One of the most popular passes in the business today is Vail’s Epic Pass. Vail announced last month the purchase, for $50 million, of Stowe Mt. in Vermont, one of my all-time favorites in the East. As Josh Dean writes in Men’s Journal, here’s why it’s important:
As the CEO of Vail Resorts, the aggressive 800-pound gorilla of the ski business, Katz is one of the most powerful people in the outdoor industry. Since he took over in 2006, Vail Resorts has evolved from an operator of five mountains into a global hospitality Goliath with a seemingly unquenchable thirst for acquisitions. At $538 million, the Park City–Canyons deal, which created the largest ski resort in the United States, was the priciest in the history of the sport. This past August, the 50-year-old Katz one-upped himself by capturing the crown jewel of North American skiing, British Columbia’s Whistler-Blackcomb Resort, for $1.06 billion. And in February the company made its first East Coast acquisition, snatching up Vermont’s Stowe Mountain Resort, for $50 million. That sent Vail Resorts’ stock price, already one of the best-performing on Wall Street, up to more than $180. This would be an impressive feat in any business; but in skiing, a declining industry with a history of corporations ruined by ambitious expansions, it’s downright unheard-of.
Among skiers, the idea that Vail Resorts thrives while most everyone else struggles inspires both awe and revulsion. Skiing may be big business, but it clings to its scrappy mom-and-pop core. The sport was built by people who moved to the mountains to chase adventure and subsequently have watched their beloved sport be subsumed by rich people who turn their small towns into crowded, pricey tourist destinations. Vail Resorts is the corporate embodiment of this phenomenon.
Last summer, shortly after the United Kingdom’s Brexit vote to withdraw from the European Union, a blogger known as the “Angry Snowboarder,” in Breckenridge, Colorado — whose resort has been owned by Vail for nearly two decades — wrote a spoof press release announcing “Brecksit,” a measure by the town to rid itself of the “evil power money hungry corporation that is destroying our village.” Longtime Vail watchers appreciated the joke. Ski shops in Colorado have long sold vail sucks T-shirts, and within days of the Whistler purchase, fuck vail bumper stickers started to appear on vehicles around British Columbia.
At the same time, there’s a good chance that more than a few of those motorists will be lining up this fall to purchase a Vail Epic Pass, Katz’s signature innovation. He introduced the concept in 2008 — a season pass to all the company’s resorts (which then numbered five) — for $579, a price so spectacularly low that people didn’t believe the offer was legit. Last season the company sold more than 650,000 Epic Passes at $809 apiece, generating a ridiculous $525 million in cash for services not yet rendered. There are Epic Pass holders in all 50 states and in 99 countries. And with every new property, Katz builds on the pass’s value, attracting more buyers from more areas in an industry that is flat at best.
The Epic Pass explains why, starting in 2012, Katz picked up three mom-and-pop mountains in the Midwest: Wilmot, located halfway between Milwaukee and Chicago; Mount Brighton, near Detroit; and Afton Alps, outside Minneapolis. None of these will ever be considered world-class, but that’s not the point. “We get access to 800,000 skiers in Chicago and 400,000 each in Detroit and Minneapolis,” Katz says. At those smaller resorts, a season pass was already as much as or more than an Epic Pass, so buyers get that, plus improved facilities. But more important, when those Midwesterners plan a big annual trip out West, they’ll be taking their Epic Passes to a Vail-owned property — in California, Heavenly rather than Squaw; in Utah, Park City instead of Snowbird — and buying their chili bowls and replacement goggles at Vail-owned shops and restaurants.
Vail Resorts now has some 30,000 employees; 42,547 acres of skiing; and, last year, more than 10 million skier visits and $452 million in revenue, up from $241 million in 2013. It owns and operates 30 lodges and more than 200 retail shops. And that’s just the beginning. The important point, Katz says, is that Vail is not just collecting resorts. “We want resorts that make our network more powerful, sophisticated, and smarter,” he explains. And you can be sure Katz is kicking plenty of tires. “There are other areas of the world,” he says, places like Japan and China, which would unlock even more massive numbers of new Epic Pass buyers — and in the process make Vail, along with its CEO, all the more dominant.
Read Part I here.