Rob Katz to step down as Vail resorts CEO

[HardDaysNight]

To be fair it is not only Vail who have turned skiing into a total sh*t show. Alterra have done exactly the same at least at Utah resorts.

 

[Ken_R]

What is Rob Katz's legacy from being CEO of Vail Resorts from 2006-2021?

There are a lot of directions that you could take this in, but the most straightforward one also happens to be the most cynical: Vail's market capitalization soared from just over $1B in the beginning of 2006 to $12B today. For context, compare the 785% increase in Vail's stock price to a 254% increase in the S&P 500 over that same time frame. I'm not familiar with other major outdoor industry stocks, so I won't try to compare Vail to them, but needless to say Vail has done very well for their shareholders.

As far as the industry as a whole goes, Vail's creation of the Epic Pass under Katz championed an entirely new pricing model that has rocked the skiing world and lead to a frenzy of acquisitions, partnerships, and competing pass products. I doubt that Alterra Mountain Company would exist without these developments from Vail. Like it or not, one cannot deny the influence that Katz has had. If we were to make a list of the people the most influential people in the skiing industry so far in the 21st century, I would argue that Katz should be at or near the top of that list. Again, we can argue about the merits of the moves he made, but those merits do not deny how the industry changed under his management of Vail.

Yep. They made bank and now whatever happens happens, they got their retirement let the next people worry about it.

 

[Johnfmh]

I doubt who ever the CEO of Vail is will ever make any difference to my life, however skiing is cheaper today than it ever has been, if you are a serious skier.

So Katz’s legacy is cheap skiing via the Epic Pass. But is that really the case?

For anyone who has to fly across the county and stay at a Vail Resort, definitely not. The cheaper lift access is sort of like being comped a free breakfast at Vegas—the house always wins! It’s all the other stuff that takes a serious toll on the wallet—rental cars, airline tickets, lodging, ground transport, maybe a lesson for the kids, on mountain dining (which has seriously declined at Vail owned venues), parking, and the list goes on an on.

Even for the local, there can be costs—the occasional $8 Gatorade in the lodge, maybe paid parking here and there, etc.

Unfortunately, the only way VR is going to improve the experience and still make bank is to cater more to destination skiers. That might mean limiting Epic Pass days at certain resorts (Vail, Breck, Beaver Creek, etc.) like what is done for affiliate resorts or what Altera does for Aspen. I also hope VR can step up their food game. I would feel much better paying for a $25 burger if it was decent and not a reheated hockey puck.

 

[noncrazycanuck]

When you fly pay for lodging take a shuttle or rent a car and possibly pay for parking Vail has nothing to with those costs at Whistler. They will happily sell you a package but you can also arrange your own.
Vail only controls the on hill restaurants, ski schools and price of lift tickets. Everything else is market driven. Many options including all the other very good hills in BC.

 

[skiJ]

I have so much in my head about this but probably best not to put it in writing.


They want you to give the customers the experience of a lifetime but then they set up guidelines that don't allow you to do it. It gets discouraging which is why turnover is so high.

Tricia's second comment makes a lot of sense to me -

Vail started with a unique property and therefore a unique experience ( "the experience of a lifetime" ) and American's especially want to claim that - But
(but) as Vail expanded capacity to serve the masses - and then became Vail Resorts ( for the masses ) - the ability to provide the experience of a lifetime - something a person could claim was unique is lost -

part of it is Just corporate culture : trying to give everyone access to that special experience, standardized policies prevent staff from delivering an experience of a lifetime ( I believe I read a comment to that effect in another of Tricia's posts ) ;

an experience of a lifetime , comes at a scale, which also comes at a price - an economic price is rarely going to associated with an experience of a lifetime ;

I m not mainsteam with skiing these days, but if I wanted a unique experience at scale, I would either go to Powder Mountain, or Mt. Bohemia... ;
if I wanted an experience of a lifetime ( for a Price), I would go to Deer Valley - or Aspen Mountain. or Jackson Hole...

I have mixed feeling about what Vail Resorts is - and it will be interesting to see what the future is for these conglomerates and the current Passes.


I really like the idea of an experience of a lifetime - and I would offer, with your Family and/or your friends, You can make any day 'an experience of a lifetime' ! ... on my local ski hill, I have had a bunch of 'em !

go ! make it happen ! !!

thanks... skiJ

 

[Ogg]

To be fair it is not only Vail who have turned skiing into a total sh*t show. Alterra have done exactly the same at least at Utah resorts.

The Alterra shitshow is different than the Vail shitshow, IMO. Alterra has definitely brought bigger crowds that have caused a degradation of the ski experience but Vail has made other decisions that have degraded the experience far beyond just what could be attributed to more skier traffic.

 

[DoryBreaux]

I really don't like Vail, having worked for them in different roles for eight years. I have a lot of issues with almost everything they do. It will be interesting to see what direction Lynch takes the company, although that's really more of the steering committees job. Anyone who has worked for Vail and actually paid attention to what goes on can tell you; 'they' are the ones who really... uh... steer the ship. From my perspective, as someone who has lived in a town that Vail has a presence in for twelve years, and been to several Vail controlled towns while still working for them, and was in a relationship with someone who was wholly brainwashed by them, I can confidently say that whomever is the figurehead/CEO won't change the fact that VR is not good for skiers, skiing or the ski industry. Want to tell me I'm wrong? Go for it, I'm open to having my mind changed. But I doubt you'll be able to.

 

[markojp]

The Alterra shitshow is different than the Vail shitshow, IMO. Alterra has definitely brought bigger crowds that have caused a degradation of the ski experience but Vail has made other decisions that have degraded the experience far beyond just what could be attributed to more skier traffic.

FWIW, locally, the management team at Crystal has a much longer leash than local management at Stevens. I feel badly for a couple of folks I know up there (Stevens) who are great people having to live with decisions made far away and higher up.

 

[Tricia]

FWIW, locally, the management team at Crystal has a much longer leash than local management at Stevens. I feel badly for a couple of folks I know up there (Stevens) who are great people having to live with decisions made far away and higher up.

We see a similar trend here in the Tahoe area. Squaw/Alpine have more local based management even though its under the IKON pass, while the Epic resorts are managed from Broomfield.

 

[DanoT]

At the time of my retirement 11 years ago, I hadn't skied very many US resorts so I bought a truck camper for my truck and was wanting some sort of multi pass good for touring US and Canadian resorts.....So I will be forever grateful to Vail Resorts for starting the Season Pass Wars, even though I rarely ski Vail resorts.

At the time of Vail's purchase of Whistler word on the street was that it was Whistler execs that were showing the Vail execs how to run things. This is consistent with my belief that Whistler was a good fit for Vail ownership. Even down to the arrogant Whistler mayor and town council.

 

[Seldomski]

I'm curious to see what the next chapter is for Vail. Seems to me that the last 15 years were about consolidation and expansion into all the skiable areas within the US. Are there any major resort plays left now that Ikon is sitting counter to Vail?

Is the new CEO more suited to a less expansionist phase for the company? How do Vail and Ikon differentiate their products?

 

[Eric@ict]

I first slid down a mountain in 78. It was Breck, and then to all the other Summit county properties. Ive not payed much attention to individual companies and how they do things. TBH, what Ive read about on this string is no different than what I have seen at any large venue that holds lots of people. Its crowded, the food options are minimal and they are expensive, the trip to it is expensive, everything around the event is expensive. Last year there was a string concerning getting more people in general into the sport we all love. To do that there will be an increase in crowds. Im not quitting so someone else can learn.
There is something to be said about similarity in corporations. I call it the McDonalds effect. That is what draws people. They know what to expect with each visit and with disposable income being limited, some people arent willing to risk a poor experience.

At the end of the day, I dont care who owns the resort. My experience is based on my enjoyment. I do not give that control to anyone or company. VR made the military passes very reasonable and for that I am thankful. I was being priced out of the sport. There are more ski areas and skiable acres, that costs money and VR has helped make that possible.

VR does have an issue with its employees, no doubt. As long as there are people who want to live in the mountains and ski for a living, they probably wont change much. My daughter is a traveling Chef and refuses to work for VR because of their policies. Aspen calls her every year and asks her to come back and she does. VR has called and she says no. I understand why she wont work for them, but does that affect me as a consumer? Nope, I expect an over priced meal that will taste poor.
I go to ski and I enjoy it, every turn of it. I dont care who owns or operates the hill. I expect the venue to be no different than a $12 bottle of water at a Garth Brooks concert.

 

[fatbob]

Nope, I expect an over priced meal that will taste poor.
I go to ski and I enjoy it, every turn of it. I dont care who owns or operates the hill. I expect the venue to be no different than a $12 bottle of water at a Garth Brooks concert.

Most of this. VR exists because of a monopolistic system that allows local monopolies over individual ski areas (thanks to sweetheart forest service leases and the like). You might as well blame America or capitalism in general. They weren't the first or only players at it, they just through good timing and moderation of excessive real estate ambition did it better than ASC, Intrawest, POWDR etc. And that inevitably meant that good ops people at individual resorts were fed into or demotivated by a corporate playbook. The same happens in thousands of businesses around the world following any corporate takeover.

And it works - it is perfectly possible for an individual to milk an Epic pass while not paying a cent to VR in other areas, while less demanding tourists will happily sign over most of their vacation budget to VR for a consistent product that has just enough brand name cachet, even while skiing snobs slam it.

I appreciate it's not nice to be an employee on the receiving end of Vailisation but it seems most with any sense get out sooner or later or at least find a way of making it work for them. And of course the flipside is that consumers get shortchanged by retail rookies inexperienced in hard goods or the $25 frozen patty etc. But those are convenience offerings. Put in the work and you can still find better.

 

[413Skier]

Vail has not made skiing less expensive by lowering the cost of the epic pass. Let’s take MT Snow Vermont for instance, they have increased the cost of F&B by 25%+ and they have now implemented paid parking for most of the parking on weekends and holidays. Furthermore they have taken all the fun away from the MTN so the experience is becoming negative. As for the lowering of the Epic Pass this is price elasticity by lowering the cost they will make more money because the sales will out pace the lower cost. This will also make the experience worse by increased lift lines and more people on the MTN. So less expensive no, but maybe cheaper! Vail isn’t about skiing or guest services it’s a real estate company bottom line.

 

[Ken_R]

Vail has not made skiing less expensive by lowering the cost of the epic pass. Let’s take MT Snow Vermont for instance, they have increased the cost of F&B by 25%+ and they have now implemented paid parking for most of the parking on weekends and holidays. Furthermore they have taken all the fun away from the MTN so the experience is becoming negative. As for the lowering of the Epic Pass this is price elasticity by lowering the cost they will make more money because the sales will out pace the lower cost. This will also make the experience worse by increased lift lines and more people on the MTN. So less expensive no, but maybe cheaper! Vail isn’t about skiing or guest services it’s a real estate company bottom line.

I still remember the day when purchasing a season pass at any of the big resorts was really cost prohibitive unless you lived there full time or had plenty of money to burn, or both. And you could only buy a season pass for one resort. The EPIC pass changed skiing on the consumer side and on the business side giving ski resorts huge access to capital well before the season even started. Was it for the overall good of the sport. I think so, but with the good came some of the bad.

 

[Tom Inca]

In 2007, before the Epic Pass, you had to be physically present in the state to buy a Colorado Pass. We had arrived in Vail one day after the deadline. My father in law emailed Rob Katz to ask if he could still buy passes for my family. He kind of knew Katz, I think from their mutual involvement in the Birds of Prey, but not very well. The email asking for the favor began with, "I was skiing the white ribbon of death today ...." Katz did not take kindly to the WRD reference. He made my father in law apologize before selling the passes to us, but we did get our passes. We have bought Epic Passes every year since then.

 

[Philpug]

This gets missed a lot, that @fatbob usually hits on very well.

They weren't the first or only players at it, they just through good timing and moderation of excessive real estate ambition did it better than ASC, Intrawest, POWDR etc. And that inevitably meant that good ops people at individual resorts were fed into or demotivated by a corporate playbook. The same happens in thousands of businesses around the world following any corporate takeover.

Vail didn't invent these passes. It falls under the saying "The early bird gets the worm, but the second mouse gets the cheese". Vail is the second mouse in the pass world and capitalized on it. The ski industry, yes industry needs skiers. The Epic pass helped with getting volumes of skiers on the hill but obviously at a cost...everything comes at a cost. Do I agree with their methodology? No, not everything but I understand why many of their moves were made. On the overall picture answering to the shareholder as your first priority is a short term gain but I don't see it as along term success particularly is a service oriented industry as the ski industry is.

 

[Kneale Brownson]

I wouldn't get your hopes up on either of those fronts. @Tricia had a great response about the uniqueness of the properties, and their recent decision to lower pass prices goes directly against better managing crowds. If anything, I see them trying to move even further towards the low-cost gym membership model where low season pass prices (and, analogously, high daily ticket prices) get tons of people to purchase Epic passes even though a good chunk of those people will hardly use their pass.

Kind of a ticket sales limitation right there, eh?

 

[Mike King]

Phil pointed out that Vail didn't come up with the low-price pass product, but they were the ones who figured out just how important moving from day revenue to season revenue was. Before, ski area operators had revenue that was highly dependent on snow conditions. The revenue was only present in the winter season when the resort was open and selling day tickets.

By moving to a revenue model mainly dependent on season pass sales, the revenue became more fixed and less variable, which better matches the cost structure of a resort--it's predominantly fixed costs. Even better, by managing the sales process with discounts for buying early or committing to buy, they received revenue at times of the year when revenue used to be absent.

They then realized that they could make the pass even more attractive to consumers if they acquired additional resorts. This increased the value of the pass to consumers. Even better, they realized if they acquired resorts that were geographically dispersed, the snowfall risk that consumers otherwise would face (what? I bought a pass for X, but the conditions are crappy? I won't do that again) removing a barrier to sales of the pass.

They further expanded into ancillary businesses: rental, real estate, transportation, hotels, etc. Now the revenue streams from some of those were cyclical with the ski area, so these diversification strategies diversified some of the cash flow risk associated with the pass sales.

They realized that small areas could be feeders for the destination resorts. So acquire those, put them on the pass, and you have a new channel to your captive market.

Sure, there's been some costs associated with their transformation. The product needs to be predictable, so there's not much chance for innovation at any of the resorts -- everything is driven down from the top. As it has to be to get the acquired properties on the same page with the value proposition driving the company.

In short, Katz transformed the skis industry. The folk on this bulletin board are passionate skiers/riders who miss what was lost. But realize that what was gained was huge as well. Look at the proliferation and expansion of lifts, lift served terrain, and lift capacity -- those wouldn't be possible financially with the old model.

As to whether Vail is sacrificing the long-term for short-term gains, I guess we will see. They survived the Great Recession, they had record visitation in the pandemic. Vail Mountain is still seen by consumers as a luxury resort with little leakage of premium visitors to unaffiliated resorts, like Aspen. It's remarkable that Aspen is cheaper to visit than most of the Vail resorts...

So, lots of folk can find things to belly-ache about Vail, but I've got to hand it to Rob Katz -- he remade the ski industry and delivered huge returns to his shareholders. And in many ways, he made skiing better.

That being said, I'm glad I no longer work for him.

Mike

 

[Wasatchman]

So, lots of folk can find things to belly-ache about Vail, but I've got to hand it to Rob Katz -- he remade the ski industry and delivered huge returns to his shareholders. And in many ways, he made skiing better.

That being said, I'm glad I no longer work for him.

Mike

Agree with you, Mike. And some actually prefer working for Vail versus smaller family entity.

What I'm most bummed about is when Alterra came in, copies Vail more or less, and creates an industry duopoly. Not that I blame Alterra, as it's clearly a successful business model. I enjoyed it when it was just Vail because if I didn't like the business model or extra crowds, you could simply just choose another resort that isn't Vail affiliated. But now pretty much every major resort is Epic or Ikon and that's what frustrates me. But I agree, Rob Katz and Vail transformed the industry, did an amazing job for shareholders, and for the most part are very good at what they do.