Vail Resorts announced that it has entered into a contract today to acquire Heavenly Ski Resort in the Lake Tahoe area of California and Nevada from American Skiing Company. The acquisition of Heavenly, in addition to bringing greater diversification to its winter resort business, enables Vail Resorts to further advance its reputation as the leading mountain resort operator in the United States. The transaction is expected to close in 30-90 days for cash consideration of $102 million (including approximately $3 million of assumed debt), less a cash adjustment at closing of as much as $6 million depending upon the exact closing date. Therefore, the total net consideration is expected to be between $96 and $99 million. Heavenly's current EBITDA in fiscal '02 ending July is expected to be between $14.5 and $16.0 million.
With an existing bed base in the South Lake Tahoe area of 20,000 and nearly 800 additional Marriott-branded fractional and quarter-share ownership keys scheduled to be completed by November 2002 in the heart of South Lake Tahoe, Heavenly offers opportunity for growth for Vail Resorts. In anticipation of this expanded bed base, Heavenly opened a new $25-million gondola into South Lake Tahoe within the past 12 months.
"Heavenly is considered to be among the top ski and snowboard resorts in the United States. It offers tremendous winter and summer growth opportunity with its proximity to major metropolitan areas and has the potential to become much more of a national destination resort. This transaction will enable Vail Resorts to significantly increase our presence in the North American ski and snowboard resort industry, as well as to geographically diversify our winter revenues. Additionally, we are excited to be acquiring Heavenly at what we believe is an attractive price relative to its inherent and potential value," explained Adam M. Aron, chairman and chief executive officer of Vail Resorts.
Ranked in the top 10 most visited ski and snowboard resorts in North America and rated the 15th best overall resort in the 2002 SKI Magazine Reader Survey, Heavenly will become the fifth in Vail Resorts' portfolio of premier U.S. ski resorts -- all of which are counted among the 15 best resorts in the SKI Magazine survey. Vail Resorts owns and operates Vail, Beaver Creek, Breckenridge and Keystone, four of the best and most visited ski resorts in North America.
Heavenly operates 29 lifts, including six high-speed lifts and the new $25-million, eight-passenger gondola that runs year-round; a snowmaking system that covers 69 percent of its mountain trails; seven dining facilities; a terrain park and a half-pipe; and six year-round and nine seasonal retail/rental shops. A complimentary shuttle system and ample parking serve the resort's four separate base areas, two of which are located in California and two in Nevada. Heavenly has long been known for its staggeringly beautiful vistas and miles upon miles of cruising runs, steeps and bowls. Over the years, its superlative races and events made Heavenly a magnet for professional ski racers, celebrities and other colorful characters.
Over the next five years, Vail Resorts plans to invest approximately $25 million in on-mountain improvements, above an estimated $3 million per year in annual maintenance capital. Improvements will include upgrading existing facilities, building new on-mountain restaurant facilities, upgrading and replacing lifts and snowmaking systems and enhancing the resort's environmental efforts.
"Heavenly is the most visited ski and snowboard resort in the Lake Tahoe area. Given Vail Resorts' expertise in aggressively marketing and packaging our resorts and enhancing the guest experience through strategic capital investment, smart management and our commitment to quality, we believe we can grow Heavenly's skier visits in a relatively short period of time," said Andrew P. Daly, president of Vail Resorts.
December 6, 2001 - Snow Storms Create Surge in Ski Vacation Bookings; Resort Lodging, Airline Seats Still Available for the Holidays.
With several ski areas reporting record or near-record snowfall in recent days, skiing in December will be among the finest in years. And adding to the excellent snowpack is a bonus that Santa Claus almost never delivers: the opportunity to book last-minute holiday vacations to some of North America's top resorts, in some cases without paying a premium rate and without the usual minimum stay requirements.
According to the Ski Tour Operators Association, a trade group that represents 25 specialty travel companies throughout North America, there are still rooms available at premier resorts during the normally sold-out, high-season period of mid-December to New Year's, along with airline seats to major hub cities.
And while it's not too late to grab a quick getaway to the mountains for the holidays, it's also not too early to book some of the best deals in years during the normally slow period of January. "This is shaping up to be a bigger-than-usual ski travel month, because savvy skiers are picking up on extra discounts that lodges are offering this year," says SKITOPS President David Tanner, co-owner of Rocky Mountain Vacations in Glenwood Springs, Colo. "Our call volume and e-mail requests are at record levels."
It's rare to see a surplus of lodging this close to the holidays, adds Bruce Rosard, president of Moguls Mountain Travel in Boulder, Colo. "If people can be flexible with their flights, they will find space available, even at resorts such as Whistler, Vail and Aspen. Also, resorts that historically required seven-night stays during the holiday period are now accepting five-, four- and even three-night stays."
For example, skiers can book a three-night stay in Breckenridge over Christmas for as little as $869 per person, quad occupancy, including air and lodging. Or a four-night package at Big Sky that includes lodging at the new Holiday Inn Express/Mountain Inn and three days of skiing for at little as $474 per person, double occupancy.
Skier bookings picked up considerably after a series of major storms swept through the West. "Snowfall during Thanksgiving weekend really jumpstarted our sales, which for the last week of November were 52 percent higher than for the previous week," says Rosard.
Resorts and skiers have plenty to be thankful for. In Utah, where ski areas were bone-dry prior to the holiday, storms dropped 100 inches of snow in 100 hours at Snowbird, breaking the resort's record for November. Near-record snow fell in parts of Lake Tahoe and the Pacific Northwest, and abundant coverage was reported along the Rocky Mountains from Montana to southern Colorado.
One of the advantages of booking a vacation through a SKITOPS company is that consumers can get discounted bulk-rate airfares, which usually don't have the advance purchase restrictions or stayover requirements of published fares. Plus, bulk fares are an even better deal this season because United, a major ski country airline, has discontinued its fuel surcharge, thereby saving passengers about $40 on a round-trip ticket.
Although the sudden and sustained snowfall was the major catalyst in reviving ski vacation bookings, another factor may be the public's perception that the mountains are a safe haven from international tensions. A study just completed by SnowSports Industries America (SIA) showed that 57 percent of respondents would feel "very safe" at a mountain resort this winter. By contrast, only 37 percent said they felt secure in cities. The study also indicated that people planned to ski and snowboard a lot more this season.