Lake Tahoe resorts transformed

4th March 2012

Last modified on September 2nd, 2021

Last month in an announcement that caught many by surprise the mighty Vail Resorts revealed it was purchasing the Kirkwood ski area for $18m.

Vail Resorts already own Heavenly and Northstar around Lake Tahoe.

It bought Northstar in 2010 for $80m and a new gondola lift costs around $20m, so the purchase of Kirkwood is seen by many as a bargain.

Vail Resorts runs Vail, Beaver Creek, Breckenridge and Keystone in Colorado.

We reported on the deal at the time.

“Kirkwood offers some of the most extraordinary ski terrain found anywhere in North America with high alpine trails and the most annual average snowfall in Lake Tahoe. Kirkwood represents skiing and riding at its purest, something we intend to retain and protect long into the future,” said Rob Katz, chairman and chief executive officer of Vail Resorts.

There had been rumours of a sale for a while and the speculation intensified after Christmas, but few people knew who was interested or why.

Kirkwood. Image © PlanetSKI

The negotiations remained a closely-guarded secret and it did not leak.

“There had been something  in the works for the last few months but in terms of the date announced it was a complete surprise,” said the Vice-President of Sales and Marketing at Kirkwood, Michael Dalzell, to PlanetSKI. ” “Everyone in the resort was taken aback and no-one knew at all.”

Not everyone is pleased though.

“It’s a weird one and I just hope they don’t try to change it too much here as we like it just how it is,” was how one local snowboarder put it as we chatted on a chairlift.

The resort has a reputation for steep runs, advanced terrain and is a popular haunt for seasonal workers and ski bums.

Industry watchers are surprised by the move as Vail Resorts tends to go for a more affluent and well-heeled client.

Some argue the resorts complement each other, while others believe they make uneasy bedfellows.

Time will tell.

In part it shows the ambitious plans of Vail Resorts. The company is in a strong financial position at present and it has even expressed interest in expanding into Europe.

It has appointed a senior figure to look at the possibilities and at the end of last month Rob Katz was spotted in Verbier, Switzerland.

But the purchase of Kirkwood by Vail Resorts also shows the attraction of the ski areas around Lake Tahoe that have been somewhat overlooked in recent years.

That is about to change.

Ritz-Carlton, Northstar. Image © PlanetSKI

“The area has many attractions and we believe it has a very healthy future” said Steven Holt, the marketing director of  Ritz-Carlton, to PlanetSKI. The company has just opened a property in Northstar.

“I myself live in San Francisco and it is easy to get to Lake Tahoe and there is a vast population base just waiting to be able to come skiing and snowboarding as the facilities are improved.”

As well as Vail Resorts the private equity firm KSL Capital Partners and East West Partners are also involved in the region.

$1b of investment is reported to be earmarked for the ski areas.

There are 14 resorts around Lake Tahoe with a total of 4.1m skier visits a year.

Colorado has 26 ski resorts that attract 12m skier visits.

In 2010 KSL bought Squaw Valley and recently the company added Alpine Meadows as we reported at the time on PlanetSKI.

“It’s really the last bastion of under-capitalised, under-managed and under-marketed grouping of resorts in North America. There is no place like Lake Tahoe for opportunity,” said Andy Wirth, to US media. He is the former Steamboat and Intrawest marketing boss who now runs the Squaw Valley and Alpine Meadows ski areas.

The area is on the doorstep of the huge population base of San Francisco and the surrounding area. Silicon Valley is within reach.

Searching out the powder in Heavenly. Image © PlanetSKI

“It’s a booming market right now,” said Rob Katz, chief of Vail Resorts to the US media. “Tahoe is behind Colorado in terms of infrastructure, sophisticated marketing and season-pass programs. I think people are looking down the road saying, ‘Hey, this offers some opportunity.’ I know we are.”

Development and building is tough as there are strict environmental and conservation concerns.

The local population is fiercely protective of The Lake that is the centrepiece of the area and indeed the tourist industry that supports many jobs.

Lake Tahoe is 99% pure and is 26 miles long, 12 miles across and 1,600 feet deep. It is the largest alpine lake in North America.

No development could lead to a pollution threat or any other impact on the lake.

Development will be costly and billions of dollars will be required to upgrade the facilities both on and off the mountains.

The main market is the local US skiers and snowboarders.

However European visitors, especially ones from the UK, are a target market.  The international market for Vail Resorts is around 10% of total business and the British market is the largest section.

More than Canada to the north.

There are direct fights to San Francisco from the UK, which will be an advantage for British visitors. For the ski resorts in Utah a connecting fight is needed.

However there is a three to four hour drive from the airport to Lake Tahoe whereas many of the ski resorts in Utah are just 45 minutes from Salt Lake City Airport.

The Colorado resorts are served by direct flights to Denver with a drive of less than two hours.

Interestingly Colorado, Utah and California are all considering whether to bid for the 2022 Winter Olympic Games that would bring in massive publicity and exposure.

Squaw Valley is considering a bid with Reno and it would tie in well with whole area’s expansion plans.

Whether it gets the Winter Olympics or not there are big plans ahead for the ski resorts in Lake Tahoe and it will be interesting to see how things develop.

We will be keeping an eye on it here at PlanetSKI.

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