Originally Posted by Tog
Max, Killington has been known for years for staying open extremely late (sometimes into June) and also opening early as noted. This totally changed with Powder Corp. Is it all bad though? Considering how much money it must cost to stay open for not much benefit I don't think so. ASC (American Skiing Corp) was on top of the world and has plummeted out of existence.
Powder did a stupid thing by cancelling the lifetime passes that existed. These weren't very many and they just got bad press for it. I've talked to a longtime shop owner up there. He's said how Powder has not given out the thousands of tickets Killington used to give to shops on the access road. Actually, he wasn't really upset and thinks Powder isn't doing that bad of a job so far.
I disagree with some of this...
First, Killington generated very good operating profit when ASC owned the place. ASC had $400 million in debt where they were paying up to 13.75% interest on the money. It doesn't matter how well your portfolio of ski resorts are doing when you are bleeding out $50+ million per year in interest payments. Really bad finance killed ASC. Their ski resort portfolio always generated an operating profit. The only exception was Sugarbush which they ended up dumping for next to nothing. Killington probably only does around $40 million in revenue. Their operating profit is likely a little north of $5 million. POWDR was able to install a high speed quad this summer from that operating profit. Early on, Chris Nyberg told the town "We will eat what we kill." Looks like they're doing that.
Second, spring skiing is profitable. You run one lift. You mostly operate the mountain with your salaried people so your labor costs are minimal. You don't have to sell many lift tickets or much beer to show a modest profit. In the Preston Smith era and in the first 6 or 7 years of ASC ownership, Killington sold a spring pass. That more than offsets the cost of blowing the base to make June. You're only blowing snow on one trail, not the whole mountain. POWDR has no understanding of the eastern drive-to market and Chris Nyberg is from Oregon and has no understanding of the eastern market. In the Preston Smith era, they marketed the hell out of their spring product. First to open and ski until June was the Killington brand. The resort had a steady stream of marketing events in the spring to draw people and turn it into a huge party. A huge mogul contest party in mid-April (not March), a Grateful Dead event called Sunshine Daydream, Pond Skimming, a May 1 Slalom, Ski House Races, a Triathalon, a June 1 Slalom. After 2 months of spring skiing at Killington with the constant weekend party, you checked into the Betty Ford clinic.
Third, buying the assets of Killington from ASC rather than buying Sherburne Corp and Killington Ltd meant that POWDR did not inherit the lifetime pass obligation. If you have a lifetime membership at a health club and they shut the doors. The next owner who bought the equipment and signed a new lease on the building is certainly under no obligation to honor your lifetime membership. Very few people were affected and it was smart business. Some of those people are very vocal chronic complainers about POWDR but nobody said life was fair. The average flatlander coming up for a weekend who stays at a condo and buys day tickets doesn't know or care about the ownership change and doesn't have any idea that some people lost lifetime passes at the ownership change.
You also make it sound like comp tickets are a good thing. In the Preston Smith era, it was really tough to score a comp ticket at Killington. For example, ski shop owners and managers could get them. Ski shop employees couldn't. All POWDR did was to unwind what ASC had done to the place. The season pass, inflation adjusted, is still cheaper than it was when Preston Smith owned the place. The break even always used to be 20 days. If you pro-rate today's pass to a 5 month season instead of a 7 month season, it's still cheaper since it breaks even in 13 days. Preston Smith also didn't offer a blackout pass which, at $650, is still the deal of the century. You break even in 8 ski days.
Skier visits are down significantly. I'd guess they did around 650,000 this year. POWDR chased away the bargain hunters by killing off the $350 season pass, the discount ski club vouchers, and all the comp tickets. The mountain was delightful on weekends with all those people gone. People who say "I won't ever ski Killington. It's a zoo." should try it now. I've had a number of long conversations with people in the lodging and retail businesses. Condo bookings did very well. The ski shops did very well. The people who ski Killington now are the ones who spend money. A lot of them are from Canada, the UK ,and Europe and they look at weak US dollar retail prices on the Access Road as a 50%-off sale. The people POWDR chased away mostly didn't stay in town and they didn't spend much money during the prime retail period when people are paying near-list price for things. The bar business was slow the first half of November when it's usually busy with all the share house people and the tumbleweeds were blowing down the Access Road the last weekend of April. The places that traditionally do well in the spring like the Grist Mill deck and the Lookout were pretty quiet. That's the only real slowdown I'm aware of and those businesses all had a very good peak season.
Killington ran lean this year. They laid off a significant number of people right after the ownership change. That's a business decision faced by every business to control costs. If you haven't made yourself essential to the business, you're expendable. As a customer, there were some times that running lean was a little annoying. Vermont had a larger than normal number of ice storms and when the resort was stressed, they didn't have the staff on hand to quickly de-ice the lifts and get everything running again. There were a couple of times when they got an ice storm on a Wednesday and they didn't start digging out key lifts like the Superstar Quad and the Needles Eye quad until Saturday morning. As a customer, it was mildly annoying.
It remains to be seen how Killington does in the medium term. They slashed their marketing budget significantly. They've lost the Boston market to Boyne. They've lost a big chunk of the Hartford market to Okemo which now logs almost as many skier visits as Killington. That leaves metro-New York. $4.00+ gasoline prices may deter a slice of that market from the 4+ hour drive when there are closer alternatives. With no early opening and late closing hype, people are no longer going to associate Killington with snowmaking. Okemo and Mount Snow market their snowmaking constantly. In a lean snow year, there's no telling what this new Killington brand, whatever it is, will do for skier visits.
Personally, my only beef is over the shortened season. If I had kids, I'd have a beef at the way they jacked up prices on kid programs. I think that's a real mistake.