Vail Resorts sets its president loose
Daly’s sudden departure is the first of what has been rumored to be a significant companywide downsizing, forced by a stingy destination travel market and a lingering national recession.
Daly has been president of Vail Resorts since 1992.
Daly, 56, was inducted into the Colorado Ski Hall of Fame in 2000 after beginning his ski career in 1970 on the trail crew at Aspen Highlands, where he planned to spend just one season.
By 1982, he was named president of Copper Mountain, joining Vail Resorts in 1989 when the company, then known as Vail Associates and owned by George Gillett, acquired Lake Eldora Ski Corporation, which Daly had resurrected two years earlier.
A change in corporate culture
The downsizing begins as Vail Resorts’ stock slowly rebounds from an historic low price of $12.23 two weeks ago. The results of the company’s year-end quarterly reports – which CEO Adam Aron hinted would not be rosy – will be released next Tuesday. The stock has traded as high as $32 a share. At Tuesday’s market close, the stock was trading at $13.75.
In announcing Daly’s departure, Vail Resorts’ CEO Adam Aron said there will be more reorganization of the company.
“Naturally, Andy’s departure will trigger some shifting and reorganization of duties and reporting relationships. These changes will all be fully announced no later than Friday, Nov. 1,” Aron wrote.
Vail Resorts, and for that matter the rest of the travel and hospitality industry in the country, have been heavily impacted by the 18-month recession and the terrorist attacks of Sept. 11, 2001. Those twin blows have slowed destination travel for business and pleasure. Skier numbers at Vail, for example, declined to 1.536 million, or 7 percent, last year, while Beaver Creek declined to 657,956, 3 percent drop. Breckenridge, meanwhile, tallied 1.468 million, up 3 percent, but Keystone saw 1.069 million, a 13.1 percent decrease.
Nationally, skier numbers last season were down 5.5 percent.
Tuesday’s move is not the first time layoffs have been announced. In May 2000, Vail Resorts laid off 37 mid-level managers in an effort to restructure the resort to better match its new focus on the hospitality industry, Aron said.
In responding to that new market dynamic, one that kept destination skiers from boarding airplanes because of terrorism jitters, Vail Resorts worked hard last year to tempt the 500,000-strong Front Range skier market with heavily discounted ski passes. The company’s discount ski passes sell for as little as $269, while single-day lift tickets may sell for $70 or more this year.
Daly did not discuss the details of his departure from the company Tuesday. He did way, however, that he felt it was a personal opportunity to explore other ventures. In a companywide e-mail, he noted the pressure being brought on the industry to perform in tough times.
“So, given this trend of declining destination skiers, saturation of the Front Range with inexpensive passes and discouraging travel industry forecasts, our chairman and Vail Resorts Board are now responding appropriately by taking steps to substantially reduce our overall operating costs, including the elimination of the position of president,” he said. “We’re still seeing the toll of Sept. 11, together with the recession that has resulted in the pull-back of corporate and personal leisure travel. Even with that double impact, we did surprisingly well last year.”
In February, a companywide 3 percent raise frozen by the uncertainties in post Sept. 11, was reinstated. And this fall, Vail Resorts announced a hiring freeze and withheld management bonuses.
Daly acknowledged the pressure on the ski company.
“Our responsibility is to the shareholders” he said. “For some, the idea of a teacher in Pasadena or a retiree in Florida owning Vail Resorts is something that will take some getting used to. The ski industry now needs to provide consistency in earnings.”
Aron, too, noted that pressure in his company-wide announcement of Daly’s departure:
“These painful times require that we streamline wherever we logically can, and operate as leanly and with as little expense as possible – of course, still continuing to take great care of our guests and living up to the world-class reputations of our resorts.”
Vail Resorts has also diversified its Colorado ski resort holdings – Vail, Beaver Creek, Breckenridge and Keystone – by acquiring the Rock Resorts luxury hotel chain, as well as the Grand Teton Lodge in Jackson, Wyo. Earlier this year, Vail Resorts acquired the struggling Heavenly Ski Resort at Lake Tahoe for $102 million.
Daly said the greatest change in the ski industry he’s noticed is the
change from a growth industry to one where rivals slug it out for market share.
“We grow by stealing skiers at the expense of small areas,” he said.
That growth requires capital to fund the new technology of high-speed lifts, grooming innovations and snowmaking.
“That capital intensity has reshaped the industry,” he said, causing consolidation of ski areas and bringing with it public ownership.
The lifeblood of skiing are the life-long skiers who come for the sheer enjoyment of the sport and its setting, he added, cautioning that moving too far afield from the core customer might be a mistake.
“In some cases this is a bit like adventure travel, where you go to a place once,” he said. “We have to be careful not to outgrow the aficionados of skiing who sustain our sport and change our program so they no longer have what makes the twinkle in their eyes.”
Daly’s defining moment, at least in the eyes of former Vail Associates president and now the managing partner of East West Partners, Harry Frampton, came during four years ago this month, during the $12 million eco-sabatoge arson at of the Two Elk Restaurant.
“Andy did a lot of great things,” Frampton said. “Number one was his love for the sport of skiing. The second was he understood the importance of community. But his defining moment was when he stood tall after the Two Elk arson. He provided a terrific voice for VA, the media and employees. He provided a rallying point and set the tone and he needs to get credit for that. You really find out about people when things are tough. Andy was there.”
Among his peers, Daly is ‘unique’
As news of Andy Daly’s departure from Vail Resorts was made public Tuesday, ski industry leaders and others offered these comments about Daly:
Johnnie Stevens, chief operating officer, Telluride Ski and Golf:
“I met Andy at an avalanche seminar in Jackson in 1971. He’s a ski guy. That’s what I love about him. He built his whole life around skiing. He’s one of a kind. He’s a great skier passionate about the sport. People with passion are unique. People with passion are a valuable resource, and I hate to seem them go.”
Rob Perlman, president and CEO, Colorado Ski Country USA:
Andy is a fantastic guy. One word comes to mind: integrity. He’s a classic ski operations guy who gave so much to the industry as a whole. At same time, it’s a great opportunity for Andy to seek new challenges and to start a new chapter in his life.”
Bob McLaurin, Vail town manager:
“I think Andy Daly will be sorely missed, not only in Vail but throughout the ski industry. He is a guy that was very passionate and committed to skiing. He was a very good partner working with communities located at the bottom of the lifts. In particular, his work around the managed growth agreement with the town of Vail in 1996 was outstanding and set the tone of how resorts and communities have to work together. I personally will miss him a lot.”
Bill Marolt, president and CEO of U.S. Ski and Snowboard Association:
“I’m disappointed he will be moving on. He has been a terrific leader in this industry for a long time. I’ve always found working with him to be positive. He has been an advocate for ski racing at every level. I’ve worked with him from grassroots to the U.S. Ski Team. We will miss his direct involvement, although I expect he will be involved down the road. He understands what we need to do as an industry and as a business to relate to the public.”
John Norton, president and CEO of Crested Butte and a long-time competitor:
“He is a guy everybody trusted, which is saying a lot. His leadership within the industry will be terribly missed.
I respected him in every way – as a businessman and an ethical and committed sportsman whose passion for the sport remains.
There are some people in the industry that don’t share that passion.”
Chris Ryman, president and CEO of Booth Creek Ski Holdings and former chief operating officer of Vail Resorts:
“All of us at Booth Creek Ski Holdings wish Andy the very best. He’s been a tremendous leader in this industry for decades and led Vail Resorts through both prosperous and exciting times and turbulent and volatile times. His involvement in the industry nationally and in Colorado is unparalleled. It’s difficult and sad to see someone with so many years of commitment to the company and community, leave. He will be missed.”
Jerry Jones, developer, former president of Beaver Creek and oft-times critic of Vail Resorts:
“He is a good guy. That is the end of the capable, quality, trustworthy management at Vail Resorts. Andy was at least ethical and moral and did his best. I think it was very difficult for him to work in that environment then the company doesn’t always do the right thing for the employees or the consumer. I’m surprised he stuck in there this long. The way to survive in this comp[any is to keep your head down and nod “yes.’ I’m sure he disagreed with a lot of things.”
Andy Daly’s ski industry tenure:
– Nov. 1970 – Hired as trail crew worker at Aspen Highlands.
– Nov. 1972 – Daly and friend Kevin Williams move to Copper Mountain for its inaugural season. Daly worked on the ski patrol.
– 1975 – Daly is named mountain manager.
– 1980 – Daly is promoted to vice-president of operations.
– 1982-87 – Daly is named chief executive officer of Copper Mountain.
– 1987 – Daly becomes owner and president of the Lake Eldora Ski Corporation and begins resurrecting the defunct ski area.
– 1989 – Lake Eldora is acquired by Vail Resorts, which names Daly president of Beaver Creek Resort.
– 1992 – Daly is named president of Vail Resorts.
Major events under Daly’s tenure:
– Vail Resorts merges with RalCorp Holdings, which operated Breckenridge and Keystone Resorts.
– The 1999 World Alpine Skiing Championships are held at Vail and Beaver Creek.
– Adventure Ridge Activity Center at Eagle’s Nest atop Vail Mountain opens, offering laser tag, bobsledding and other non-skiing activities.
– Eco-saboteurs torch Two Elk Restaurant and lift structures in 1998, causing $12 million. It since has been rebuilt.
– The 815 acre-Category III terrain south of Vail’s Back Bowls opens after heated public and environmental debate. It is later renamed Blue Sky Basin.
– Arrowhead, Bachelor Gulch and Beaver Creek are linked via chairlifts.