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VANOC agreement boosted Whistler Blackcomb numbers

Olympics had positive and negative impacts on company

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Whistler Blackcomb saw fewer visits in the 2010 fiscal year, but a venue agreement with Olympic organizers helped put the company over its 2009 totals.

Total revenue for the now-public company was $224.7 million for the fiscal year ending Sept. 30, 2010, according to financial statements filed last week. That was up from revenues of about $218.7 million for the fiscal year ending Sept. 30, 2009.

The statements paint a picture of a company that was more financially successful year-over-year, but those totals include a $32.3 million payment from the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games as part of an agreement to provide access to facilities for the Games. The money was expected to compensate for the company's losses as a result of hosting the Games.

The payment helped the resort reach an operating profit in 2010, according to Whistler Blackcomb President and Chief Operating Officer Dave Brownlie.

"We are pleased to report that resort segment operating profit reached $84.5 million for fiscal 2010, a nine per cent increase over the prior year," he said in a news release. "Nevertheless, despite excellent snow conditions last winter, skier visits and financial results were adversely impacted, as anticipated, by skier aversion for the period surrounding the Olympics."

Even with the VANOC payment, however, Whistler Blackcomb's financials still fell below the company's expectations. The report states that financial results were "adversely impacted" by an amount greater than the VANOC compensation. The shortfall is estimated at $6.2 million before interest, taxes, depreciation and amortization.

The VANOC payment was likewise the subject of consternation for Fortress Investment Group, the then-owners of Whistler Blackcomb and its parent company Intrawest. When the Olympics began, lenders to Fortress, the New York-based investment management firm, were trying to recoup $1.5 billion they put up to help Fortress buy Intrawest.

The New York Post reported in early February that the lenders were trying to recoup that investment by capitalizing on the money that VANOC was paying Whistler Blackcomb as part of an agreement to host the Games on its property.

Total resort revenue for the fiscal year ending Sept. 30, 2010 was $211.6 million, up from about $207 million in 2009. The difference between company revenue and resort revenue is attributed to $13 million in real estate revenue.

Local and regional skiers were a bigger factor than destination skiers in the Olympic year. There were 1,050,000 local and regional skier visits last winter, 63 per cent of the total. That was up from 1,005,000 local and regional skier visits in 2009, or 54 per cent of total skier visits.

Destination skier visits fell from 873,000 in 2009 to 617,000 in 2010, 37 per cent of the year's total.

Olympic aversion wasn't the only factor impacting Whistler Blackcomb's financials. While many people held a perception that the Olympic Winter Games would make the mountains crowded, under construction and expensive, also keeping people away were restrictions on parking and highway access as well as accommodation availability and pricing.

Skiers and snowboarders could not drive to Whistler during the Olympics unless they had a residence in Whistler and had a pass that would allow them past a checkpoint at Alice Lake Provincial Park.

Whistler Blackcomb now sees a number of opportunities to increase skier visits and effective ticket price, a measure of yield per skier visit that is calculated as total ski-related lift revenue divided by total skier visits.

Among other things, the company hopes to capitalize on exposure from the Games. The report states that awareness of Whistler grew from 19 per cent to 42 per cent in Germany; from 48 per cent to 62 per cent in Australia; and from 32 per cent to 45 per cent in the United Kingdom as a result of the Games.

In Utah, the report says, skier visits grew annually at 6.2 per cent after the 2002 Olympic Winter Games, five times faster than the North American ski industry as a whole. Whistler Blackcomb is leveraging its Olympic exposure by using Games imagery and memories in websites, mail and e-mail campaigns and with vacation planners.

 

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