A Ofabulous resort at an attractive price1
LAKE TAHOE<Heavenly’s skier visits amounted to 846,000 last year. At its peak, Heavenly employees number 1,600 people.In announcing the acquisition of the Heavenly ski resort, Vail Resorts1 chairman and CEO, Adam Aron, said the company looks for underpriced blue chip resorts3Heavenly certainly fits that bill. We think we got a fabulous resort at an attractive price, Aron said, characterizing the resort as 3undermanaged, undermarketed and undercapitalized.The Vail transition management, scheduled to visit Heavenly today, apparently focused on what Heavenly has to offer.3In adding Heavenly, we1re adding a ski resort in a different weather pattern, Aron said. 3Since snow varies in different regions of the country, buying properties across the United States helps 3double up the bet.Aron said Vail Resorts is also looking forward to taking over the $25 million Heavenly Gondola, a key component to South Lake Tahoe redevelopment. Vail expects to add another 75,000 passengers in the upcoming years to the 100,000 riders the gondola already accommodates during the summer months. And the prospects of both skier visits and sightseeing tickets are expected to grow when a Marriott hotel projects open in November, Aron added. The contract calls for a complete turnover of the gondola, which was refinanced with another party when the American Skiing Company restructured its finances 10 months ago.Vail Resorts doesn1t anticipate establishing part of the ski area as a commercial lodging alternative, however, choosing to piggyback off the 20,000 bed-base in South Lake Tahoe, instead.Tahoe locals, meanwhile, may benefit from Vail Resorts1 two-tiered ski-pass pricing structure. Aron said in-state visitors pay about half of what the out-of-state guests pay, adding Vail intends 3to be competitive in the Lake Tahoe market.Heavenly President Dennis Harmon, who lived and worked in Colorado for 14 years, said he likes the idea that Vail comes to his resort with a good track record and a well-financed operation.3Our preliminary indications are we1re going to have a two-way conversation, Harmon said. 3I think it’s going to be very positive for us. We1re looking forward to it.American Skiing lost $223 million in the last three quarters. In the last year, the company has tried to unload ski resorts<including Steamboat and Sugarbush<to improve its cash-flow standings.Aron said Vail Resorts has been eyeing Heavenly for about five years, with the buzz of a possible transaction emerging in recent weeks.Susan Wood is a reporter at the Tahoe Daily Tribune.