Great season for Heavenly, but not for parent company
As West Coast ski resorts boast what some consider the best ski season ever, national ski corporations with major investments on the East Coast nurse economic bruises.
Heavenly Ski Resort, which still has plenty of snow left on the mountain and will probably close May 31, has enjoyed a great year, according to Managing Director Dennis Harmon.
“We’re looking very good, ahead of last year, and last year was the best year ever,” he said.
Heavenly’s parent corporation, American Skiing Company, with most of its ski resorts on the East Coast, has not had such a great year.
It’s not the only company hurt by an exceptionally late start to the ski season at Northeast resorts, and to some extent, Midwest resorts. Stocks for the three major publicly traded ski corporations plummeting by midseason. Stock prices for Vail, Intrawest and ASC are beginning to climb back up but remain far below their high point.
Intrawest Corp., whose holdings include Whistler, B.C., Mont Tremblant, Quebec, Copper Mountain, Colo. and Mammoth Mountain, Calif., ended the day on Wednesday at 16 3/16 per share. During the past 52 weeks, the company’s stocks have fluctuated from a high of 21 1/4 to a low of 10 3/16.
Vail Resorts, Inc., owner of Vail, Breckenridge and others, ended Wednesday at 18 11/16 with a 52-week range of 30 7/8, down to 14 1/8.
American Skiing Company had a 52-week stock peak of 14 7/16 that plummeted to 2 3/8 during the season. On Wednesday, the company closed at 5 5/16.
“I expect all three companies will cut back on capital expansion plans for the next year,” said ski industry analyst Christine Lumpkins of Bear Stearns & Co. of New York.
Once snow began to pile up at the East Coast ski resorts, the corporations were able to regain some momentum.
Intrawest recently reported a 6 percent increase in skier visits and income for the third quarter of its fiscal year, which includes most of the season. Vail and ASC are expected to release third quarter reports in the next couple weeks.
“American Ski has seen quite a nice rebound from its low of 2 3/8,” Lumpkins said during a telephone interview on Wednesday. “Wrapping up the season here, ASC will probably come in relatively flat with last year.”
Flat isn’t bad, but for a company poised to sink funds into new developments, including substantial commitments to the South Lake Tahoe Park Avenue Redevelopment Project, the news isn’t great.
“Those projects with shovels in the ground, the year is not necessarily going to affect them,” Lumpkins said during a telephone interview on Wednesday. “I’m not saying that new projects won’t happen (but) if it had been a great year (ASC) probably would be able to start another project sooner.
“There’s the potential for further delay.”
Heavenly officials don’t expect problems with the scheduled May 2000 start for the Park Avenue project. It includes an ASC Grand Summit Resort, gondola to Heavenly and an ASC partnership for the Lake Tahoe Inn. The operating partner is expected to be announced June 15.
“It’s moving forward,” said Stan Hansen, Heavenly’s vice president of governmental affairs. “We’ve still got negotiations to do, but there are no obstacles that I see.”
Hansen does not consider the financial stresses of the parent company to be a drag on its plans.
Rumors of extensive cutbacks could be due to the seasonal fluctuations of the business. Operations are working on a lean budget because the resort normally would be closed by now, Hansen said.
Redevelopment plans continue on schedule.
Heavenly officials will meet Friday with city officials to work on such things as the development and disposition agreement, a contract that ensures the city won’t get stuck with the bill. Hansen and Harmon said they expect the DDA will be completed in August or September, later than an draft schedule that listed May 4, but in line with an adjusted timeline.
Additional presales on the Grand Summit Resort are needed to secure funding for construction. Presales broke company records early on but have slowed. The resort will begin airing infomercials on Memorial Day Weekend to increase interest.
On the national front, Lumpkins felt that ASC’s financial support from Bank of Boston will continue into the next ski season.
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