(Host) Vermont’s largest family-owned ski resort was sold last week to a Florida real estate investment trust.
Management will stay the same at Okemo Mountain Resort. But the transfer of ownership reminds some in the industry of how challenging consolidation can be.
VPR’s Ross Sneyd has our story.
(Sneyd) For years, Preston Smith was Killington Resort. He founded the mountain and made it into the “Beast of the East,” as many refer to it.
When he retired and sold the business, a lot of things changed for other businesses and for residents of Killington, a quintessential company town. Many of those changes by Powdr Corporation haven’t been well received.
Powdr no longer honors what were supposed to be lifetime season passes. Businesses in town no longer get free lift tickets.
Ski consultant David Dillon represents some of those businesses. Dillon spoke by cell phone as he was driving up the mountain.
(Dillon) “Really, what it is is understanding that there has to be a new business model. When a company comes in and buys a property and evaluates what has transpired and what they’ve paid and they have a formula that differs from the predecessor, it creates a period of transition where people are getting accustomed to the new business model and how that impacts other businesses.”
(Sneyd) Dillon’s trying to smooth the transition in Killington.
He doesn’t believe the ownership change at Okemo will have the same effect in Ludlow.
Owners Diane and Tim Mueller sold to CNL Lifestyle Properties. But their company will lease the property back and the Muellers will continue to run the resort.
Bill Stenger of Jay Peak Resort says that will make all the difference in Ludlow.
(Stenger) “The Mueller family is going to continue to be very involved in the operations and will be responsible for running it. But it obviously changes the financial formula for them. And probably provides them a very significant amount of security in what is otherwise a pretty volatile and capital intensive industry.”
(Sneyd) Stenger says it’s vital for a resort the size of Okemo to have access to cash. Stenger knows. He recently led a local management team to take over ownership of his own resort.
That leaves Jay among a dwindling number of locally owned Vermont resorts.
So there are a few left. But industry analyst Mary McKahnn of the Snow Industry Letter says the days of the swashbuckling ski entrepreneur are largely over.
(McKahnn) “It’s very tough to operate a mom-and-pop operation as Tim and Diane did and be successful at it and it’s getting harder and harder.”
(Sneyd) Industry experts say it’s possible that more consolidation is on the horizon.
The troubled insurance giant AIG owns Stowe Mountain Resort. AIG is selling off assets and the ski area is believed to be on the block.
Stratton Mountain finds itself in a similar situation. It’s owned by Intrawest, a company that’s struggling. That’s because its own parent corporation is Fortress Investment Group. Fortress is a private equity fund that’s been hit by the crisis on Wall Street.
For VPR News, I’m Ross Sneyd.
AP Photo/Toby Talbot