On Monday, Aspen Skiing Company and private equity firm KSL Capital Partners announced their purchase of Intrawest Resort Holdings for $1.5 billion, including the company’s outstanding debt. The merger places Steamboat Springs Resort and Winter Park Resort under the ownership of Aspen-KSL. Intrawest’s other assets, which include Quebec’s Tremblant, Ontario’s Blue Mountain, West Virginia’s Snowshoe, Vermont’s Stratton ski area, and Canadian Mountain Holidays have also changed hands. Aspen Skiing Company, or Ski Co., was the third largest resort company in North America prior to the merger, behind Whistler Blackcomb in Canada and Vail Resorts, also headquartered in Colorado. With the new properties, Aspen-KSL ranks number two in terms of resort holdings.
Aspen Ski Co. currently owns four ski areas: Aspen Mountain and Highlands, Buttermilk Ski Area, and Snowmass Mountain. Superior in magnitude, Vail Resorts owns 11 ski areas across the U.S., including Vail, Breckenridge, Beaver Creek, and Keystone all in Colorado. After the merger with Intrawest, Aspen-KSL will control six major resorts across the state of Colorado. Competition from Aspen-KSL will pressure Vail Resorts to focus on their Colorado resorts as well as their new acquisitions: a ski area in Vermont purchased for $50 million, and Canada’s famous Whistler Blackcomb, secured for over $1 billion.
The sense of rivalry between Vail and Aspen has intensified in the past few years, in part due to the release of Vail Resort’s Epic Pass in 2008. Both lift tickets at Aspen Resorts and the all-inclusive Epic Pass get more expensive every year. In 2008, the Epic Pass sold for $459. This season it costs $859. As the number of resorts each company owns increases, so does the cost of visiting them. However, Aspen has a leg up; they might not own as many resorts as Vail, but they have been in business for over 30 years longer. KSL, the private equity firm and Aspen Ski Co.’s partner in the merger, was founded in 2005 by Michael Shannon, a former president and CEO of Vail Resorts. Intrawest’s CEO prior to last year was Bill Jensen, also a former president at Vail Resorts.
The merger was inspired by Intrawest’s desire to settle debt that has lingered since the economic decline in 2006. As of Dec. 31, 2016, Intrawest owed $536.8 million. The CEO, Thomas Marano, told the Denver Post that he is looking forward to collaborating with the Aspen team. Intrawest and Aspen share the common goal of expanding their companies’ resort opportunities in Colorado.
So why the rivalry between Aspen and Vail? First of all, the state of Colorado attracts one-fifth of all the ski tourists in the U.S.—the industry is booming. Additionally, after the merger, Aspen and Vail will each control a number of major resorts in the state. The acquisition would enable Aspen to market a pass, similar to Vail’s Epic Pass, under the corporate management umbrella. Vail Resorts has increased the price of their season pass by five percent since last year and by 43 percent since its advent in 2008, averaging a five percent increase each year. As of now, the Epic Pass is unique to Vail Resorts. However, the merger could inspire Aspen Ski Co. to follow their lead and develop a multi-resort pass for Colorado natives and the slew of tourists who frequent the slopes.
It seems as though Vail Resorts prioritizes owning property over the operation of individual resorts. Aspen Ski Co., on the other hand, is focusing on nurturing the relationship between themselves and Intrawest. The header on the page of the Aspen Ski Co. website features information on the new merger and reads, “Better Together.” In the past, Aspen has struggled to grow its market share. Acquiring Intrawest means increased share value for both Aspen Ski Co. and Intrawest. Monday’s Denver Post article on the merger noted, “[Intrawest] shareholders [will] get $23.75 a share, roughly 40 percent more than the company’s $17 share price in mid-January.”
Aspen Ski Co.’s CEO, Mike Kaplan, issued a statement regarding the merger: “We’re convinced this new venture will bring fresh perspectives to these unique properties, help them enhance the guest experience, and foster even stronger partnerships with the local communities. Aspen Skiing Company will continue to be operated separately from Intrawest and Squaw, but we plan to work together.”