Katz pajamas: Alterra tries ski pass on for size
“It’s not every day you get to see Darth Vader.”
That quip, from the fellow at the head table in a Hyatt Regency convention room Wednesday, is not an uncommon designation for Rob Katz, head of resort industry behemoth Vail Resorts.
Katz has grown accustomed to the “evil empire” analogy since taking the reins of the publicly traded company in 2006 and acquiring nine resorts, including North America’s most trafficked, Whistler Blackcomb. Katz said he was initially reticent to take such a high-profile gig in an industry heavy on emotion and passion.
“It comes with challenges and public feedback. Some good, a lot bad; and in all kinds of online and in-person forms,” he said, addressing the standing-room only crowd in a rare public address that kicked off the “Industry + Intelligence” day of seminars preceding the opening of the Outdoor Retailer Snow Show this week at the Colorado Convention Center.
Katz’s casual and candid talk focused on the innovation at his company, centering on Vail Resorts’ 750,000-plus annual sales of its Epic Pass.
It was a good idea, he said, crafting a pass that offered unlimited skiing to all of Vail Resorts’ now 11 destination ski areas, which includes Vail, Beaver Creek, Breckenridge and Keystone. When Katz launched the Epic Pass in 2008, “people thought we were crazy, had totally lost our mind,” he said. By slicing his season-pass prices from close to $1,800 to $600 back then, Katz heard from competitors and locals that his resorts would be overrun and he was devaluing his company’s assets.
“People were convinced it was going to ruin the ski industry,” he said. “By the way, all this still lingers even this many years later.”
The angst over the Epic Pass may linger among locals, but not competitors.
Right outside the window of the Hyatt’s Capitol Ballroom on Wednesday, just as Katz reached the lectern, a sign started flashing on the Colorado Convention Center, where thousands of Outdoor Retailer Snow Show attendees were beginning to gather for their annual rally.
“Welcome to the new standard in season passes,” it read in giant orange print over a blue background, the same colors used by the Epic Pass. “Iconic mountains. Unique terrain. Real community. Adventure runs deep. #IKONPASS.”
The newly formed Alterra Mountain Co. promises that its new Ikon Pass will rival the Epic Pass, offering yet-to-be-disclosed
access to its 12 destination ski areas, including Colorado’s Winter Park and Steamboat. The company did not issue any statement or news beyond the flashing billboard.
The pass will be on sale this spring and details will come soon, said a company spokeswoman.
The Epic Pass certainly transformed the ski industry. It shifted the resort industry’s sometimes risky bet on snow over to skiers who must pony up for their passes months before the snow starts falling.
“In a year like this, this has been a good trade for us,” Katz said, referring to this season’s painful lack of snow across the West that has left resorts with double-digit visitor declines.
But even with the precipitous drop in visitors through the critical holidays, “our lift ticket revenue was actually up because we went into the season selling 20 percent more in revenue from season passes before the season even began,” said Katz, calling the Epic Pass “truly one of the best deals in travel.”
Alterra had several executives and consultants in the crowd Wednesday, taking advantage of an uncommon talk by the ski resort industry’s top executive. That wasn’t lost on Katz. His 30-minute talk was, in many ways, an outline for rivals hoping to tap the stupendous growth of Vail Resorts and its stock price, which was around $35 when Katz took over and was above $233 on Wednesday. Alterra is privately held — created by Denver’s KSL Capital Partners and the Crown family that owns Aspen Skiing Co. — but it’s expected the company will follow Vail Resorts’ lead into the publicly traded realm.
Katz said he was happy to share his leadership tips with a competitor who will soon lock horns with Vail Resorts in a battle that controls about 16 million skier visits at nearly two dozen of the continent’s top ski resorts.
So, any advice to Alterra over how to shape the company’s anticipated Ikon Pass?
“I’ve been very open that I think unlimited, unrestricted at a low price is important,” Katz said. “I think that’s what the guest wants and to the extent that other resorts offer passes that deliver that simple value, I think that helps the industry because that gets more people into the industry. … I think that’s good for everybody.”