Mountain Resorts Look Beyond the Ski Runs

A covered wooden bridge spans a sparkling creek spilling past the condominiums, T-shirt shops and restaurants that form the nucleus of this small community at the base of towering ski slopes.

Bill and Nellie Dry of Oklahoma City sat in the shade of an umbrella on a lazy summer day, watching visitors wander from shop to shop as rock music blared from a huge tented stage at the center of the pedestrian village.

“When we first started coming, we hiked a lot,” said Nellie Dry, who has visited this mountain resort with her husband for 17 years. “Lately, we’ve been laying back and enjoying the peace and quiet.”

With its ski runs blanketed in grass and wildflowers, Copper Mountain has built a blossoming summer business, a strategy mirrored from California to Vermont as resort owners expand their livelihoods beyond the snow by investing in condos, entertainment and, in at least one case, an adventure travel company.

“If you look at the larger companies in the industry, it’s a year-round business,” said Michael Berry, president of the National Ski Areas Assn. “It’s really a hospitality industry on a year-round basis and we’re in the ski business from December to March.”

A half-century ago, it was fairly simple to get into the ski business: Put up a rope tow and wait for the snow to fall. With the arrival of snow-making machines and high-speed lifts came the need for capital that was often more than lift ticket sales could generate.

In addition, the pool of skiers and snowboarders has climbed just slightly in the last decade and largely consists of baby boomers who typically want more off-mountain entertainment.

Resort owners took over the ski schools, rental shops and on-mountain restaurants. They began investing in real estate development around the mountain base for lodging, restaurants, shops, grocery stores, gas stations and entertainment such as music festivals to keep visitors for longer periods of time.

Although ski areas can survive without ancillary development, the business model today is to be a “comprehensive provider of everything,” Berry said. “The base village concept promotes the idea of warm pillows and the greater the number of warm pillows, the greater number of lift tickets sold,” Berry said.

Berry pointed to Jiminy Peak in Hancock, Mass., a ski area that increased its number of guest beds significantly over the last 10 years and saw a corresponding increase in lift ticket sales.

In some resort areas, some residents and community leaders express concern that the developments might endanger the areas’ small-town atmosphere.

Summit County commissioners this year rejected Intrawest Corp.’s planned development for Copper Mountain, concerned about adequate parking and the density of the condominium units. Intrawest is reshaping the plan to resubmit later this year.

“I don’t know if that would be good or not,” Jacinda Emmett of Greeley, Colo., said of the Intrawest project as she walked through Copper Mountain. “It’s quiet.”

Intrawest, based in Vancouver, Canada, has developed an expertise in “building villages out of nothing,” said industry analyst Dennis McAlpine of McAlpine Associates.

“The villages act as a magnet to get people there for vacations, for skiing, whatever,” he said. “And I think that’s obviously been the case at Vail and to lesser degrees at Keystone and Beaver Creek. Sure there’s risk with it, but that’s how they get the leverage on what they’re doing.”

Intrawest, founded in 1976 as a real estate company, typically takes five to 10 years to complete a development. Most if not all the lodging units typically are presold, company spokesman Tim McNulty said.

“People tend to stay longer when there are more things to do and tend to spend more money,” he said.

In addition to Copper Mountain, about 70 miles west of Denver, Intrawest’s projects in the works include multimillion-dollar developments at Mammoth Mountain in California, Tremblant north of Montreal and Stratton Mountain in Vermont. It also has joined with Aspen Skiing Co. to build a $400-million base village in Snowmass Village, Colo.

Off the mountains, Intrawest has golf courses, warm-weather resorts, a company offering helicopter-assisted skiing and a majority interest in adventure tour operator Ambercrombie & Kent, which offers trips ranging from an African safari to a 20-day tour of Europe and the Mediterranean by private jet for $39,985.

For its fiscal year ended June 30, 2005, Intrawest had $1.7 billion in revenue, including $545.4 million in mountain operations and $317.1 million from non-mountain operations.

Vail Resorts has become a major investor in real estate operations. For example, it has in the works a $250-million project to renovate a portion of Vail called Lionshead Village that would include an upscale hotel and spa, townhomes, shopping and entertainment venues.

At Heavenly ski resort, which straddles the California-Nevada border, Vail Resorts has teamed with Marriott International Inc. on a multiyear project to build time-share units and retail space along the south shore of Lake Tahoe.

Vail Chief Executive Adam Aron has said the developments target the baby boomer demographic, people between 50 years and 64 years old who are most likely to buy vacation real estate.

In the first nine months of its fiscal year, Vail Resorts reported $690 million in revenue, with $505.5 million generated in on-mountain activities, $145.1 million in lodging and $39.3 million in real estate.

Elsewhere, Summit Ventures Era is constructing a hotel, community building and condominium development at its Sugarbush Ski Resort near Warren, Vt., the first project to be built at the area in 20 years.

It comes as the number of available beds has declined in the last 15 years, contributing to a drop in skier visits, Sugarbush spokesman JJ Toland said.

“We get over 300,000 skier visits but the base facilities as they exist now don’t reflect what people expect to see,” Toland said.