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Intrawest files $100M IPO - Page 2

post #31 of 56
Quote:
Originally Posted by Finndog View Post
 

The KSL model is clearly different from what Intra did in the past. 

 

regarding investment, I get that they use investor capital but that's not what I was discussing.  

 

Yes, it's new and improved (different wrapper).  That's Wall Street 101 when going public following failure in that industry.  You must change the color of the bottle.  Unfortunately for them the economics don't follow human whim at IPO time.

 

Your line of thought does explain why WS gets away with the same devices of failure again and again.  How many lending crises have we had?  Do you think they're over?  If the time isn't right for IPO-s now the day will come as will failure.  

 

Hey, if you want their stock be my guest.  Maybe it will come off like Twitter....

post #32 of 56

yeah so now I'm really confused. I was not talking about what Intrawest was planning on doing especially given this is about a finance group really running the show.  

 

I have no idea what they are planning (note I stated I had not read the prospectus a couple of times) except I think we can agree that if the prospectus says they are interested in acquisitions, they can't go do something else later like investing the capital in stocks. If I had to guess, they will try to pump up the value with a few name brand acquisitions and try to sell off their interests.   

 

I would agree that they are trying to raise capital so they can make money off whatever they decide to do with it.  I don't think they can just raise the capital and write out bonus checks. :D 

post #33 of 56
Quote:
Originally Posted by Lorenzzo View Post
 

And you know that offering discounts increases revenue and bottom line?  How do you know that?  Why didn't it work for Interwest previously?  We know it didn't because they were forced to sell their major assets.  What in the heck else does one need to know?

Yes I do know that on a small scale, in my case the discounts did increase the revenue that Intrawest received from me.Obviously Intrawest reasoning for selling Mountain Creek was strictly based on thier business needs just as my skiing is based on my needs, expense being one of them. Do I look each season to find deals that offer discounts to multiple resorts, Yes. I'm sure many skiers do the same, which is the point I was agreeing with.     

post #34 of 56
Quote:
Originally Posted by Bill9994 View Post
 
Quote:
Originally Posted by Finndog View Post
 

 

Again i haven't read the prospectus but I think the value of the KSL branding and building of the network has been successful and not yet realized.  Just look here to see how many people are buying the epic passes and them specifically traveling to those resorts that are covered by the pass where they spend dollars. You are now seeing other resorts following suit. If you look at this historically, IntraWest was actually one of the first to start this.  The branding is not the parent name in this case.

 

The consumer doesn't cares that KSL owns all of these resorts; they just know that Snow.com gives them access to all of these 26 resorts, products and services https://epicrace.epicpass.com/?intcmp=SP000034  There's even a contest to see who can spend money at each one :D

 

They are now buying up local resorts like in MN, here again. you own a ski pass at Brighton, well, now you get discounts at all their other resorts. Want to buy ski's or other equipment, yep, we sell that too since we own the shops on the mountains and control what brands gets sold.  

 

Regarding not reinvesting, I simply cannot agree with that. Even in my own small business, we reinvest to offer new products and services as well to replace older less efficient equipment. Looking at the steamboat, they just made significant reinvestment's into expanded snowmaking and to replace older, less efficient equipment, Copper just added a lift, several resorts opened new terrain. All of which will improve the bottom line. Any company that does not reinvest will die. Now if you are talking about an investment group engaging in raiding, that's a different story.  

 

I definitely agree with you here. Intrawest use to own Mountain Creek in NJ. I would buy a season pass there, and get free days or 50% off lift tickets at Mont Tremblant, Stratton, and Steamboat. We would also get lodging deals. A few years ago Intrawest sold Mountain Creek and those deals disappeared, I haven't bought a Mountain Creek lift since that happened. i also do not go to any of thier other resorts as much as I use to either. 

 

+1. what vail resorts is doing now and seems like others are following suit is great for the end user. as a MN skier we bought the epic local pass, resorts one can use it and restrictions here, where afton will be our main ski area and has been over past few years. by adding the additional benefits, discounts, etc. opens up the door. before we would have just one trip planned out west know that just in lift tickets we would be spending several thousand dollars for the entire family to ski for a week (2 adult/2 children 7 day tickets at vail ~$1800 now). We spent about that much for season passes for our whole family. Given that now you look at the savings if you planned a second or third trip to one of the resorts the epic local pass gives you access to. welch village here in mn have aligned themselves w/ big sky and grand targhee and if you look at other small independent ski resorts across the nation the are doing the same.

 

cnbc had the ceo of vail on not to long ago where he stated ~50% of ticket sales are season pass holders and about ~20% of season pass holders use it at multiple resorts. give people more options and they will go somewhere else. throw in the $30 burger/fries combo at the top of the hill, $5 hand warmers you now need to get b/c your child is cold and you forgot spare in the car, hotels, and all the other accouterments that goes along w/ family ski trip anywhere is huge. 

 

i'm sure that once vail bough afton and mt brighton in michigan they saw an increase in season pass sales. i think people in smaller ski markets, like MN where one has a handful of places to choose from, people tend to buy the season pass to one place and go there, next season might to mix things up buy season pass to another, etc. (here in mn there is no reciprocity b/w the local hills w/ re to season passes). now the incentive is there to stick w/ one and use the benefits that might be attached to that resort elsewhere be % discount on lift tickets, hotels, etc.

 

also, here in MN at afton there is an influx of much needed cash for improvements. other of the small hills in the area have also made improvements to snow making, chalets, etc., but w/o major financial backing it's difficult to do for a small independent operation.

 

in some of these smaller markets I'm sure for those individuals/familis that have the money to do so it is very tempting to buy lift tickets at multiple places to save money on possible trips to the larger resorts.

 

now as an investment in the stock. that is a hard sell for ski resort that is public even though mtn has gone up substantially over the the last few years given that it all depends on the weather.

post #35 of 56

yep and the extras are where the profit is. Just look at the airlines. They are now making a substantial % of profit (not just revenue) from baggage fees, seat upgrades, food/ liquor. That's where you make your profit.  This is nothing different and will develop into more.  

post #36 of 56
Quote:
Originally Posted by Finndog View Post

yep and the extras are where the profit is. Just look at the airlines. They are now making a substantial % of profit (not just revenue) from baggage fees, seat upgrades, food/ liquor. That's where you make your profit.  This is nothing different and will develop into more.  

+1 Finndog, hit the nail on the head. With combined season passes and bundling becoming the name of the game, I would expect to see quite a few more M&A's and IPO's as resorts attempt to scale. In such a capital intensive industry, it will be tough for small stand alone resorts to compete for the vacationer market.
post #37 of 56

I've been watching Vail execute on bundling in my little slice of their world.   Vail bought Breeze Ski Rentals a while back.  I've been stoping at their I-70/Dumont location for demos forever.  Vail also owns the Starbucks franchise there and recently renovated the building and parking lot.   They also recently bought the Colorado Mountain Express shuttle company.

 

Now, every single CME shuttle going to every Colorado resort stops at the Starbucks and ski shop owned by Vail, even on the way to competitive resorts.   One of the ski shop guys said it was something like 10,000 people/month through the door.   Pretty smart bundling and great execution.  Intrawest, KSL, and Powdr Corp have their work cut out for them to compete with that.

 

That said, MTN has a 70 P/E and a 3.6 PEG ratio and only a 3.6% profit margin.  Very expensive stock.

post #38 of 56

A company called "hospitality franchises" (now called Cendant) had a similar method of revenue capture, they owned hotels, car rental and other similar type leisure/business travel companies and made a very small amount on every bottle of shampoo, bar of soap used in every hotel, the gas sold for cars, and so on.....a very small booking fee for reservations, a bit of this and that on every thing that fueled all the companies it owned.... 

post #39 of 56
Quote:
Originally Posted by tball View Post
 

 

 

That said, MTN has a 70 P/E and a 3.6 PEG ratio and only a 3.6% profit margin.  Very expensive stock.

 

compared to Twitter its a steal! :D

post #40 of 56
Quote:
Originally Posted by tball View Post

I've been watching Vail execute on bundling in my little slice of their world.   Vail bought Breeze Ski Rentals a while back.  I've been stoping at their I-70/Dumont location for demos forever.  Vail also owns the Starbucks franchise there and recently renovated the building and parking lot.   They also recently bought the Colorado Mountain Express shuttle company.

Now, every single CME shuttle going to every Colorado resort stops at the Starbucks and ski shop owned by Vail, even on the way to competitive resorts.   One of the ski shop guys said it was something like 10,000 people/month through the door.   Pretty smart bundling and great execution.  Intrawest, KSL, and Powdr Corp have their work cut out for them to compete with that.

That said, MTN has a 70 P/E and a 3.6 PEG ratio and only a 3.6% profit margin.  Very expensive stock.

Here in the twin cities besides afton the also bought one of the goto shops be either good boot fitters, ski recommendations, cross country skiing, biking, clothing, etc. Go in for new skis, clothes, or whatever and you are surrounded by epic pass posters and talk of dreams coming true in fluffy snow out west or Europe.

The stocks expensive and has been for a while. I considered buying it when it was around ~$50 just to have the subconscious feeling the small dividend would pay for at least part of one of the season passes and thought it was to expensive then. Volatile business where the margins can be small and also lost to el niño, la nina, or whatever weather pattern or prediction the farmers almanac has in store for the season.
post #41 of 56
Quote:
Originally Posted by MNSkiing10 View Post


+1 Finndog, hit the nail on the head. With combined season passes and bundling becoming the name of the game, I would expect to see quite a few more M&A's and IPO's as resorts attempt to scale. In such a capital intensive industry, it will be tough for small stand alone resorts to compete for the vacationer market.

There's no requirement resorts be commonly owned to offer discounts with participating resorts, it's going on now.  The other income that's so heavily promoted to convince equity is silly.  Look at any industry that's sold that and the related numbers.  Of course they talk about it, they're selling to people that will swallow it.  Yes, everyone wants to be Apple it just doesn't happen.  Boy some people sure get carried away, the hill, its conditions and the way it functions will determine success. Marginality won't save public or private.  

 

Sure, if you are in Minnesota you can get the hots for access to real skiing but noone in the Rockies cares about Minnesota.  Unless you can show accretiveness in the lower rates but greater volume you're just guessing and you're going against facts as to prior performance.  It is true lower rates may benefit the skier for a time but capital starvation will offset that in all but the short run. and capital will run away from ski resorts.  Just ask Intrawest's creditors.

 

Again, Intrawest already failed miserably, it's new packaging, the business model hasn't changed.  That might tell some of you something.  

post #42 of 56

really? I can tell you Steamboat cares very much about MN! They are some of our most frequent visitors.  I don't have time to find it but I am pretty sure its like TX then MN for number of tourists coming into CO alone.  I don't agree that Intrawests model was the same as KSL's

 

 

Quote:

Originally Posted by Lorenzzo View Post
 

There's no requirement resorts be commonly owned to offer discounts with participating resorts, it's going on now.  The other income that's so heavily promoted to convince equity is silly.  Look at any industry that's sold that and the related numbers.  Of course they talk about it, they're selling to people that will swallow it.  Yes, everyone wants to be Apple it just doesn't happen.  Boy some people sure get carried away, the hill, its conditions and the way it functions will determine success. Marginality won't save public or private.  

 

Sure, if you are in Minnesota you can get the hots for access to real skiing but noone in the Rockies cares about Minnesota.  Unless you can show accretiveness in the lower rates but greater volume you're just guessing and you're going against facts as to prior performance.  It is true lower rates may benefit the skier for a time but capital starvation will offset that in all but the short run. and capital will run away from ski resorts.  Just ask Intrawest's creditors.

 

Again, Intrawest already failed miserably, it's new packaging, the business model hasn't changed.  That might tell some of you something.  

post #43 of 56
Quote:
Originally Posted by Lorenzzo View Post

Quote:
Originally Posted by MNSkiing10 View Post

+1 Finndog, hit the nail on the head. With combined season passes and bundling becoming the name of the game, I would expect to see quite a few more M
There's no requirement resorts be commonly owned to offer discounts with participating resorts, it's going on now.  The other income that's so heavily promoted to convince equity is silly.  Look at any industry that's sold that and the related numbers.  Of course they talk about it, they're selling to people that will swallow it.  Yes, everyone wants to be Apple it just doesn't happen.  Boy some people sure get carried away, the hill, its conditions and the way it functions will determine success. Marginality won't save public or private.  

Sure, if you are in Minnesota you can get the hots for access to real skiing but noone in the Rockies cares about Minnesota.  Unless you can show accretiveness in the lower rates but greater volume you're just guessing and you're going against facts as to prior performance.  It is true lower rates may benefit the skier for a time but capital starvation will offset that in all but the short run. and capital will run away from ski resorts.  Just ask Intrawest's creditors.

Again, Intrawest already failed miserably, it's new packaging, the business model hasn't changed.  That might tell some of you something.  

But folks in the CO Rockies do care about possibility of skiing in Tahoe, Utah, and Europe given the opportunity one can just wake up, put on skies and walk to the slope and not worry about standing in line to buy a lift ticket. I think they make up for the capital starvation by increasing the price on that cup of or whatever other additive a skier has to get by a nickel every year. Margins ae thin to begin with and making that up on things people don't really think about or to busy to think about because they have to get one more run in, when visiting X resort is where they make it up.

Can't comment on intrawest past execution of bundling things up, but if you look technology wise how far some of these resorts have come, be social media, easy of experience, etc. sure was part of it. Poor management sure was another.

As a visiting skier the bundling up and ease of it has made the experience better I think overall. As a very simple example for us with the epic pass we can now use the resort charge here in MN, get the reward points, epic mix for the kids or account online to keep tabs on things. You multiply that by a several thousand people that head to worry about sticker passes, giving or worrying about kids running out of cash, etc. eases the parental mind to spend $6 on a small coffee at multiple ski resorts where before that same person only bought it at one. It adds up.
post #44 of 56
Quote:
Originally Posted by Finndog View Post

Quote:
Originally Posted by Lorenzzo View Post

 
There's no requirement resorts be commonly owned to offer discounts with participating resorts, it's going on now.  The other income that's so heavily promoted to convince equity is silly.  Look at any industry that's sold that and the related numbers.  Of course they talk about it, they're selling to people that will swallow it.  Yes, everyone wants to be Apple it just doesn't happen.  Boy some people sure get carried away, the hill, its conditions and the way it functions will determine success. Marginality won't save public or private.  

Sure, if you are in Minnesota you can get the hots for access to real skiing but noone in the Rockies cares about Minnesota.  Unless you can show accretiveness in the lower rates but greater volume you're just guessing and you're going against facts as to prior performance.  It is true lower rates may benefit the skier for a time but capital starvation will offset that in all but the short run. and capital will run away from ski resorts.  Just ask Intrawest's creditors.

Again, Intrawest already failed miserably, it's new packaging, the business model hasn't changed.  That might tell some of you something.  

+1 to what finndog said. At the this years ski expo at the mall of America the only 2 CO ski resorts were keystone and steamboat and steamboat has been here every years as long as I can remember. Big sky and Jackson whole were the other 2 big ones.
post #45 of 56

Lorenzo, I don't think anyone has been/is talking about Intrawest, just the model of KSL. 

 

again, we have no idea what they are up to.  

post #46 of 56
Interview

Interview of vails CEO on Forbes that touches on some of the points made here regarding bundling of the resort experience.
post #47 of 56
Quote:
Originally Posted by Finndog View Post
 

Lorenzo, I don't think anyone has been/is talking about Intrawest, just the model of KSL. 

 

again, we have no idea what they are up to.  

I''m ok being disagreed with, some good points made.  The prospectus and dog and ponies may reformulate strategy, but the question is what really can change from Interwest's approach? The issue concern securitization and public ownership of ski areas.  The main differences would be in execution and I'd argue there's plenty of data to show the limits in that regard. Ski resorts aren't that different and the same goes for avenues for material value growth if any. Even land/development plays these days are considered one or two quarter events without value implications.  By the way if you want to see the future with any of these plays just look at Clubcorp in golf.  Their assets have mostly undergone serious declilne, lack of sales liquidity and their business provides a lot of analogy.

 

If I'm right, the short term benefits such as Epic will in the medium and long run be outweighed by undercapitlization of the assets and decline.  It's happened through securitization many times in many similar industries.  But hey, enjoy the benefits now and there's always the exception.  In my case I've stood a little too close to where the sausages are being made and have seen too much to ever buy in to something like this.

 

Every company in the world would love to be Amazon, value growth with no earnings growth or even earnings.  It does occasionally happen, Twitter of late's been going that way.

 

And I was being flip about Minnesota.  My point was noone is ever going there from CO or the rockies.  That doesn't mean Minnesotans ski dollars aren't valued or that an Epic deal doesn't give them greater access but they aren't really going to move stock values or create some form of LT growth for ski resorts.

post #48 of 56
Quote:
Originally Posted by Lorenzzo View Post

Quote:
Originally Posted by Finndog View Post

 
Lorenzo, I don't think anyone has been/is talking about Intrawest, just the model of KSL. 

again, we have no idea what they are up to.  
I''m ok being disagreed with, some good points made.  The prospectus and dog and ponies may reformulate strategy, but the question is what really can change from Interwest's approach? The issue concern securitization and public ownership of ski areas.  The main differences would be in execution and I'd argue there's plenty of data to show the limits in that regard. Ski resorts aren't that different and the same goes for avenues for material value growth if any. Even land/development plays these days are considered one or two quarter events without value implications.  By the way if you want to see the future with any of these plays just look at Clubcorp in golf.  Their assets have mostly undergone serious declilne, lack of sales liquidity and their business provides a lot of analogy.

If I'm right, the short term benefits such as Epic will in the medium and long run be outweighed by undercapitlization of the assets and decline.  It's happened through securitization many times in many similar industries.  But hey, enjoy the benefits now and there's always the exception.  In my case I've stood a little too close to where the sausages are being made and have seen too much to ever buy in to something like this.

Every company in the world would love to be Amazon, value growth with no earnings growth or even earnings.  It does occasionally happen, Twitter of late's been going that way.

And I was being flip about Minnesota.  My point was noone is ever going there from CO or the rockies.  That doesn't mean Minnesotans ski dollars aren't valued or that an Epic deal doesn't give them greater access but they aren't really going to move stock values or create some form of LT growth for ski resorts.

I agree with you about places like MN or others that have very small footprint on the industry to create fast, knock it out of the park type of growth for any of these corp resort type, but they due provide slow constant growth and are cash cows while luring potential and life long skiers that will want to ski something more than 350 of vertical. If these smaller resorts peppered throught the hills of the midwest or elsewhere outside of the rockies provide some sort of constant and be small growth i dont think bigger resorts would make these aquisitions or partner up with each other. The only way for any of these ski corp to have lt growth is to either acquire/lease new land and build a new resort and town or gobble up/partner up w/ one that already has rights to great ski land. At the current time vail seems to have found a way on how to execute that well. Hopefully intrawest will do the same and successfully execute their long term plans b/c in the end it will benefit all of us that can still ski. Once you have to hang your skis for good who cares. Only time will tell.
post #49 of 56

Businessweek article that resonates what Lorenzzo has been stating. Will be an interesting story to follow over the next few years, especially from frequent users of the resorts that will be affected.

post #50 of 56

yep, this is why we got onto the discussion of how KSL is making it work.  I honestly think Fortress will raise capital,  sell out their interests in Intrawest and run.  Proof that Intra has not followed the KSL model is that they own several different properties and business' and don't have any cross-marketing programs; as a pass holder at the boat, I have virtually no incentives to use their other resorts. 

 

 

FROM THE PROSPECTUS: 

 

Intrawest Resorts Holdings, Inc. (“New Intrawest”) is a newly-formed Delaware corporation that has not, to date, conducted any activities other than those incident to its formation, the Refinancing (as defined below) and the preparation of the registration statement of which this prospectus forms a part. Unless the context suggests otherwise, references in this prospectus to “Intrawest,” the “Company,” “we,” “us” and “our” refer to Intrawest Cayman L.P. (“Cayman L.P.”) and its consolidated subsidiaries prior to the consummation of the Restructuring (as defined below), and to New Intrawest and its consolidated subsidiaries after the consummation of the Restructuring. All amounts in this prospectus are expressed in U.S. dollars, except where noted. Our fiscal year ends on June 30 and references in this prospectus to a “fiscal” year refer to the year ended June 30 of the corresponding year. References in this prospectus to “Fortress” refer to the private equity funds managed by an affiliate of Fortress Investment Group LLC that have an ownership interest in the Initial Stockholder.

post #51 of 56
Quote:
Originally Posted by sjhill9859 View Post
 

Well: If it does to Intrawest what it did to Vail Resorts, you can expect the company to go from guest-centric to shareholder return centric, lots of firings, maintenance of low wages, putting things like safety on the back burner, and a whole lot of wonderful stuff.

Actually, no.  Vail did the opposite making massive capital improvements including safety, paying competitive wages with benefits, and doing all of this while being more guest-centric than all the hills they purchased with the possible exception of Canyons (Canyons was already there).  Intrawest has the problem of needing cash every year to cover the debt service.  Unlike Vail, it isn't even close to being as diversified.

post #52 of 56
Quote:
Originally Posted by quant2325 View Post
 

Actually, no.  Vail did the opposite making massive capital improvements including safety, paying competitive wages with benefits, and doing all of this while being more guest-centric than all the hills they purchased with the possible exception of Canyons (Canyons was already there).  Intrawest has the problem of needing cash every year to cover the debt service.  Unlike Vail, it isn't even close to being as diversified.

You may both be right as the MO for something like this is large up-front capital investment using funds raised with those for purchase in order to justify aggressive revenue increases, followed by significant cost pressure if forecasted revenue growth isn't met.   Most acquisitions of this type miss forecasts, usually because a winning bid requires an edge of reality set of assumptions.

post #53 of 56

couldn't they be creating the situation whereby they are creating shares in order to facilitate their exodus by selling off their shares in the company ? 

post #54 of 56
Quote:
Originally Posted by Finndog View Post
 

couldn't they be creating the situation whereby they are creating shares in order to facilitate their exodus by selling off their shares in the company ? 


Not having an ongoing stake would provide less assurance than having one.

post #55 of 56
Quote:
Originally Posted by Finndog View Post
 

couldn't they be creating the situation whereby they are creating shares in order to facilitate their exodus by selling off their shares in the company ? 

 

 

Yes, their exodus with your money.

post #56 of 56
Quote:
Originally Posted by SHREDHEAD View Post
 

 

 

Yes, their exodus with your money.

 

Not my money!  Well, they do get my money from my ski pass.

 

This is my theory. 

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