In mid-August, the 20-year-long era of the company that operates Whistler-Blackcomb, Mont Tremblant, Panorama, Blue Mountain and numerous other resorts came to an end, or turned a page in its history. After appearing to have ﬂatlined in the face of a rising Canadian dollar, stagnating skier-visits and a scarcity of lucrative new development projects, publicly traded Intrawest confronted the apparent limits to its growth by engineering its sale. The buyer: Fortress Investment Group, a massive privately held international investment ﬁrm. The price: US$2.8 billion (including assumption of debt), or US$35 per Intrawest share.
How the Lebanese-Canadian Houssian burst onto the skiing scene is the stuff of legend. One day back in the mid-’80s, while enjoying the slopes of Blackcomb Mountain, the solid recreational skier happened upon Hugh Smythe, manager of the then-ailing mountain. The two hatched a scheme to bring the below-treeline, cruising-only resort’s formidable alpine terrain within reach. The next summer they trucked in a used T-bar from Fortress Mountain, Alberta, by night and planted it on Blackcomb’s craggy peak. Houssian bought the place for a song, and the new terrain sent its popularity soaring. The following season Smythe and Houssian installed three high-speed quad chairlifts—an amazing feat in an era when there was only one such lift in North America. It also brought Blackcomb’s its mile-high vertical within easy reach.
With that, Blackcomb—and Intrawest— simply soared, and Houssian developed a unique business model. He recognized that lifts (plus the other mountain facilities) and hotels (and other forms of accommodation) shouldn’t exist in isolation. They needed to work together— indeed, to grow symbiotically. Good lifts and runs attracted skiers. But skiers wouldn’t stay for extended periods, or necessarily return regularly, without good villages. Good villages made people come back, and brought in new people. That created the trafﬁc to build more lifts.
Each side should be proﬁtable on its own. But meshed into a well-oiled resort machine, the combination could be wildly proﬁtable. The whole operation would be overseen by a modern corporate centre with professional expertise in ﬁ nance, administration, marketing, legal and human resources. Economies of scale could be gained, and proﬁ ts multiplied, by replicating the model in other places. And so Intrawest spread all over North America—into Quebec, Colorado, the Appalachians and California—plus the Alps. Eventually the ravenous machine returned to its roots and bought up its competitive neighbour Whistler Mountain in 1997.
Although the company’s aggressive corporate style turned off some—critics nicknamed it “Intraworld”—I often wondered if there was an alternative. Until Houssian came along, claiming that Canadian ski resorts even had a “business model” was a joke. Typically ski hills were run either by a local martyr of superhuman industriousness (think Fernie’s Heiko Socher) or a group of self-important but semi-qualiﬁed local businessmen. New lifts came along only slightly more frequently than bankruptcy. Customer service was non-existent. Many ski resorts were closer to gloriﬁed community facilities than actual functioning businesses.
Intrawest, along with a few other companies, changed all that. Yes, its resorts often grew crowded. Yes, they were expensive. Yes, the corporate model sometimes became too remote, decisions seemingly robotic. But what did the average skier actually get? Great lifts, everexpanding terrain, phenomenal grooming, onhill food that could actually be termed “cuisine”, fast terrain openings after a big storm and top- ﬂight slopeside accommodation. By and large, a fantastic skiing experience. And, through competition and pressure, sharply elevated offerings at other ski resorts. Meanwhile, other operators attempted acquisition/development business models, with varying degrees of success.
Lately, it became apparent that Intrawest had reached a plateau, both from its ﬁnancial statements and from anecdotal reports of slower real estate. The dizzying ever-upward spiral of Whistler halted, despite Olympic hype, in the face of a suddenly high Canadian dollar and fewer American visitors and buyers.
On the mountain, meanwhile, service at Whistler-Blackcomb had begun to suffer the effects of monopoly ownership. The legendary fast openings lengthened. Whistler’s Peak Chair was reduced to ridiculously short hours even during the Christmas-New Year’s rush. Right in the holidays last year, Blackcomb shut several key lifts to save money. Later in spring, as trafﬁc dropped, lifts and large terrain areas at each mountain would begin to close. Food service shrank. One began to wish for the healthy competition of separate ownership.
One wag I know suggested Houssian sold Intrawest after seeing Al Gore’s hysterical (and error-riddled) polemic “An Inconvenient Truth”, and concluded that global warming threatened the long-term viability of his ski resorts. If that’s the case, Houssian should have visited Europe, much of which recorded two of the snowiest, coldest winters in 60 years.
In any case, having come under pressure from one of its main shareholders, Intrawest ofﬁcially went on the block in February. Some saw the August sale heralding an end to ski resort consolidation under large, multi-resort developer-operators. Despite its suggestive name, the buyer, New York-based Fortress, is not a resort operator. One of its investments, in fact, is a string of nursing homes. Having paid a 32 per cent premium for Intrawest, Fortress may see proﬁt in selling off assets individually. But Houssian, quoted on the day the sale was announced, suggested Fortress would pursue growing the Intrawest franchise further, into year-round international resort development and operations. So, right now anyway, the fate of Intrawest’s resorts is simply unknown.Tags: Blue Mountain, Fortress Investment Group, Intrawest, Mont-Tremblant, Panorama, ski resorts, Whistler-Blackcomb