The AlpineZone Ski Area Challenge was designed to provide a method for our forum members to get official answers to skiing-related questions directly from a ski area representative. Tim Boyd, President of Peak Resorts in Wildwood, Missouri, took the AlpineZone Ski Area Challenge and provided the following responses on 8/7/2007:
OldsnowboarderME: Is there any way a Granite Pass holder might be able to have a couple of discount vouchers in other to try at Mount Snow?
Tim Boyd: Discounted vouchers to Mount Snow are not included as standard benefits of the Granite Pass, but we plan to announce some offers in-season to cross promote the Peak Resorts family.
Greg: With the dissolution of ASC, there have been a lot of changes to the landscape of the Northeast ski industry. Peak Resorts comes along and scoops up Attitash and Mount Snow and within days of the closings announces truly aggressive season pass prices; reopens Mount Snow for one final weekend of skiing and riding; and most recently announces $7 million in upgrades to Attitash and Mount Snow. In contrast Powdr/SP Land purchases former sibling resorts Killington and Pico and immediate following the closings, takes actions that result in what many would consider one of the biggest PR disasters in the history of Northeast ski industry. To the casual observer it seems Peak has done every thing right and Powdr/SP has, well, done pretty much the opposite. How do you explain all this? How closely do you follow the goings-on at other resorts? Does what they do (or fail to do) impact decisions you make for your resorts?
Tim Boyd: First of all, I appreciate the fact that you think Peak has done just about everything right since we closed on Mount Snow and Attitash. However, I”m sure we haven’t been perfect. We’ve probably made some mistakes we won’t even realize until later. But we did come in with what we thought was a well-conceived plan and have been moving forward with implementing it.
In the case of Powdr, I really don’t have enough information to fairly assess all that has happened at Killington. I will say this: Powdr has been a very successful operator in the ski industry for a long period of time. That has not been by accident. Killington is an area with many challenges, in my opinion, and I believe Powdr will ultimately meet those challenges. They have the track record to prove it. Frankly, I hope they do. It has always been my belief that markets that have good successful operators will prosper. I believe that poorly run ski operations not only damage the market for themselves, but also damage the market for their competitors. The more well-run operations a market has, the more skiers get developed.
We try not to focus too much on what other resorts are doing for many reasons. One, we can’t control what they are doing anyway; two, it takes us off of our focus too much; and finally, other resorts aren’t really our true competition. Other activities, such as the casino industry, the cruise line industry, the indoor water-park industry, the weather, etc. take far more dollars from us than any of our competitors.
thetrailboss: Tim, we have some interest in seeing Mount Snow and Attitash extend their seasons as long as possible. Greg asks if you will extend the season at Attitash or Mount Snow beyond other resorts, considering Killington’s announcement that they will shorten their season from mid-November to mid-April, which is now in line with just about every other major Northeast resort? And thebigo notes that Crotched tries to be the first area in New England to be 100% open, and that they are aggressive at the start of the season and reopened this year following natural snow. Can we expect the same approach at Attitash and Mount Snow?
Tim Boyd: Our approach at both Attitash and Mount Snow will be not only to extend the season but to improve the overall conditions at both resorts. Honestly, the early opening has always been more important to me than the late season. Our customers always tell us when to close by simply not showing up. Early season, on the other hand, is completely different. We want to be open as quickly as possible with as much terrain as possible. This is when the demand is highest. What we have done at Crotched will be a very good barometer for what you will see at Attitash and Mount Snow.
OldsnowboarderME: What do you see as the greatest challenges after acquiring Attitash and Mount Snow? Are these purchases and indication in a change of direction in your company’s general business model? It seems like in the past your business model was more a long the line of the smaller ski area and not your larger resorts.
Tim Boyd: We have come to both Attitash and Mount Snow with the mindset that their greatest weakness is snowmaking. Not that they don’t have other areas that need improvement; however it has always been my belief that everything revolves around snowmaking. Without good snowmaking, you don’t need lifts, lodges, ski school, etc. I have a saying that some of our people get tired of hearing, and that is ‘the Best Snowmakers Win!” That is the Peak Resorts mantra and we bought Attitash and Mount Snow because we believe we can instill that mentality into these resorts.
We have changed our business model somewhat with the purchase of Attitash and Mount Snow as they clearly differ in size and scope from our other areas. I think it would surprise a lot of people to find out that many ski areas, despite what size they are, have many similar issues. Certainly all areas have challenges that are unique to them. However, with the obvious change in the recent climate, the emergence of terrain parks, the difficulty in finding labor, etc., all ski areas are starting to see many of the same issues. Since we are ski operators, not real estate developers, we don’t see this jump into larger resorts as significant as it might appear.
Vinny: Your other resorts seem to put the skiing well above real estate management. Is that your philosophy at Mount Snow and Attitash as well?
Tim Boyd: As I mentioned in the previous question, we are ski operators not real estate developers. We will continue to focus on the things we do best and let other people concentrate on their areas of expertise.
thebigo: One of the defining characteristics of Peaks is the use of fan guns. As I understand it they are significantly more expensive than traditional guns. Why is it that Peaks has such a strong preference for this type of snowmaking equipment, whereas traditional air/water guns are the strong majority elsewhere in New England? Will air lines be removed at Attitash and Mount Snow on the slopes scheduled to get fan guns?
Tim Boyd: Our experience with the fan gun technology has shown we get a better product for much less operating cost. With the escalating cost of power, we believe this is where the future of snowmaking is heading. The downside of the fan guns is their initial cost. They are expensive, as is the infrastructure needed to operate them. This is why they haven’t been used on larger mountains in the past.
For those of you that have been to Crotched, you know the dramatic difference in both quality and quantity of the snow by fan guns vs. the traditional air/water guns that are found at the other ski areas in New England. The amount of H2O that can be converted to snow is much greater with a fan gun and that snow can be projected much further. The additional “hang time” produces a drier snow and a better performance at marginal temperatures.
Fan guns won’t entirely replace air/water guns because of the narrowness of certain trails, especially in New England. There will still be a place for both technologies in the future. The combination of technologies, along with a little help from Mother Nature, will allow us to better serve all ability levels on a variety of terrain options, from wide cruisers to narrow steeps.
OldsnowboarderME: Have long term (5 year) business plans already been developed or are you still in the gathering of information phase? How does this govern your philosophy of ski area improvement and management, do budgets determine the extent of the improvements or are the budgets developed from what kind of immediate improvements are needed?
Tim Boyd: We are still in the long-term planning stage. I would suspect we will need to get at least one winter “under our belt” before we can accurately plan for the future. We have lots of ideas, but the plausibility of these need some realistic testing. We will also need feedback from our customers on our initial strategies so they can help us develop our future plans. Our improvements are determined by what kind of Return on Investment we can attain. I believe this should be a sound business practice that should lead to success for the resorts and a better experience for the customer.
thebigo: How is doing business in New England different from the Midwest? Has Peaks learned any lessons at Crotched that will be put to use at Attitash and Snow? The addition of Attitash and Snow represent a diversion from Peak’s historical operation of feeder areas. Both resorts have summertime operations and onsite hotels. How does the operation of destination resorts differ from smaller feeder areas?
Tim Boyd: Some regulations in Vermont and New Hampshire have challenged us, especially in regard to our plan at Mount Snow to withdraw water from Somerset Reservoir. When it is appropriate, we would appreciate the public support to help get these approvals in place.
As far as operational differences between our smaller areas and areas such as Attitash and Mount Snow, it is much easier to control your costs at the smaller areas, and your rental usage is dramatically higher. The regulatory processes are much less onerous at the smaller areas, and the availability of labor is better. All of these variables, along with other factors, result in higher profit margins at our smaller areas than those at Attitash and Mount Snow.
maplevalleymaster: Since Mount Snow and Attitash are your first major resorts, do you plan on doing anything differently in terms of management?
Tim Boyd: No, not really. We have always been big proponents of letting the local management team run the resort. From the corporate standpoint, we are there for support and guidance. They know their areas and markets better than we do. They wouldn’t be in their positions if we didn’t have confidence in them.
thebigo: One of the major frustrations with ASC was the use of eastern profits to improve their western resorts. Can we expect revenues to stay at the mountain where they are generated? In general does Peaks allow their resorts to operate independently?
Tim Boyd: I can probably best answer this question with some of my earlier statements. Improvements at any of our facilities are based on our expected ROI. We are spending about $8 million this year at Attitash and Mount Snow because we believe that will give us a good return on investment. I am not ashamed to tell people that Peak Resorts’ existence is based on making a profit. If we don’t, we will not survive.
In terms of improvements at our areas, this business strategy of investing has been successful for us, and given us the ability to offer better products to our customers. I do not anticipate any change in this philosophy. We already have committed $25 million for improvements at Attitash and Mount Snow over the next 3 years. I think that speaks volumes about what we think our ROI on Attitash and Mount Snow will be.
Thanks to everyone for submitting questions and to the AlpineZone admins for inviting me to take the challenge. We’ve enjoyed our previous forays into Northeastern skiing and riding at Crotched Mountain and Jack Frost/Big Boulder, and we’re very excited to have added Mount Snow and Attitash to the Peak Resorts family. I hope you’ll come visit us this season and see for yourself how good the product is with this fan gun technology.