occupancy levels and we're certainly built to handle more," she said.
Focusing on the destination skier is key to continued long-term growth, Falle of Selkirk College noted.
"The increase in destination visits from afar, that's the bread and butter of the future," he said. "When you look at skiing and the domestic markets, there is a plateau in the number of skiers in Canada and the United States, so you really have to steal market share from somewhere else."
B.C. and the region also stand to benefit from the skier spillover at Whistler, said Canada West Ski Areas Association president Christopher Nicolson.
"I think this is an opportunity that is going to put Whistler Blackcomb, but by extension Western Canada, into new markets," he said. "The growth of the industry is dependent on generating and attracting new skiers into Western Canada."
Losing the Whistler experience?
Much of the chatter online in the wake of the deal was similar to the conversation sparked by WB's expansion plans announced in April: Is WB at risk of diluting the very experience that makes Whistler so appealing?
Katz tried to quell any fears of homogenization and stressed that Whistler's unique culture is what made it so attractive to his company in the first place.
"Our company, we're not trying to have the same experience over and over again, we're actually trying to preserve and protect and support each of our resorts having that unique experience because that's what makes it compelling for a season's pass," he said. "There's so much already in the works here, we feel our role is to help combine that marketing experience and then provide the financial support through thick and thin to make sure that it happens. We don't see any change whatsoever that would detract in any way from what makes Whistler iconic."
A key to that effort, believes Falle, will be keeping Whistler Blackcomb's operations staff in place. Vail said it would retain the "vast majority" of WB employees, except for a small number of roles where there may be some duplication of the company's corporate functions. Day-to-day resort operations are expected to remain unchanged.
"I think it really comes back to why (Vail) bought Whistler: because the culture there is what they wanted. It comes down to the people on the frontlines. To the customer, it doesn't matter who writes the paycheques," Falle said.