Record year for Heavenly
Heavenly Ski Resort is enjoying a record year, according to the second-quarter report that parent company American Skiing Company released earlier this week.
“Heavenly is doing very well and on pace to have another record year,” said Les Otten, ASC’s chairman and chief executive officer. “Preliminary indications are that real estate activity (for presales of the Grand Summit Resort Hotel at Heavenly) is also extremely positive.”
Such is not the case for the company as a whole. Poor snowfall in Colorado and ASC’s eastern resorts has cut into skier visits, resulting in a second-quarter revenue loss of $10.8 million.
“It’s the ski business,” Otten said, referring to the inevitable ups and downs in an industry dependent on weather conditions.
”Unfortunately, the early season weather patterns produced a historically unprecedented series of rainy weekends, unusually warm weather and a lack of snowfall in the Northeast. In addition, the dearth of early season snowfall in Colorado had a negative impact on the entire Colorado market, including our Steamboat resort.
“Heavenly helps balance the company.”
Heavenly’s skier visits increased more than 11.6 percent in the three months that ended Jan. 24, compared to the same period last year. Skier visits at all nine of ASC’s resorts totaled 1.9 million, a 10.5 percent decline.
Total ASC resort revenue, including lift tickets, dropped from $106.9 million in the second quarter last year to $103.2 million this year. Real estate revenue also declined, from $7.9 million to $6.3 million.
In light of lower than expected results, the nation’s largest operator of ski resorts said on Monday it has negotiated an amended credit agreement with senior lenders that will enable the company to meet its debt and move ahead with a capital program of up to $20 million for the coming fiscal year.
“Lenders in the ski business understand that not every year’s going to be a good year,” Otten said.
He explained that the new loan agreement has features added to it that allow the company to have a bad second quarter.
”That’s a good sign,” said ski industry analyst Christine Lumpkins with Bear Stearns & Co. in New York. “It shows clearly that their lenders are behind them and understand the vagaries of weather and are willing to ride through the horrible season.”
Bank of Boston, ASC’s principal lender “has been working with ASC since the beginning” of the company, she said. “They, more than anybody, would know.”
Lumpkins also felt Heavenly’s strength and previous commitments from ASC would keep it strong.
“ASC previously announced it would focus its real estate development at its western resorts,” she said. “All indications are they will continue to focus (investments) on the West.”
Plus, the ski year for ASC isn’t over yet.
Otten is expecting for a better third quarter.
“The weather is getting better (in Colorado and the east),” he said. “I’m cautiously optimistic that we’re going to have a good third quarter. We’re running even or slightly ahead in the first five weeks compared to last year.
Associated Press contributed to this story.
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