Katz leads Vail into the future
VAIL – Nearly 30 years after the Vail ski resort opened, Rob Katz took his first runs on Vail Mountain during the winter of 1990.
Katz, who has served as Vail Resorts chief executive officer since 2006, graduated from college on the East Coast and that ski trip to Vail was his first trip out west. He stayed with the family of a colleague, Mitch Whiteford, including Mitch’s father Bill Whiteford, one of Vail Mountain’s early investors.
Katz started skiing when he was about 10 years old at eastern resorts including Hunter Mountain in N.Y., and the Vermont resorts of Stratton Mountain, Stowe, Sugarbush and Mount Snow. He jokes that he is a “very good ice skier.”
It’s impossible to talk about Vail’s success without talking about Katz. Since he took over as CEO, the company has grown into an indisputable leader in the ski resort industry and remains in strong financial shape, even after the worst recession in the United States since the Great Depression.
Katz’s professional relationship with Vail began shortly after his first ski trip here. Katz started working for an investment firm called Apollo in August of 1990. In early 1991, Katz began looking at a company called Gillett Holdings, Inc., George Gillett’s company.
“At the time the economy was tough. There were a lot of companies struggling that had taken on too much debt and so (Apollo was) looking at different companies to see if they were good companies that were strong, but might have had too much debt,” Katz said.
Gillett Holdings had three different assets at the time: Three TV stations – one in Tampa and two in California, a meat-packing plant and Vail Associates, which owned Vail and Beaver Creek.
“We decided that we, as a firm, really liked Vail,” Katz recalls. “We thought it was a terrific company and asset, and so we decided to buy some of the outstanding loans they had. We started buying those loans in 1991 and then started working over the next year, year and a half, to come up with a plan to reduce the company’s debt and allow it to become better poised for the future. In October of 1992, the company actually came out of bankruptcy and I was the point person for Apollo in overseeing Vail.”
From that time through around 1995, Katz traveled to Vail often to meet with management and provide oversight and guidance. When the company went public in 1996, Katz played a major role. That’s also the time the company, which was now Vail Resorts, set up its first formal board of directors. Katz has been on that board ever since.
He became director of the board in 2002. The director position was a new concept at the time in which the board wanted a member other than the chairman – which at the time was then-CEO Adam Aron – to take a more active role in oversight. Also that year, completely unrelated to Katz’s role on the Vail Resorts board, he and his wife decided they wanted to leave New York City and move to Colorado.
Part of the decision was related to the Sept. 11 terrorist attacks on the city, but Katz said they had talked about moving west for a while. Their children were young and they wanted to raise them in a different environment, Katz said.
The family moved to Boulder in the summer of 2002 and Katz continued to work part-time for Apollo and remained on the Vail Resorts board. In 2006, when Aron decided he was leaving, Katz was charged with finding his replacement.
That’s when other board members asked Katz is he might be interested in the job.
“So that started a real conversation with some of the other directors, culminating in me agreeing to be CEO in March 2006,” he said.
One of Katz’s favorite memories of his early involvement with Vail was a day in 1992 when he skied with Gillett. They were in the Back Bowls and it was a powder day, Katz remembers, and Gillett was showing Katz around.
Katz was impressed with Gillett’s skiing ability and aggressive style, and next thing he knew Gillett did a full-on face plant right in front of him.
“Here I am with the CEO at the time, and I was like, ‘Wow, do I help him? What do I do now,?” Katz said. “Meanwhile, George popped right up, smile on his face, grabbed his skis, put everything back on and went right back down.”
That memory has stayed with Katz because it reminds him that the leadership of the company has to have a real passion for the business, he said.
“It doesn’t mean that everybody has to be a great skier, I wouldn’t say that … but boy it helps when you can really get out there and experience kind of that thrill and excitement and joy that everybody has, and do it at all levels,” Katz said. “It was a great lesson to me, watching George, in terms of the enthusiasm he brought to the business. You can be official in your title and your role and you’ve got a lot of responsibility, but don’t forget to have fun.”
Katz has made some big decisions during his tenure as CEO, including his very first decision to move corporate headquarters from Vail to Broomfield. It was an unpopular decision within the Vail community, but Katz meant business and his reasoning for doing it was purely to accomplish the greater good for the company, he said.
The company had recently been through a Securities and Exchange Commission investigation, and while it ended without issue, Katz said it was clear to him that it’s difficult to run a public company from the base of a ski resort.
“The rest of the company basically is throwing a big party, and the corporate office can’t really be in the middle of that party,” Katz said. “As a public company, it’s just tough. … So to me, I felt like I wanted to have every single part of the company live up to the same excellence that our guest service and our mountain folks delivered.”
The decision wasn’t easy. Katz said people were crying because they had to relocate. The backlash from the community was strong, too, but Katz said many people in the community didn’t like it when the corporate office was in the Seasons building, and that was just down the road in Avon.
The decision to move was announced at the same time Katz was announced as the new CEO. He never had a honeymoon period as CEO, he recalls.
“I think that’s an important piece of leadership – don’t shy away or hide from a bad message,” Katz said.
It wasn’t long before Katz was facing the Great Recession and had to make more unpopular decisions, which included a collective wage reduction for all employees. Katz is proud of that decision today – he defends it by pointing out that the company had few layoffs at a time when American companies were drastically reducing their workforce.
Throughout the recession and its aftermath, however, Vail Resorts has grown. It has added the Lake Tahoe-region resorts of Heavenly, Northstar and Kirkwood to its portfolio, as well as two Midwestern ski resorts this past December. Katz points out the company has never sold a ski resort – that all acquisitions have been methodical – a point he is proud of.
The company announced last summer a plan to develop many of its resorts for summer recreation thanks to new legislation paving the way for such development. Vail Resorts plans to start with Vail Mountain, adding things like ziplines, more trails, alpine coasters and more.
Vail Mountain itself has also changed under Katz’s leadership. New high-speed chairlifts like Chair 5 and the replacement of the Vista Bahn lift in 2012 with a new, high-speed gondola, and a new Mid-Vail restaurant called The 10th, are setting Vail up for the future. Those upgrades are complementing the town of Vail’s renaissance – a period of redevelopment and upgrades that culminated with the opening of Solaris, the Ritz-Carlton Residences (a Vail Resorts development) and the Four Seasons.
And you can’t talk about Katz without talking about the Epic Pass, which was introduced for the 2008-09 ski season at an introductory price of $579. Before that, an unlimited season pass that included Vail and Beaver Creek was in the neighborhood of $1,800. The Epic Pass was revolutionary in the ski industry, and looking back, it was one of the best decisions Katz ever made. He said it has provided tremendous stability to the company.
“You’re always going to have that moment where people are wondering about the weather,” Katz said, pointing out that the 2011-12 winter was one of the worst ever in terms of snowfall. “I think there was a trade to be made with our guests that said, ‘Guess what, we’ll give you an amazing deal on this pass, but there’s an important catch – the catch its you have to buy the pass before the season.’ … We now sell 40 percent of our lift tickets before the season begins.”
When the whole world was going crazy for Facebook and Twitter, Vail Resorts figured out a way to tailor social media to the mountain experience.
Vail Resorts’ move to include radio frequency identification technology in its passes set the company on the path toward its wildly popular Epic Mix program. The company realized that technology could open doors into information sharing like never seen before at a ski resort – a realization that came mostly after company executives, including Katz, began using Twitter and Facebook. That’s what spawned the idea to merge social media and RF technology together, Katz said.
“We want to be No. 1. Well, to be No. 1, you’ve got to be out front and you have to do things other people aren’t doing,” Katz said. “But that means, that comes along with change and I think what I have felt certainly in my tenure, is a willingness to push. Push for new things, push in new directions. And, you know, everyone doesn’t always agree with them when I first talk about them, when the company first talks about them, and not everything we do will always work, but if you’re not trying anything, you’re not going to lead.”
Katz has no plans to stop leading Vail Resorts into the future. He said he’d like to see the company double in size in the next 10 years. He wants the pass program to also grow, as well as add more technology upgrades such as energy efficiency in snowmaking.
“We’re not that far away from some technological improvements where it’ll cost a fraction of the energy – cost both in terms of using the resource and also in terms of the dollars – where snowmaking can actually be a much more constant benefit,” he said.
And while growth is on his mind, Katz reiterates that it will always be logical and deliberate.
“We want to grow into things where we feel we can add value, not just monetary value, but guest value – and I think, so far, I think we’re doing that,” Katz said. “And the areas where we don’t (add value), I think you’ll see us back off. If we don’t think we can create a new paradigm of some sort, then we won’t do it.”
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