U.S. ski companies spend big on Canadian resorts

Blue Mountain owner Intrawest to be acquired in US$1.5-billion deal

There may be less snow than there used to be, but that’s not slowing investor appetite for Canadian ski resorts.

On Monday, Mont Tremblant and Blue Mountain owner Intrawest Resorts Holdings Inc. announced it has agreed to be acquired by the U.S. ski resort company Aspen Skiing Co. and private equity firm KSL Capital Partners in a US$1.5 billion deal.

Six months earlier, Coloradobased Vail Resorts Inc. announced its intention to purchase B.C.’s Whistler Blackcomb Holdings, the biggest ski resort in Canada, for $1.4 billion.

With a 20-year trend of declining seasonal snowfall, spending big bucks on Canadian mountain resorts seems counter-intuitive. But Michael Bellisario, an analyst with Robert W. Baird & Co. Inc., said the American ski chains are looking north of the border for the same reason as American visitors.

“Just as the strong U.S. dollar makes Canadian investments look more attractive, the stronger U.S. dollar also makes it more attractive for U.S. citizens to travel abroad as their dollars go further,” Bellisario said in an email. “Consumer confidence and consumer spending, especially discretionary spending, remain strong in the U.S., benefiting the ski industry.”

While some Canadian ski areas have struggled to adapt to warmer winters and changing demographics, many others have thrived, said Christopher Nicolson, the president and chief executive of the Canada West Ski Areas Association. Nicolson said resorts like Whistler Blackcomb that have successfully marketed themselves as year-round mountain vacation destinations have come out on top.

Given the trend toward consolidation in the travel industry, it’s no wonder big international firms are looking to Canada for acquisition targets, Nicolson said. “When you look at the increase in travel on a global perspective, they’re actually running numbers and looking favourably at the future.”