Ski mogul thinking positive despite lack of snow
NEWRY, Maine – American Skiing Co. chief Les Otten is dreaming of a white Christmas – and a snowy winter for that matter. And despite the un-wintry weather so far, he’s still got a positive outlook.
The head of the company that owns Heavenly Ski Resort and ski areas in New England, Colorado and Utah vows to press ahead with aggressive growth at his resorts.
And he says he is not discouraged by his loss of majority ownership to outside investors in order to stabilize the company’s finances.
”The struggles of last year are behind us,” said Otten, the company’s founder and chief executive officer. ”And the good news is that we are entering the year much stronger financially. … We are in a position to succeed.”
The Newry, Maine-based American Skiing Co., the nation’s largest network of ski resorts, lost $32.3 million last year. It is entering its third winter as a public company.
This season could be crucial to the company’s future. Besides weather, American Skiing must deal with a flat and aging skier market, and the fact that the company has yet to turn an annual profit since going public.
Otten says American Skiing will not go under should the winter’s weather again be poor. The company last summer received an infusion of cash by a Texas-based investment group, which could cushion the company from the financial effects of a lack of snow.
The $150 million investment by Oak Hill Capital Partners allowed the nation’s largest ski resort operator to pay down some debt and to extend the maturity date of most of the remaining loans.
Otten also points to the completion of two major real estate projects, a hotel and lodge, at The Canyons in Utah. The projects will generate real estate income besides putting more people on the mountain to buy lift tickets and other goods.
The resort also hopes to capitalize on the 2002 Olympic Games in Utah.
American Skiing plans to build a gondola at Tahoe’s Heavenly to lift people from the village to the mountain, while at Sunday River in Maine, the company’s Jordan Grand Summit Hotel is about 70 percent sold.
In Vermont, Otten hopes to begin construction of a European-style village at Killington in early 2001.
To continue the vacation-destination concept, he envisions building several European-style ski villages and entertainment districts at his ski resorts, all designed to encourage longer vacations.
Otten bought Maine’s Sunday River in 1980 and invested heavily in snow guns and ski lifts to move people faster and provide more consistent ski conditions. In 1997, his company offered stock to the public to fuel even faster growth through acquisitions.
The company became saddled by debt and its stock took a beating. Management shake-ups and layoffs followed. Then the resorts – except for Heavenly – suffered the most unfavorable winter weather in years.
The trend has returned this year, and even Lake Tahoe has not escaped it. On Monday, with the Christmas weekend less than a week away, Heavenly had only opened 37 percent of its mountain.
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