Vail Resorts has announced the acquisition Afton Alps, Minnesota and Mt. Brighton, Michigan. Compared to their current portfolio of resorts, the addition of these two mid-west ski areas to the Vail family seems like an odd choice. Vail, Beaver Creek, Breckenridge, Keystone, Heavenly, Northstar, Kirkwood….Afton Alps? Mt. Brighton? Is there are rhyme to this reason? Absolutely!
Typically, larger ski areas are considered destination resorts — as in visitors travel from distant locations to make their visit. This model has obviously worked well for a number of locations, but as Vail Resorts looks purchase additional properties, they have changed their focus towards ski areas in close proximity to major populations. To us, this move is genius! Why wouldn’t they want to be closer to their customers?
Afton Alps with 48 runs, 18 chairs, 3 conveyor lifts and a snowtube park is substantive place to ski and ride no doubt. It is also just 30 minutes outside of Minneapolis, which makes Vail Mountain’s proximity with Denver jealous. In fact, you could drive back and forth twice before you’d even get to Vail from Denver. Mt. Brighton has 26 trails, 6 chairs and 11 surface lifts. It is so close to Detroit, that General Motor’s employees could practically ski on their lunch break! As the auto industry begins to pick back up, the recreation industry will follow suit, and there will be a Vail Resort-owned property poised to receive them. Vail Resorts CEO Rob Katz is probably trying to get all his friends to buy Chevy Volts to get these execs back skiing!
Ski industry icon John Garnsey is the man in charge of Vail Resorts. As the Co-President of the company, Garnsey heads up major development decisions such as the acquisition of Mt. Brighton and Afton Alps. We were beyond impressed with this recent power-move, and decided to hop on the ol’ corporate jet to visit with John and get his perspective on this unique industry departure.
The Ski Channel: Explain these two recent acquisitions of Afton Alps and Mountain Brighton?
John Garnsey: We started about a year and a half ago to look into smaller market acquisitions. There are so many skiers in these high density urban and rural markets, that we felt like we could build a great conduit to getting these skiers to come experience the great destination resorts in our portfolio. Additionally, we have the capital to really up the quality of the smaller resorts.
TSC: Tell us about the logitistics of deciding which resorts?
JG: Myself and Tim Beck did a road trip all over the Midwest. The goal was to find resorts that were within an hours drive of a major metropolitan area. We looked at 27 resorts and ironically came back with the two we wanted the most.
TSC: Were Afton Alps and Mountain Brighton for sale?
JG: Neither one of them were for sale. We approached them both and it took a lot meetings and get togethers. I’m not going to say that it was easy, but we eventually came up with something that worked for us and worked for them.
TSC: How quickly was your phone ringing off the hook after people found out you were in the market?
JG: When the word got out that we were looking, we got a lot of calls, but we were very specific and deliberate with our strategy.
TSC: How did this all come about?
JG: We started looking at where our guests were coming from. We looked at location, demographics and various other variables and it ultimately just made a lot of sense to be closer to our customers.
TSC: What impact will this have on the Epic Pass?
JG: Going forward if you buy an epic pass, you’ll be able to ski all the resorts in our portfolio.
TSC: Now that you guys have added a number of resorts, are you worried about margin erosion?
JG: Nope, we believe that the incremental sales increases will more than offset any loss of margin.
TSC: Do you foresee any buying synergies through these acquisitions?
JG: Certainly, there will be all kinds of synergies for the smaller resorts. But I don’t anticipate much in the way better pricing for the larger ones.
TSC: What is going to happen with the current staff at Afton Alps and Mountain Brighton?
JG: This is obviously all very new to me, but at first glance, these guys are really great operators.
TSC: Are you going to continue to make acquisitions like this?
JG: Our strategy is to look at other opportunities similar to these. We are looking at anything that has snow and is within a reasonable distance to a large population base.
TSC: What about ski resorts internationally?
JG: We aren’t currently looking at anything in the Southern Hemisphere, but we are looking in Europe and China. We think there are opportunities globally and we are just looking for the right ones.
TSC: Anything else?
JG: We are really excited to bring these two resorts into the Vail Resort family. With these acquisitions, we are going to do right by the local patrons, our shareholders and mostly for skiers and snowboarders — as we are going to help make these two assets better experiences for locals who will in turn spend more time riding!