Japanese Are Starting to Buy Ski Resorts in United States : Recreation: They plan to build golf courses on the trophy properties they are acquiring--so there will be year-round business. South Lake Tahoe’s Heavenly Valley is the latest purchase.
After picking up seaside golf courses, Hollywood studios and New York skyscrapers, the Japanese have added ski resorts to their shopping list of American investments.
Not long ago they arrived on the California slopes, agreeing to buy Heavenly Valley, one of the state’s choice ski areas. It is nestled amid the casinos and hotels of South Lake Tahoe. Sapporo-based Kamori Kanko Co. grabbed the 20-square-mile resort, which is valued between $80 million and $100 million.
Japanese investors already own such premier ski resorts as Breckenridge and Steamboat in the Colorado Rockies and Stratton in Vermont.
The Japanese love skiing almost as much as golf, and their investments come at a time when U.S. resorts are striving to attract skiers from overseas to make up for meager growth in the domestic market.
While the Japanese have purchased only about a half dozen winter resorts, “any time you own a Heavenly Valley, a Breckenridge or a Steamboat, you have made yourself a major player in the ski market,” said Charles R. Goeldner(, a marketing professor at the University of Colorado at Boulder.
Their deep pockets and strong yen have made them a formidable force in the industry, allowing them to outbid Americans for choice properties and to develop the winter resorts into year-round vacation spots.
“We can’t afford to compete with the prices they are paying at this point,” said Larry Jensen, director of business development at S-K-I Ltd., whose properties include Bear Mountain resort near Big Bear.
But investors from Tokyo are not expected to swamp the nation’s approximately 600 ski resorts with offers. Japanese acquisitions of ski resorts mirror their purchases of select, high-profile U.S. golf courses, such as Riviera in Los Angeles and Pebble Beach near Monterey, Calif.
“They are looking for big names,” said Walter Elander, vice president of Sno-engineering, a Littleton, N.H.-based resort planning firm. “It’s just like the guy who wants to own his own baseball team. If he wants recognition, he wants the best. These Japanese entities want to be associated with the name.”
The names represent a lot of potential value for the two Japanese companies that have spent the most on U.S. resorts. Both Victoria Inc., which owns Breckenridge and Stratton, and Kamori Kanko Co., which owns Steamboat and is acquiring Heavenly Valley, have substantial interests in the Japanese sporting goods and leisure industries.
“They could use the Breckenridge name for a line of consumer goods or ski apparel,” said Jack Barthell, managing partner of the Los Angeles office of Kenneth Leventhal & Co., which tracks Japanese investment in the United States.
Besides getting valuable names, the Japanese gain a finite resource. Soaring land and development costs and tighter environmental regulations are likely to severely limit the number of new ski resorts. “As with any scarce resource, they will only become more valuable with time,” Goeldner said.
But ski resorts will take more time and investment than golf courses to yield substantial rewards, investment experts say.
“The returns are thin, and the question is where are the future buyers for it,” said David A. Eisner, a managing partner in the real estate consulting group of Price Waterhouse. “We think this is going to be one of the few transactions like this.”
“It’s very seasonal,” Barthell said. “It goes great guns during the ski season--if there is good snow. A lot of the Japanese will look to put golf courses in these areas.”
Many Japanese ski resorts are as busy in summer as in winter. Kamori Kanko’s resort boasts a ski area, golf courses and an amusement park.
“One of the things that (Kamori Kanko) said that they wanted to improve is the summer product--that definitely includes building golf courses,” said Rod Hanna,
spokesman for the Steamboat Ski & Resort Corp.
So far, however, the Japanese owners seem more concerned with winning over longtime residents and resort workers than building golf courses. The Japanese have kept American managers and, in the case of Kamori Kanko, has helped build affordable housing for employees.
“There is some worrying because (Heavenly Valley) is now owned by someone who isn’t local,” said Duane Wallace, president of the South Lake Tahoe Chamber of Commerce. “We’d like to keep the local flavor. But I don’t think you will be able to tell that this is a business owned by the Japanese.”
Like other resort-area officials, Wallace looks forward to more visitors from Japan. But visions of jumbo jets arriving with loads of Japanese skiers have yet to become a reality.
At the Sports Stalker ski rental shop in Steamboat Springs, manager John Nicholson said only a handful of people have ever used the shop’s Japanese rental forms. T-shirts that say “Ski Town USA” and “Steamboat” in Japanese are more popular. “We sell them to the Americans,” Nicholson said.
“They are not trying to bring in busloads, carloads and planeloads of Japanese skiers,” said Bob Roberts, executive director of the California Ski Industry Assn. “They have gone out of the way to downplay the Japanese connection.”
“Japan is a market (for skiers visiting the United States) that presents a lot of promise and considerable obstacles in tapping,” said Jim Felton, spokesman for Breckenridge Ski Corp., which counts Britain, Australia and Mexico as its top three foreign markets.
Felton said it is difficult to persuade the Japanese to visit a new vacation spot. U.S. ski resorts are about 20 years behind their Canadian counterparts in wooing Asian skiers, he said.
But “skiing in this country is languishing,” he said. “It’s foolish for anybody to exclude” the international market.
