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Copper Mountain sold to Powdr Corp

post #1 of 47
Thread Starter 
http://business.transworld.net/news/powdr-corp-buys-copper-from-intrawest/

Intrawest and Powdr Corp have reached a “definitive purchase agreement” for Copper Mountain Resort. Intrawest CEO Bill Jensen, who has been public about Intrawest’s intent to sell off some of its assets to pay down debt, announced the Copper deal to Intrawest employees today via email and said the deal is expected to close in December.


Lets see if Powdr Corp can do a better job at managing Copper. Intrawest always struggled with Copper since it was not a true destination resort.
Edited by CR0SS - 11/17/09 at 12:06pm
post #2 of 47

If their(Powdr) management of Mt. Bachelor is any indication, don't plan on things getting any better!

post #3 of 47
I hear that lift maintenance and maintenance in general is a big problem at Mt. Bachelor.
post #4 of 47

Wow, what horrible, horrible news.  Vail resorts must be loving this.  So much for the crown jewel of Summit/Eagle counties.  You can say what you want about Intrawest, but they provided a good experience for their customers.  Just a few examples: excellent, timely bus service to and from the free parking, Tucker Mt. Snowcat, great food at a reasonable price (when you factor in the passholder discount), etc.  Not to mention lifts that were safe and good early-season snowmaking.  And then there was the Rocky Mountain Super Pass (courtesy of Intrawest's ownership of Steamboat and WP) keeping Vail Resorts pass prices in check. 

If the rumors about Powdr Corp's bargain basement management approach are true, the repercussions are going to be felt across the county as their passholders bail to Vail Resorts.  And if the passholders bail, so goes the mountain.  I hope they understand just how hard it is going to be for them to hang onto us passholders.  I suspect that most of us are already mentally gone on hearing this news.  If they don't spend this season winning us back, it's going to be a mighty empty mountain next year.  It sounds like next year my second pass might be at Loveland and I won't even have to agonize about it. 

post #5 of 47
Two years ago, there was a very similar negative reaction to the purchase of Killington by Powdr. I've minimal first hand experience about Killington, and, I hope other Bears who ski there more often weigh-in with their experiences.

My limited observations are that Powdr has done a better job at managing K'ton than was predicted by many. For sure there has not been much K'ton bashing, and, the recent thread about this year's opening day sounded pretty positive. My group of friends who do a week at K'ton each spring remains committed to returning this March.

Copper may be very different, but, it is a jewel and needs to be treated as such.
post #6 of 47
With no competition, Vail is free to get rid of its current bargain basement pass prices.   Actually, all the resorts can now raise their pass prices next season.
post #7 of 47
As a Copper pass holder, I am not very excited about this news especially considering what Powdr charges for a season pass at Killington $1,250 and Park City $1,450.  I suspect that they will attempt to raise prices and the other areas will follow suit.
post #8 of 47
I wonder what this means for programs like the Copper/WP Fourpass. I've been able to ski the past few years pretty much entirely because of the Fourpass program. If pass prices go up as everyone seems to be suggesting, the Fourpass might go up significantly or even disappear. Luckily, I'll qualify for senior discounts at many places in a couple of years.

I have a WP Fourpass for this year, but will Intrawest continue the program without Copper in the mix?
post #9 of 47

Copper is in a tough spot because they have to compete with Vail's five mountain pass.  I think they would be foolish to try to raise pass prices in the environment they are in.  Vail has got the sweet spot on pass prices with the Epic pass.  I suspect that Vail would actually lose revenue if they had to increase prices.  So my guess is that Vail would stay put on pass prices and happily convert Copper customers to an Epic pass.  Copper has to know this.  For Coppper to increase pass prices--especially when they would be offering less value--would be suicide.

If Copper wants to keep selling passes--especially if they are now reduced to a single mountain offering--they will have to stay well below Vail's prices.  Otherwise, why would anyone buy a single mountain pass when for the same price (or just a little more) they can get a five mountain pass?  Plus they are also competing with Loveland, Winter Park, and to some extent El Dora.  Copper is a great mountain, but there are a whole lot of other choices that are almost as good.

To me, Vail Resorts is the key.  They hold all the cards and as such, the rest of the Front Range resorts have to peg their prices to what Vail does.

post #10 of 47
Quote:
Originally Posted by Living Proof View Post

Two years ago, there was a very similar negative reaction to the purchase of Killington by Powdr. I've minimal first hand experience about Killington, and, I hope other Bears who ski there more often weigh-in with their experiences.

My limited observations are that Powdr has done a better job at managing K'ton than was predicted by many. For sure there has not been much K'ton bashing, and, the recent thread about this year's opening day sounded pretty positive. My group of friends who do a week at K'ton each spring remains committed to returning this March.

Copper may be very different, but, it is a jewel and needs to be treated as such.

At Killington, it took almost 2 years for Powdr to realize that their preconceived notions of what it means to run an eastern ski area and who their customer base is were off-target.  This had the pleasant side effect of thinning the on-slope crowds significantly.  They're starting to get it now, and I've heard their season pass sales are up 11% this year.  Kudos to Powdr for keeping K open this past Sunday as the wrod melted away. 

They're gradually improving the failing infrastructure left by the previous owners (leaky snowmaking pipes, bathrooms, etc.)  And they've installed 1 new quad and closed a lift and two trails with dangerous crossings.  The rule is that all improvements must come from Killington's profits -- no funds flow from Powdr corporate to the ski area, only in the reverse direction.  Expect no infrastructure investment from Powdr corporate into Copper.  Copper employees take note:  the employee population at K has been reduced, especially the year-round population, since Powdr took over.  Another cost saving measure was to close most lodges midweek and to close their 7th, family-oriented mountain (Pico) 2 days a week.  They're restoring partial midweek lodge service, but Pico is still only open 7 days in holiday weeks.

At Killington, Powdr seems much more focused on the day ticket customer than on the passholder, especially in their first year.  They upped the price of passes and shortened the season.  In the first year, they also refused to sell any form of discounted day tickets, but they have slowly introduced a stream of discounted products targeted at slow weeks.  A non-blackout adult pass now costs $1,249.  The informed speculation is that Powdr actually wanted to drive off some of the old, low-margin passholders to enhance the day ticket customer experience.  (Passholders generally bring their own lunch, don't buy lessons, don't lodge in resort housing, and frequent off-resort bars.)  On a positive note, this year K tried to open earlier than their stated mid-November opening but mother nature hasn't been very cooperative.

With their partner SP Land, Powdr is still trying to convert Killington from a ski area with a vibrant access road business community into a classic western "company town" ski RESORT.  The current proposal calls for the destruction of most parking and the creation of distant remote lots.  Anyone who's ever ridden their shuttle bus service shudders at this thought and some season pass holders have said they'll leave when this happens.  The bottom line is that Powdr is trying to make the best of a bad business deal:  they partnered with SP Land to acquire Killington and turn it into a Stratton, but it's not and never will be.  The Copper community should work to politely help Powdr understand Copper's unique value proposition and identity so that any decision by new management to change Copper's identity is well-informed.
post #11 of 47
Quote:
Originally Posted by sharpedges View Post


With their partner SP Land, Powdr is still trying to convert Killington from a ski area with a vibrant access road business community into a classic western "company town" ski RESORT.  The current proposal calls for the destruction of most parking and the creation of distant remote lots.  Anyone who's ever ridden their shuttle bus service shudders at this thought and some season pass holders have said they'll leave when this happens.  The bottom line is that Powdr is trying to make the best of a bad business deal:  they partnered with SP Land to acquire Killington and turn it into a Stratton, but it's not and never will be.  The Copper community should work to politely help Powdr understand Copper's unique value proposition and identity so that any decision by new management to change Copper's identity is well-informed.


 
Intrawest already did all that.
post #12 of 47
Copper also had a deal with the Boy Scouts for two steeply discounted ski days in December that has been running for a number of years. I've heard numbers of upward of 1500 people take advantage of this deal each year. I wonder if this year might be the last one. 
post #13 of 47
Don't fret yet, I think Powdr realizes the price points that exist is Summit/Eagle.  They would not have made this acquisition without proper due diligence.  

ITW is in a bad place right now and this is in my opinion is only the first piece of the puzzle as their start to shed properties.  You also need to keep in mind that the City of Denver still owns WP and Intrawest just manages the resort aspect of the operations.  By losing the Copper property, ITW is also devaluing their Season pass offerings as well.  Remember that as it stands now, now days at Steamboat are inluded in the Super Pass.  You have to get the super pass plus or ulitmate pass to include steamboat. 

So I expect more news out of the ITW camp in the coming months and only when that news stops breaking, will we see the full effects.
post #14 of 47
Thread Starter 
Intrawest announced last spring that most of their properties were on the market. I think Steamboat, Whistler and, one other were the only ones they are not actively trying to sell. I also heard Vail was trying to off load Keystone and Heavenly.
post #15 of 47
I think that Powdr will do fine with Copper, though it will be a different beast (from a corporate standpoint) than what has existed under Intrawest.

I had an inkling that Powdr was looking into purchasing Copper back in the summer, when John Cumming (CEO of Powdr) mused, via Twitter, about the loss-leader pricing of season passes in Colorado (e.g. the Epic Pass, the Rocky Mountain pass, et al) and whether that was a sustainable business model.  Their current properties charge premium prices for unlimited/unrestricted season passes for each resort, which will be a shock to the Colorado skiing fans who have loved the season pass bargains.  I'm sure that Cumming and Powdr will think long and hard about the season pass issue going forward: increase the price too much, or leave some of the mutual pass agreements, and they could stand to lose a lot of loyal fans.  But keep the prices artificially low and stand to barely break even, year to year.

As long as money is reinvested into resort infrastructure and staffing, that's great.  Luckily, Copper has decent infrastructure, if not the most all-encompassing (i.e. it's no Vail), so money can be put into keeping the mountain great.  Copper's gift is its mountain layout - one of the best in the country, if not the world - and that's there, no matter what.

Ski resorts are not great money machines these days.  Being a loss leader only pays off if big ticket items (e.g. high-luxe vacations, condo rentals and sales, full-price walk-up ticket sales) continue to move.  I can't imagine that VRMC is selling the Epic Pass without also moving a lot of big ticket commodities - and if they are, don't expect the Epic program to continue at a low price.  VRMC's main properties - Vail, Beaver Creek and Breckenridge - are all destination resorts.  Copper is more of a day-tripper place that happens to have a few resort trappings (though many who go there as a destination stay in Frisco or Dillon), so it can't be run in the same way as the VRMC properties.  And I think that Powdr knows that all too well.

So give it a couple of seasons.  Having seen Killington evolve and improve since Powdr's purchase has been something.  The first season was rough, as Killington had very little money on hand for capital improvements and Powdr was learning to run a New England resort.  They pissed off long-time passholders by closing down the lifetime pass program.  They stuck to a more traditional operating season schedule, which offended the early and late-season hardcores.  They had a lot to learn.

And they did.  They stayed open a little later than planned last spring.  They've already opened up this season, far earlier than in 2008.  As mentioned before, they've invested in capital improvements with lifts and buildings.  They listened to the locals and die-hards and adapted - not whole hog (as that was killing the resort under its previous ownership), but step by step.  Many people are noting that the Killington vibe is returning, bit by bit.

I can only imagine that Powdr will have an easier time in Colorado.  Sure, it won't be perfect, but it will be easier than with Killington (or even Mt. Bachelor).  Let's see what happens.
post #16 of 47
It's already cost me 3 days of free skiing.

All summer Taos has advertised exchange days at 3 Colorado resorts. Telluride, Durango and Copper.

After I bought my pass, http://www.skitaos.org/contents/view/trade_info still says

Free Days at Three Colorado Resorts!


Yet only Durango and Telluride are listed.

I'm not too upset about losing free skiing at Copper, but it does all but guarantee that I will not make it there this season. I was looking forward to skiing there and spending a few bucks...not now.

I wish Powdr great success in this toughened economy, but they will not get it by having the beancounters make all the important decisions. Those days are over.
post #17 of 47
Discounted season passes aren't just loss leaders; they are forward sales.  In other words, rather than depend on the vagaries of the weather to drive your revenue, you sell a season pass at a price that generates sufficient revenue to cover your costs.  Then the day-passes provide the profit.  Its a way to put more certainty into your business model, rather than ride the rollercoaster where the weather determines whether or not you make money.

Copper is not a destination resort.  It never has been, and given the limited land, probably never will be.  So, if you want to compete with Vail, then you better be sure that you've got the revenue to cover your costs, which are predominatly fixed.  If Powdr thinks they are going to significantly raise season pass prices, I suspect that they will find a lot of disappointment in their decision to buy Copper.  That's most likely a easy way to really drive the resort into a deeper hole.

Mike
post #18 of 47
Quote:
Originally Posted by habacomike View Post

Discounted season passes aren't just loss leaders; they are forward sales.  In other words, rather than depend on the vagaries of the weather to drive your revenue, you sell a season pass at a price that generates sufficient revenue to cover your costs.  Then the day-passes provide the profit.  Its a way to put more certainty into your business model, rather than ride the rollercoaster where the weather determines whether or not you make money.

Copper is not a destination resort.  It never has been, and given the limited land, probably never will be.  So, if you want to compete with Vail, then you better be sure that you've got the revenue to cover your costs, which are predominatly fixed.  If Powdr thinks they are going to significantly raise season pass prices, I suspect that they will find a lot of disappointment in their decision to buy Copper.  That's most likely a easy way to really drive the resort into a deeper hole.

Mike


I generally agree with you.  I just don't see how Copper as a stand alone resort can compete with VR in either the destination business or locals business.  It will never be a high priced destination resort with it's small village location right on I-70.   From a pass holder perspective,  I buy my pass there only because of my kids and the days I get at Steamboat.  The VR passes are a much better deal for most pass holders.  If Copper wants to sell season passes vs the VR multi-mtn passes they are going to have to be substantially cheaper.  They can't make the terrain better than A-Basin, they can't make the town better than Breck or Vail.  They can't make the snow better than Vail or BC.   I guess they could try to go really upscale like BC or Deer Valley but I don't see that going over well with freeway right there.  From a skiers perspective where is the value proposition?  Maybe I'm just unimaginative but I can't think of anything they could do to keep my business as a stand alone pass if they charge pass prices near or above VR rates. If they can't stay competitive with the local business who thinks they can make significant inroads in the destination business??

I don't get it.
post #19 of 47
Powdr totally screwed up Bachelor, and has received the message of disapproval loud and clear.

They have some new management and a program to address their shortcomings.  I think they are serious about it, but everyone is in a "show me" frame of mind.
post #20 of 47
Quote:
Originally Posted by geoffda View Post

...If they don't spend this season winning us back, it's going to be a mighty empty mountain next year.   

Interesting.  I read this and come up with an investment strategy that shifts my pass portfolio to include a greater share in Cop time next season  

post #21 of 47
Quote:
Originally Posted by DonDenver View Post

Interesting.  I read this and come up with an investment strategy that shifts my pass portfolio to include a greater share in Cop time next season  


It was awesome last season at Copper.   Untracked powder days after a storm and no crowds.  The crowds were all at VR places. 

I'm going to be up at WP tomorrow.  Going to schlep more of my gear up there and organize my locker.  I need to claim my spots in the boot rooms too.
post #22 of 47
Quote:
Originally Posted by daysailer1 View Post




It was awesome last season at Copper.   Untracked powder days after a storm and no crowds.  The crowds were all at VR places. 

I'm going to be up at WP tomorrow.  Going to schlep more of my gear up there and organize my locker.  I need to claim my spots in the boot rooms too.
 


I agree with the no crowds part but untracked powder days after a storm?  Come on...there wasn't even untracked powder the afternoon of a storm on a weekday unless you are talking about very scattered and isolated pockets.  I skied over 50 days at Copper last year and while it was gloriously uncrowded compared to VR properties, let's not get carried away
post #23 of 47

I agree, Copper was great (from a skier's perspective) last year as it was pretty deserted.  However, that's not a viable proposition, as they eventually lose too much money and shut terrain (like getting rid of the cat mid-week) or go out of business altogether.  I think that the issue last season was that Intrawest tried to push season pass prices too close to the VR offering.  They got spanked.  Hopefully, Powdr will take that as a lesson.

Mike

post #24 of 47
When Copper shut down the cat midweek, there was definatly untracked powder to be had on the back bowl.  Yeah, you had to do some hiking to get to it, but it was there.

As I said above, there are still more dominos to fall.  I expect to hear more announcements about property shifts before the end of the year.  Intrawest resorts have experienced a high turn-over of executive level positions at a number of their resorts in the last 6 weeks.  This leads me to believe that more news is coming.

Just call this speculation, but I would not be surprised if WP ends up under Powdr control before next season as well.  Again, it is no secret that Intrawest has to pay off a lot of debt and quickly and if it is to the points that the banks are making the decisions, then any reasonable offer will probably be accepted. WP is more of a mgmt situation from a mountain perspective, but Powdr is probably in the best position to take over unless VRMC would get interested and be willing to take on the anti-trust fight that may follow without unloading one of their other Summit/eagle properties.

And as Haba said, discounted pre-season pass sales aren't as much a loss leader as they are guaranteed income.  A number of resorts actually come out ahead on those sales.  The vast majority that use them, mostly come on overcrowded weekends anyways, while destination skiers buy full price passes during the week.  I remember speaking with one of the season pass sales reps at an Intrawest resort last year about this exact subject.  The employee said that while locals do get a great value out of the passes, a vast majority of the Super Pass sales were to people that lived in the front range areas or "out of state" and overall, the average pass use was between 20 and 30 days.  So in reality "assuming one can use various discounts available to purchase tickets", the resort may have lost out on 15 days of lift ticket revenue but gained concession sales, etc from those individuals who may not have skied at all at the property had the resort not offered a discounted pass. 
post #25 of 47
Quote:
Originally Posted by kkerley33 View Post

WThe employee said that while locals do get a great value out of the passes, a vast majority of the Super Pass sales were to people that lived in the front range areas or "out of state" and overall, the average pass use was between 20 and 30 days.
You heard wrong....the average use is no where near 20 days much less 30.   It's right around 10.
post #26 of 47
Copper could easily become a more appealing mountain if Powdr just puts up a lift to Tucker or Jaques(sp).  When was the last time that Copper actually expanded its terrain?
post #27 of 47
I seriously doubt that Powdr is going to put any capital into Copper, especially in the way of lifts.  Where's the payoff in expanding terrain?  It isn't likely to generate much in the way of additional lift revenue.  If they had some new developments for sale, it might tie into that.  Right now, the play is likely to increase the return on existing capital.

Mike
post #28 of 47
The reason I would suggest capital in new lifts is because it would only take 2 or 3 to give Copper more accessible terrain to customers than Vail can give to theirs.
post #29 of 47
Quote:
Originally Posted by UGASkiDawg View Post



You heard wrong....the average use is no where near 20 days much less 30.   It's right around 10.
 

UGA, that just goes to prove my point even more.  At 10 days, those season passes that cost $400 to $500 are not actually costing the resorts any money given that just about any day of the year, there is a coupon available somewhere or someone with available buddy passes to get you lift tickets for $50 or less at most of the Summit Resorts.
post #30 of 47
Quote:
Originally Posted by habacomike View Post

 Where's the payoff in expanding terrain?  It isn't likely to generate much in the way of additional lift revenue. 

Mike

So was it my imagination that I couldn't get a parking spot at the Basin after the Zuma lift went in?
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