Vail Resorts to Acquire Kirkwood

I woke up with this news as the first item on my Facebook news page.  Yay!!!

I just saw this in the Gathering thread.  Wow, my Epic Pass just got better (except for snow).

BROOMFIELD, Colo.—Feb. 22, 2012—Vail Resorts, Inc. (NYSE: MTN) today announced that it has entered into an agreement to acquire Kirkwood Mountain Resort at Lake Tahoe, Calif., recognized by skiers and snowboarders as offering some of the best high alpine advanced terrain in North America. Vail Resorts is purchasing the ski resort as well as the undeveloped sites at the center of the base area which are zoned for residential and commercial development for a purchase price of approximately $18.0 million.

The seller will retain a participation interest in the base area parcels and will continue to own the remainder of the real estate development sites. Following the acquisition, Vail Resorts will now operate three world-class mountain resorts in the Lake Tahoe region which between them offer the entire breadth of the skiing and riding experience, including Heavenly Mountain Resort in South Lake Tahoe, Northstar California on the north shore and Kirkwood Mountain Resort.

Vail Resorts also announced that, effective immediately, Heavenly and Northstar pass holders will have access to Kirkwood and Kirkwood pass holders will be able to ski and ride Heavenly and Northstar.

“We are thrilled to welcome Kirkwood into our family as our seventh world-class mountain resort. Kirkwood offers some of the most extraordinary ski terrain found anywhere in North America with high alpine trails and the most annual average snowfall in Lake Tahoe. Kirkwood represents skiing and riding at its purest, something we intend to retain and protect long into the future,” said Rob Katz, chairman and chief executive officer of Vail Resorts. “When combined with Heavenly and Northstar, we will be able to offer our guests and pass holders unparalleled value with the very best that Lake Tahoe has to offer. We are excited to be able to offer Kirkwood to our pass holders right away – it's like opening day to a whole new season.” As of today, Epic Pass and Epic Local Pass holders will have unrestricted access to ski and ride Kirkwood. Tahoe Value Pass holders can ski and ride there every day except on Saturdays. Kirkwood pass holders with the following passes will have access to Heavenly and Northstar: Premium Pass holders and 7 Wood Pass holders will have unlimited, unrestricted access to Heavenly and Northstar, while 6 Wood Pass holders will have access to Heavenly and Northstar six days a week, Sunday-Friday, with no holiday restrictions. 5 Wood Pass holders will have access to Heavenly and Northstar five days a week, Monday-Friday. The Company also announced that it intends to retain a Kirkwood-only season pass and Kirkwood-only daily lift tickets, priced comparably to what's offered today. For more information on how to use your pass at Heavenly, Northstar and Kirkwood, visit www.bestoftahoe.com.

Located about 35 miles southwest of South Lake Tahoe, Kirkwood Mountain Resort offers pure high alpine skiing and riding at its best. The ski resort's unique location, completely surrounded by National Forest atop the Sierra Crest combined with elevations ranging 7,800 to 9,800 feet, create a geographical predisposition to receive the lightest, driest and most plentiful snow in the Tahoe region with an average of 472 inches annually. Kirkwood offers 2,000 feet of vertical drop and more than 2,300 acres of terrain from groomed beginner runs to hair-raising cornices, cliffs and the most high-angle grooming around. The resort offers four terrain parks, from beginner to advanced, as well as a Boarder X course.

Vail Resorts expects to close on the acquisition of Kirkwood Mountain Resort within the next month. Further terms of the agreement were not disclosed. Closing is subject to certain conditions, including transfer of the U.S. Forest Service Permit

Good news!

Kirkwood's facilities have been getting a bit shabby over the last couple of seasons. The place could use some fixing up.

Kirkwood has no money, and it is a money pit.  Real estate is off-track, they just completed a re-building of their power plant that runs on diesel and costs a fortune to operate.  The cost of power for the foreseeable future is at least $0.50 per KWH which should be a deal killer.  This resort has mostly older slow lifts except for Cornice and Timber Creek.  It does have an approved environmental document for expansion improvements, but no capital to make it happen. 

With Vail, the financial horsepower actually exists to put KW on the grid.  Power means improvements like high speed lifts, hotels and residential development could actually happen. 

This could be an exceptionally good opportunity to put some long-standing management issues to rest, and recapitalize the  resort to reach its potential.

Hmmm... interesting.  It certainly is a strategic move for Vail corp.  The Epic Pass is now about as valuable in Tahoe as it is in Colorado, and priced so that people (like me) who live neither near Tahoe nor I-70 in Colorado might think hard about getting one next year (buy the Epic Pass early, then decide later where to take a ski vacation). 

And yes, Vail is probably trying to offer some gnarly terrain to keep Squaw Meadows from attracting all the hard core skiers.

Hope kirkwood doesn't loose the small town vibe, please don't turn into effing northstar  :) 

My guess is they just bought it because it was cheep.  18 Million is nothing.  Just the 2 high speed lifts alone are worth about 1/3 of the total price.

Of all the resorts at Tahoe, Kirkwood is my favorite and Northstar is my least favorite.  Two opposite ends of the spectrum now jointly controlled by one company.  Heavenly is maybe one notch better in my book but not somewhere I'll chose to go.

Kirkwood has the best combo of terrain, snow, skiers and vibe.  Now the skiers and vibe are threatened.  

I agree Kirkwood could use some "sprucing up."  The sad thing is the deal was only $18M.  That seems like a remarkably good deal.  I think that fire three years back has been a huge factor in all of this.

Here's how you get on a run at Kirkwood:

Park your car near Chair Six, walk up a snow bank, put on your skis and ride the lift up to some of the best terrain in Tahoe.

Here's how you get on a run at Northstar:

Park your car three miles from the village. Wait for the shuttle bus.  Ride the shuttle bus to the village bus depot.  Walk through the entire village.  Wait in line for the Gondola.  Ride the gondola to the middle mountain.  Put your skis on.  Pole for 30 seconds.  Get in lift line.  RIde Lift to the top of some mediocre terrain.  Ski down some flat stuff.  Get to the bottom of some decent terrain.  Take a lift up.  Now you are ready for your first run of the day.

Winners: any Northstar skiers that actually had the balls to ski the gnar at Kirkwood but were content to hang out at the Northstar wine bar and ice rink instead.

Losers: Kirkwood skiers who don't like the Richie Rich crowd at Northstar.

Dmourati, great post. I'm heading up to kirkwood this sunday, wanna meet up?

Quote:

Originally Posted by dmourati 

Of all the resorts at Tahoe, Kirkwood is my favorite and Northstar is my least favorite.  Two opposite ends of the spectrum now jointly controlled by one company.  Heavenly is maybe one notch better in my book but not somewhere I'll chose to go.

 

Winners: any Northstar skiers that actually had the balls to ski the gnar at Kirkwood but were content to hang out at the Northstar wine bar and ice rink instead.

 

Losers: Kirkwood skiers who don't like the Richie Rich crowd at Northstar.

 

 

this.  hopefully Kwoods isolation will keep people away.

one plus is my pass is good at 5 tahoe resorts now and I can now check out NS/Heavenly again for sh*ts and giggles 

Well we shall see. My main fear is that VR may jack KW season pass prices up to levels closer to Squaw, Heavenly, Alpine, and Northstar.  KW has alway been a relatively cheap deal if one can deal with its isolation.    My unrestricted 7Wood season pass bought late summer cost just $379 and went up to something like $579 when the ski season got going.   Even that is quite a bit higher than a decade or so ago.  As long as they continue to have a cheap window after current seasons close so local peons can afford to ski there, I'll be happy.

I've skied KW for 3 deacdes and more there than any other resort the last two decades and have often had a season pass.   The generator fire 3 years ago really strained their finances.  KW suffered some other major financial catastrophy from an accident some years before I can't recall at this moment.  VR certainly has the capital to improve the resort in ways that would not happen in the near future otherwise.  

For we hard core skiers the most appreciated upgrade VR could put in that old timers like this person have been whining about for decades, would be an express lift on the backside aka Chair 4.  That lift services a large semi horseshoe shaped alpine bowl with a modest 1250 lift served vertical plus another 350 feet up bootable.   The current near mile long lift is a triple that though moving at speed, for two-thirds its length is a low gradient runout.  Thus so inefficient that advances skiers on the frontside taking the Cornice Express can easily ski twice the vertical in the same time.  There is some fabulous terrain often with the best snow in Tahoe where it the peels over into The Cirque and the unique Wave cornice.

I will thank VR for opening up the inter-resort pass holder visits though I am expecting not many KW skiers will take them up and visit elsewhere at the droughty end of season period while quite a number from those other resorts will.  I'd welcome some HV bump skiers here to help shape things up.

$18 millions seems like a steal but I haven't been to Kirkwood since 1994.  If only I had won the lottery. 

The Kirwood pass is/was cheap but at $650 for the Epic Pass which is good at 8 resorts I don't think many will complain.

Well, say goodbye to the $299 Network Pass at Kirkwood for sure.   I think it's a good fit, and there are a lot of opportunities to create better lodging at KW.  You could build a high end hotel on the footprint of the Red Cliffs and not trigger much environmental review beyond what is already permitted.

The season passes may go up a bit, but it's still going to be relatively cheap. $299 to maybe I'll speculate $399 or maybe $499 for unlimited, come on, that still affordable if you actually use your pass for any substantial amount of days in the season.

What will hurt is the  the single-day or promotional passes.   There were basically no great lift ticket discounts for heavenly/northstar; and vail stuck to their guns and changed nothing this season...

They're in competition to lock you down into 1 company's mountains and 1  pass.  If you bring friends, they're going to puke at paying $100, so you are socially also pressured lock your friends into getting an epic pass as well.

Quote:

Originally Posted by tahoerider27 

Hope kirkwood doesn't loose the small town vibe, please don't turn into effing northstar  :) 

Northstar was Northstar before Vail bought it.  Vail dumped in $30M, but they didn't go so far as to try to destroy whatever culture they had...well at least so far.  And it's not like they cleaned house and just straight up fired all the employees and brought in Vail drones.

I'd expect they'd respect the culture, and it's up to the employees/management/executives who stay and continue to work at Kirkwood to keep the culture going.

Quote:

Originally Posted by tahoerider27 

Dmourati, great post. I'm heading up to kirkwood this sunday, wanna meet up?

Tahoerider, thanks for the offer.  I don't know whether I'll make it this weekend but let's hook up at some point this season regardless.  

Tahoe had the unique property that all the resorts were one-offs.  This allowed for self-selection and people generally got what they wanted.  Now that we have the Squaw/Alpine and Homewood/Heavenly/Kirkwood "mergers," I worry that the identities of each resort will become diluted.  A guy at Summit Six lineup was touting his "NSA" teeshirts for "No Squaw Attitude."  This is turning into a cartel situation where the price is whatever they say it is.  

One more acquisition/merger like this, think Sierra or Homewood, and things will be pretty well locked down in Tahoe.  

Quote:

Originally Posted by raytseng 

The season passes may go up a bit, but it's still going to be relatively cheap. $299 to maybe I'll speculate $399 or maybe $499 for unlimited,

 

 

I don't think there will be a stand alone KW pass.

I feel bad for the local scene that was kirkwood. Although I am stoked to have such a sick mountain on the vail resorts portfolio. (As long as it ends up on my epic pass)

Also, to the vail resorts folks, please keep the FWT comp at kirkwood. It is a great location for our sport.

As someone who has recently moved to the Left Coast, I am amazed at how cheap the passes are here.  To put things into perspective--a Gold Season pass at Hunter "mountain" in New York runs as follows:

Granted you get "One free admission per passholder for Skyride, Brats & Brews Festival and Intl. Celtic Festival"  but, c'mon--both the Epic pass & the Squaw/Alpine Gold passes are a steal.

This year we did the Squaw pass--but even if they jack up the prices next year the Kirkwood/Heavenly/Northstar/Vail/Breckenridge/Beaver Creek/Keystone Epic seems like a good deal.

So long to free lift tickets for PSIA LIII

JF

Quote:

Originally Posted by jjardin 

As someone who has recently moved to the Left Coast, I am amazed at how cheap the passes are here.  To put things into perspective--a Gold Season pass at Hunter "mountain" in New York runs as follows:

 

 

	Thru 5/1/2011	Thru 10/15/2011	Post 10/15/2011
Adult GOLD PASS	$749	$849	$949

 

 

Granted you get "One free admission per passholder for Skyride, Brats & Brews Festival and Intl. Celtic Festival"  but, c'mon--both the Epic pass & the Squaw/Alpine Gold passes are a steal.

 

This year we did the Squaw pass--but even if they jack up the prices next year the Kirkwood/Heavenly/Northstar/Vail/Breckenridge/Beaver Creek/Keystone Epic seems like a good deal.

I think they are in a strategy change to lock you down to a company or a mountain.  Just like how groupon/livingsocial/etc pays approximately $20-$30 to signup a new member.  

While the pass prices are relatively going down, daily passes are going up.  

Also notice the trend that no sane-priced Vail passes sold after mid-december, and pretty much no discounts either.  All to persuade you to choose early and be stuck with them.

Good for us skiers in the short term while they have their war to sign and lock down passholders into their "club" forsaking all others, but we will have to see how this plays out in the future years once the dust settles.

Even with a $60 buddy passes, my buddies grumble to go to heavenly versus $40/day discount tickets elsewhere.  So I'm forced to try to convince them to join my "club" as well

Of course it is a business strategy to try to lock you in.  But it is still a hell of a deal.  If you ski in a certain area a whole bunch of times it has always been cost effective to have a season pass--the lock you in up-front strategy is not new.  I guess having a duopoly in Tahoe may be seen as limiting choices--but realistically the Northstar/Heavenly target client is a bit different from the Kirkwood/Squaw client.  I know the choice for me last year was Kirkwood or Squaw--I chose Squaw because I hoped it would snow and thought it would be easier to get to when it dumped--both having a great mix of terrain.  Adding Alpine in was really cool--but I haven't been there much this year.  

But this has made me think that I should go for the Epic pass next year.  Squaw may start seeing that thought process played out in their revenue--and adjust their price points to try to attract me & other defectors back.  So the stronger competitor may force concessions--especially after this crap year.  

Who knows--at some point your friends may think it is worth getting the season pass.

I guess if they start really raking in the dough and the economy improves and snow starts to fall the prices could start shooting up--but these guys could also go bankrupt next year if there is another drought--and then you have nothing.  Who knows.  Right now you get real mountains that all the Warren Miller films come from cheaper than Okemo or Mountain Creek, NJ.  

Quote:

Originally Posted by jjardin 

Of course it is a business strategy to try to lock you in.  But it is still a hell of a deal.  If you ski in a certain area a whole bunch of times it has always been cost effective to have a season pass--the lock you in up-front strategy is not new.  I guess having a duopoly in Tahoe may be seen as limiting choices--but realistically the Northstar/Heavenly target client is a bit different from the Kirkwood/Squaw client.  I know the choice for me last year was Kirkwood or Squaw--I chose Squaw because I hoped it would snow and thought it would be easier to get to when it dumped--both having a great mix of terrain.  Adding Alpine in was really cool--but I haven't been there much this year.  

 

But this has made me think that I should go for the Epic pass next year.  Squaw may start seeing that thought process played out in their revenue--and adjust their price points to try to attract me & other defectors back.  So the stronger competitor may force concessions--especially after this crap year.  

 

Who knows--at some point your friends may think it is worth getting the season pass.

 

I guess if they start really raking in the dough and the economy improves and snow starts to fall the prices could start shooting up--but these guys could also go bankrupt next year if there is another drought--and then you have nothing.  Who knows.  Right now you get real mountains that all the Warren Miller films come from cheaper than Okemo or Mountain Creek, NJ.  

 

 

  

Blackhawk?  You live a couple of miles away (if that).  Anyhow, I agree with your assessment and then some.  For most mountains the idea is to sell real estate since lift tickets can only cover so much in expenses.  VR has staying power and can find the capital to make improvements.  Giving vacationers (not just winter skiers) a better experience will improve real estate sales but in this case it is mostly about lift ticket sales.  Wealth is being generated again in Silicon Valley (e.g., 1000+ Facebook millionaires), so the timing seems perfect.

Lake Tahoe is one big spread-out destination.  Therefore, it is different than the three Park City resorts, Vail/Beaver Creek, the mountains around Aspen, etc.   Wouldn't it be nice if visitors not only skied the three VR properties, but also golfed there in the summer, spent money on fine dining, and used the mountains year round?  Now the combined properties become more of a "resort" than a destination. 

Regular skiers with no desire to buy real estate also win big. No one can be upset if we get a better skiing experience that includes more terrain for the buck and better services for the same money (except the people who believe that all adequately financed corporations are the anti-Christ)?

I skied a small mountain in California today (I won't mention the name, but it is not in Lake Tahoe) with my younger son.  The mountain is struggling due to this years lack of snow, evidenced by the ski shop already discounting skis by 50%.  How can it compete with a corporation offering a skiing experience consisting of better snow making, lots more skiable acreage, and reasonable priced season passes?

I may take the Bay Area Ski Bus to Kirkwood now that my pass is good there.

I'm super excited my pass is good at Kirkwood too, I've had no real logical reason to randomly try that mountain out but now I have incentive to go sometime :) Plus makes the pass even more valuable to me renewing next year! 

I was really bummed though that you can't get a pass after mid-December, I already had mine, but my fiance didn't try/start snowboarding until end of December, and it wasn't until then he got hooked and then wanted a pass... but by then it was too late. So this season has been very expensive for him and he's really excited to buy a pass come mid-March when next years go on sale. 

Seems a lot of pro and con re: this purchase.....   Having been a SS supervisor at K'wood for 5 years prior to moving to Vail, I can see a lot of upside to this deal! The 'wood has needed some further capitalization desperately since back in the 80's when I was there! Now they will get it!

But let's look at it from another perspective-....   Kirkwood has long been a favorite of the Sth Shore locals. Now things are opening up even more for them! Don't have time to drive out to the 'wood? Jump up to Heavenly for a few runs!

Or better yet- how many of you realize that Vail is only a one day drive from Sth Shore?(provided you don't stop in SLC for a few turns along the way?) Jump on Hwy 50 East out of Carson City and 12 hrs later you are in Vail! (Look out for the cops in Eureka, Austin, Ely and Delta)

45 minutes later, Breck and Keystone! How many of you have never considered a road trip to CO because of the expense? Now its part of the deal! Buy the Epic Pass, with no blackouts, and get a chance to ski most of CO for the cost of some fuel and a crash pad!

I can tell you that a whole lot of CO skiers will be making the trek West for the first time due to this deal! Now with 3 resorts for them to try, its worth the effort for them to make the trek!

No doubt some of the familiar K'wood vibe may change. I'm sure it has changed quite a bit since I left there in '85, but think of the improvements! Ultimately the slow lifts will be replaced and the base facilities will be upgraded. A smart play might be to buy a lot/ house there now, before the prices go up any more! Because for all the griping people do about the Evil Empire, remember one thing- almost everything they do touch DOES turn to gold (financially speaking)!

Not to mention I'm also excited at the opportunity to 'come home' and not have to beg tickets or rely on long ago relationships to ski there without costing an arm and a leg!

^^^ thanks for giving your take; you were the first person I thought of when I heard about this yesterday