Are Mom-and-Pop Ski Resorts Going the Way of Rope Tows?

A group of well-financed resorts is buying smaller competitors

A surprising number of North American ski resorts are being bought and traded in an unprecedented round of Alpine ``Monopoly.''

In the past year, seven major United States and three Canadian resorts have been acquired, totally or in part, by bigger players in the glitzy world of Alpine skiing. The buyouts appear to be the next step in a trend whereby well-financed and well-managed resorts with expensive snowmaking equipment and modern lifts have been taking market share from faltering and often undercapitalized ski areas.

For consumers the trend means better planned and managed ski areas, plus, more interchangeable lift privileges within resort ``families.'' Each multiple-mountain resort enterprise is offering skiers ``frequent-flyer''-type deals for being loyal.

One premise of these buyouts is that fewer but bigger ski areas can attract newcomers to a sport that has seen little or no growth in the last 15 years (except for the explosion of snowboarding among the young). Industry observers wonder if the rash of mergers will merely enhance the battle for market share. Some of the estimated 10 million to 15 million US skiers worry that less competition may mean higher prices for an already expensive pastime.

In any case, the merger mania continues.

``There's still going to be significant consolidation,'' says Hugh Smythe, president of the resort operations division of Intrawest, the big Canadian real estate company based in Vancouver, British Columbia.

Intrawest owns Blackcomb, just north of Vancouver, next to the longer-established Whistler. Together these make up North America's top-rated and biggest ski resort. Intrawest is pouring $400 million into newly acquired Mont Tremblant in Quebec and has just bought Stratton Mountain, in Bondville, Vt., from its Japanese owners.

Mr. Smythe says within five to 10 years there will be ``significantly'' fewer ski areas. Presently some 516 operate in the US, already about 30 percent fewer than a decade ago. ``Independents will get swallowed up or close down or learn how to serve a niche market,'' Smythe says. But they better not get ``caught in the middle'' - that is, try to appeal to the general public by operating a mid-size resort without any unusual features. Surviving resorts will get better, he adds, but prices will rise.

The recent frenetic pace of mergers probably will slow. But at least four of the new resort combinations - S-K-I Ltd. (Killington, Mt. Snow, and Haystack in Vermont; Waterville Valley, N.H.; Sugarloaf, Maine; Bear Mountain, Calif.), Intrawest (Blackcomb and Panorama in B.C.; Tremblant, Quebec; Stratton, Vt.), LBO Holdings (Sunday River, Maine; Attitash, N.H.; Sugarbush, Vt.) and Fibreboard (Northstar, Sierra-at-Tahoe, Calif.) - are actively seeking new acquisitions.

Possible targets include some major resort names (Copper Mountain and Purgatory in Colorado, Mt. Bachelor in Oregon, to name but three).

But don't overlook smaller areas (and their steady streams of revenue) close to major population centers in Massachusetts, New York, Pennsylvania, and the Eastern Townships of Quebec, says Phil Gravink, president of Attitash, recently acquired by Sunday River owner Les Otten.

Mr. Gravink attributes the buyout binge to a confluence of forces, including the end of the boom in second homes and condominiums; the collapse of real-estate values and the resulting failures of friendly local banks; a long cycle of fickle weather; heavy competition from warm-weather vacations; and a populace more worried about job security than where to go skiing on the weekend. And, some senior ski-area founders and board members simply wanted to cash in on their investments.

Japanese owners like Stratton's, who had bought high not long ago, were willing to sell low. The result, Gravink says: Areas selling for as high as $75 to $80 per skier visit in the 1980s now go for $10 to $35 per skier visit.

Significantly, S-K-I bought all of Waterville Valley's ski-related assets for only $10.2 million while it is paying $15 million for Killington's new heated, art-deco gondola.

Still, after last summer's buy-outs the prospect of greater economies of scale in purchasing and marketing helped to push publicly owned S-K-I stock up some 50 percent.

As for the mom-and-pop ski areas that have brought so many to the sport and to winter's mountains, many will go the way of the rope tow, industry observers say.

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