Why does it make sense for one company to own all of the ski resorts?

Vail Resorts bought Whistler last year for about $ 1 billion. This year they bought Stowe (Denver Post) for $ 50 million. Why does this make economic sense? Where is the economy of scale in running a ski resort? Especially when they are not geographically proximate. Vail doesn’t manufacture lifts, skis, or boots. They have a pass program that is good for multiple mountains across North America, but that could be arranged by agreement among resorts owned by separate companies.

I don’t think this is how it works in other parts of the hospitality industry. There is an economy of scale in establishing a hotel brand, but individual hotels are usually owned by separate groups of investors (i.e., two “Four Seasons” or “Marriott” hotels are unlikely to share ownership).

What’s different about skiing? Could it be that it is actually not that different? One reason why hotel owners contract ot Marriott or Four Seasons is that those companies are good at training people. So maybe it is the same for ski resorts? The big operator can send people from an already-efficient mountain like Vail or Beaver Creek to Stowe and achieve operating efficiencies via better-trained employees? But if so, why does the company that trains and markets also have to physically own the mountain, the lifts, etc.?

Philip Greenspun’s Weblog

Ski resorts are fat targets for employment litigation?

One thing that I noticed during my sojourn in Vail Valley was that the ski resorts seem to have a lot of volunteer labor. Beaver Creek has greeters everywhere to answer questions, hand out tissues, hand out postcards, etc. One volunteer said that she does it for the annual pass. I asked “How often do you ski?” and she replied that she doesn’t ski at all, but likes the ride the lifts in the summer for hiking. Presumably this relationship is mutually satisfactory but a mutually satisfactory employment relationship can give rise to a profitable lawsuit.

I found Winter Park’s ad for ski patrol volunteers, for example. The volunteer must work for 17 days and pay $ 90. In exchange he or she receives an annual ski pass that retails for $ 400-600. If a “day” is 8 hours, that’s as little as $ 2.25 per hour in net compensation and the government did not receive Social Security or Medicare payroll taxes on this wage.

Why isn’t ski country also an employment litigator’s paradise?

[Despite state laws that absolve ski resort operators from most liability on the “you were falling down a goddamn mountain” theory, a prominent skilaw.com billboard on I-70 shows that litigation and skiing can be mixed.]

Philip Greenspun’s Weblog