Ski company hopes merger with hotel will curb season volatility | AspenTimes.com
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Ski company hopes merger with hotel will curb season volatility

Aspen Times Staff Report

American Skiing Co., one of North America’s largest ski resort operators, agreed Monday to acquire hotel manager MeriStar Hotels & Resorts in an all-stock transaction valued at roughly $185 million.Parties to the merger hailed it as a way to ease the seasonal fluctuations of the ski business by combining it with a segment of the hospitality industry that provides consistent cash flow and is not dependent on weather.American Skiing, based in Newry, Maine, plans to issue 1.88 shares for each MeriStar share and rename the combined company Doral International Inc., with headquarters in Washington, D.C. The deal, which is subject to shareholder and regulatory approval, is expected to close in the first quarter of 2001.The company’s ski resorts include Steamboat in Colorado; Heavenly at Lake Tahoe; The Canyons in Park City; Killington, Mount Snow and Sugarbush in Vermont; Sunday River and Sugarloaf/USA in Maine; and Attitash Bear Peak in New Hampshire. Skiers at most of the resorts probably won’t notice the change in ownership.”I don’t think they will see an immediate change,” said Leslie B. Otten, chairman of American Skiing. “It will continue to be a ski company.”Steamboat competes for market share against the Aspen Skiing Co. The Skico’s CEO, Pat O’Donnell, was nonplused at the news of the merger.”It sounds good on paper,” he said, but noted that the American Skiing Co.’s ownership of several Western resorts had not brought about any radical changes to the industry so far, and he couldn’t tell at this point how the new organization would either.American Skiing has recently completed a new $25 million gondola at Heavenly linking the mountain with a base area close to South Lake Tahoe, has poured millions into developing the mountain and the base of The Canyons resort just outside of Park City, and has completed a large lodging project at the base of Steamboat.”This `build it and they will come’ stuff doesn’t seem to pan out,” said O’Donnell.His counterpart at American Skiing would agree.”There have been two major expansion projects in Colorado, Pioneer Ridge [at Steamboat] and Blue Sky [at Vail],” Otten said. “Both expansions have yet to produce the skier visits that the capital was meant to create.”Of course, the real money in ski area development has always been in real estate, and American Skiing currently has an inventory of $175 million in fractional, or timeshare, real estate projects, most of it in projects at The Canyons and in Steamboat.


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