For better or worse, the so-called Vail-ization of the U.S. ski industry marches on.
The Broomfield-based juggernaut on Wednesday announced it has entered into a long-term lease to operate Canyons Resort ski area in Park City, Utah. It makes the 10th ski area Vail Resorts operates in five states and its first in Utah.
“With 4,000 skiable acres, easy access to the town of Park City and $75 million in recent resort improvements, Canyons is a perfect complement to our collection of world-class mountain resorts,” Rob Katz, chairman and chief executive officer of Vail Resorts, said in a press release.
The lease is initially for 50 years with six 50-year renewal options. Canada-based Talisker Corp., which owns the ski area, still retains the development rights for 4 million square feet of real estate at the resort.
“Vail Resorts is the clear leader in the mountain resort industry and I am confident that they can replicate at Canyons the success they have delivered at resorts such as Vail, Beaver Creek, Breckenridge and Northstar,” Talisker CEO Jack Bistricer said in the same press release.
Canyons will be included in Vail's 2013-14 Epic Pass, which sells for $689 for adults. Last year, a pass at Canyons alone was $849. The Epic Pass will include "unlimited and unrestricted access" to Canyons, Vail, Beaver Creek, Breckenridge, Keystone, Eldora, Arapahoe Basin, Northstar, Heavenly, Kirkwood, Afton Alps and Mt. Brighton. It also includes five days at Verbier, Switzerland, and Arlberg, Austria.
The $75 million redevelopment at Canyons "is reflected in a top 10 ranking by SKI Magazine and No. 4 ranking by Outside magazine," Katz said. "We look forward to building on that momentum and including Canyons in our industry-leading season pass products, which next season will offer guests access to Colorado, Tahoe and Utah on one season pass, a first in ski industry history. We will also leverage our guest database and domestic and international sales and marketing efforts to continue to drive Canyons’ growth."
Under the terms of the lease, Vail Resorts will pay Talisker a minimum of $25 million a year, plus inflation. Vail will also pay Talisker 42 percent of earnings over $35 million, with inflation and capital improvements or other investments also factored into the equation. Vail Resorts said it expects Canyons' earnings to be about $15 million annually in fiscal 2014, excluding integration costs, and about $25 million in 2017.
"Vail-ization" is a term that's been bandied about for years, and underscored in a documentary "Resorting to Madness: Taking Back Our Mountain Communities," which portrays the publicly traded company (NSYE: MTN) as among the biggest culprits of profit-driven thinking and mountain development run amok.