Cornerstone of a ski community
This is the first in a five-part series on how the presence of ski giant Vail Resorts affects life in Summit County.
SUMMIT COUNTY – To the East Coast elite it’s a status symbol. To millions of skiers, a Mecca. To locals it’s ball and chain or a lifeline. To Summit County, a fact of life.
From corporate monopoly to tourism godsend, the name “Vail” conjures a host of characterizations. Mention Vail Resorts in the Colorado hills, and it’s sure to elicit a heated response – from praise of its pristine terrain to damnation of its corporate domain. Virtually no one who lives in the shadow of VR remains unaffected or unopinionated.
“I think they’ve been a benefit to the community,” says Silverthorne resident and former VR employee John Carr. “Not just because of the money, but because of the professionalism they brought.”
“I don’t trust them as far as I could throw them, and that’s not very far,” says Summit Cove resident and self-described community watchdog Joel Bitler. “They’ve been a big pressure on the community. I have no love for them.”
Strong emotion stems from great influence, and in Summit County there are few, if any, institutions with as wide and deep a penetration as Vail Resorts.
As a corporation, VR is one of three industry titans, rivaled only by Intrawest and American Skiing Co. Intrawest controls 12 resorts across the U.S. and Canada, including Summit County’s Copper Mountain and Whistler Blackcomb in British Columbia. American Ski Co. owns seven resorts in five states, including Steamboat in Routt County and Killington in Vermont.
Together, the “Big Three,” as they are sometimes labeled, typically sell nearly a quarter of all U.S. lift tickets.
For its part, VR owns and operates five major ski resorts, including Breckenridge, Keystone, the newly acquired Heavenly in Lake Tahoe, Beaver Creek, and its flagship, Vail. With the recent purchase of RockResorts, the company has expanded its lodging segment to encompass 21 owned or managed hotels in seven states. It operates six resort golf courses, while its real estate segment controls and develops properties in the Jackson Hole Valley in Wyoming, as well as substantial parcels in Summit and Eagle counties. Additionally, its retail interests are run by Specialty Sports Ventures (SSV), a joint holding in which VR has a majority interest.
Founded in the 1960s by local legends Pete Seibert and Earl Eaton, Vail has risen to epic status in the world of skiing. Famed for its Back Bowls, expansive terrain and affluent ambiance, the resort married glitz to champagne powder in the creation of an upper-crust brand name that powers its reputation and business to this day.
Vail was sold after a deadly gondola crash in 1976 and renamed Vail Associates. It changed hands again in 1985, when it was purchased by one-time billionaire businessman George Gillett. Gillett subsequently lost control of the company in bankruptcy proceedings, and Apollo Partners bought Vail Associates in 1992. Apollo Partners, a capital investment group headed by Leon Black, led the company to an initial public offering in 1997. The stock opened on the New York Stock Exchange with a price of $22 a share.
Before going public, however, the business underwent a major change. In 1997, Vail Associates merged with Ralston Resorts, then the owner of Keystone, Breckenridge and Arapahoe Basin, and began operating under the new name of Vail Resorts. Ralston still retains 21 percent ownership of VR stock. Arapahoe Basin was eventually sold as a requirement for U.S. Department of Justice approval of the merger, but the deal finally made Vail Resorts a corporate powerhouse that complemented the reputation of its premier ski area.
Since that time, VR has significantly expanded its interests through acquisitions such as Heavenly in California and Nevada and lodging company RockResorts. Its 2002 stock price fluctuated from a high of $21.80 in April to a then-historic low of $12.23 in October and opened the new year around $15. Despite the wild ride on the market, the company continued to evolve into a more comprehensive resort corporation. Now responsible to shareholders who are often unable or unwilling to tolerate the turbulence of the traditional ski industry, whose revenues often reflect the fickle weather patterns on which it relies, VR has diversified its interests to gain a more stable financial foothold.
“Any company is looking for a more flat line in terms of revenue stream,” Breckenridge and Keystone Chief Operating Officer Roger McCarthy said in an interview during the 2002-03 season. “Diversification brings more stability.”
Rick Smith, the company’s vice president of human resources, pointed to VR’s lodging segment as one area in particular where the company has sought to even out its revenue stream.
“We’ve been trying to drive it over the past couple of years so we’re not so dependent on the winter business,” he said.
Still, often contrary to appearances, the core of Vail Resorts remains the mountains and skiing. Two-thirds of the company’s revenue during the 2002 fiscal year came from its mountain segment, which “derives revenue primarily through the sale of lift tickets and passes,” according to financial documents.
“There’s no doubt we still are mainly a mountain resort and ski business,” Smith said.
This means that as the company expands, it continues to rely primarily on its core skiing operations. As such, it continues to focus on Summit County as one of its key spheres of influence, using it as a base for growth in other areas of focus such as real estate management.
“It’s a pretty good basis to be building on,” McCarthy said.
That may be an understatement.
Vail Resorts’ impact in Summit County is huge. During the 2001-02 season, Breckenridge and Keystone, the company’s two Summit resorts, combined to host more than 2.5 million skier visits. That’s only 500,000 less than the entire state of Utah for the same year. Two out of every three skiers to visit the county went to a VR resort.
But that’s hardly the extent of the company’s Summit operations. In addition to its mountain interests, VR owns six major hotels in the county with a total of 604 rooms, including The Keystone Lodge and the Great Divide Lodge in Breckenridge.
Vail Resorts Development Co. (VRDC), a wholly owned subsidiary, owns 94 existing townhouses and home sites at its two Summit resorts, with an additional 300-400 zoned in Keystone, where it is engaged in a partnership with Intrawest, the owner of Copper Mountain. This does not include the 80 condominiums at the Mountain Thunder Lodge in Breckenridge, another VRDC property, or the 431 units planned for future developments on Peaks 7 and 8 of the same mountain.
As for retail outlets, 21 stores spread among Breckenridge, Keystone, Silverthorne and Copper Mountain fall under the ownership of SSV, a business established in cooperation with Specialty Sports, owned by the Gart family of Denver.
This means that in a region that fundamentally subsists on tourism, it is hard to throw a stone without hitting a property geared toward visitors that’s either owned or managed by Vail Resorts. If somehow you miss, whatever you do hit will almost certainly be in direct competition with it. And even these stores or developments will exist in large part because of the visitors the resorts draw.
VR has become more deeply entwined in this mountain community than any of its predecessors purely by virtue of scope. Yet the depth to which it is embedded is often hard to pin down as the impacts range far beyond solely its revenue and direct economic contribution.
“The spin-off effect is phenomenal,” McCarthy said.
There are residual effects on local businesses that rely on visitors to Vail’s mountains. There is the impact of second homeowners and seasonal employees on the local housing market. These same factors significantly affect nearly all county services – from schools to snowplowing.
Quantifying all the direct and indirect effects of the industry is a nearly impossible task. Nevertheless, a November 2001 report issued by Colorado State University researchers using 1997 data estimated that roughly 37.4 percent of the total Summit County economy is based directly or indirectly on ski tourism. If taken in direct proportion to its share of skier visits, this signifies that more than 25 percent of the Summit County economy revolves around VR. Simply put, $1 of every $4 spent goes directly to or is precipitated by the company’s presence.
By nearly all accounts, including that of McCarthy, that estimate is low.
At the very least, Breckenridge and Keystone employ 4,994 people locally during peak season, comprising more than 21.6 percent of total number jobs in the county. This does not include the 656 “corporate” employees, who support all Vail Resorts operations, or the 62 VRDC employees. As for SSV employees, who are counted as a separate entity, they stand at 226. In all, nearly one in four Summit County jobs is related to VR operations.
No other single company holds this kind of sway locally. And for better or worse, VR’s presence will inherently affect the nature of the county as it continues to evolve. Preparation for and reaction to the benefits and costs of the company’s presence will factor into most levels of Summit life – from political considerations to local business plans. County population will continue to fluctuate, land prices will continue to rise and employment will continue to reflect the corporate health of Vail Resorts.
To a certain extent, as goes Vail, so goes Summit County. And for the present, at least, the two will continue to be deeply intertwined.
Aidan Leonard is a freelancer for the Summit Daily News. He can be reached at email@example.com, subject: Aidan Leonard.
Support Local Journalism
Support Local Journalism
As a Summit Daily News reader, you make our work possible.
Now more than ever, your financial support is critical to help us keep our communities informed about the evolving coronavirus pandemic and the impact it is having on our residents and businesses. Every contribution, no matter the size, will make a difference.
Your donation will be used exclusively to support quality, local journalism.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User