Skico’s Kaplan, Vail Resorts’ Katz on recession winners and losers, ski area opportunities and challenges
In a recent call with leaders from ski towns in Colorado, Mike Kaplan, the president and CEO at Aspen Skiing Co, did not take pleasure in the statement, but acknowledged that the pandemic has had both winners and losers.
The people who lost out the most were in the service industry workforce, the leisure sector, which suffered devastating losses, especially in the resort towns which were built around the tourism industry.
The winner has been the real estate industry, which has had a record year in ski towns across the West.
In 2020, Eagle County and Pitkin County real estate sales each surpassed the $3 billion marker for the first time ever.
Margaret Bowes, the executive director of the Colorado Association of Ski Towns, was on the call with Kaplan, and described how the hot real estate market has had a negative affect on locals.
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The record real estate sales are “resulting in increased real estate values, and it’s making it even harder for local full time residents to get into the real estate market,” Bowes said. “In some cases it is taking what has historically been long-term rentals out of the housing stock as property owners decide to take advantage of the strong market, and it’s making our local government and our nonprofit affordable housing efforts even more challenging.”
Bowes said remote working has spurred the new demand as “folks have decided that our rural mountain communities are really great places to live during a pandemic, especially when they can work from anywhere, their kids can go to online schools from any location.”
In a call to investors in December, Vail Resorts CEO Rob Katz also said people are looking for opportunities to be outside of big cities because of COVID, and the exodus to resort areas has created “in some ways probably the strongest demand we have seen since 2008.”
But Katz said he can see a few ways in which the resort industry benefits from this trend of people working remotely from resort locations.
“To the extent that people are able to put themselves in vacation spots in a more balanced way throughout the year, and not just cluster into these peak times, that would be a huge benefit to, I think, the resort industry and obviously our company, because we still obviously do struggle to move people out of the peak times and into the off peak times,” Katz said. “To the extent that they are not as tied down to their jobs or potential schools, and can do things remotely, whether it’s to buy real estate or it’s just that people will travel in a more even way throughout the season, I think that could represent a major opportunity coming out of the COVID dynamic to the entire vacation industry but particularly for our company.”
Katz also commented on the possibility of resort real estate seeing some shakeups during COVID which could provide opportunity for more acquisitions. The company went from owning five resorts in 2010 to 37 resorts today.
“We have seen in previous events that are sometimes to destabilizing that after things stabilize that people are sometimes interested in having strategic discussions again,” Katz said. “Usually in the middle of the instability sometimes it’s tougher to have those discussions, but I think as you come out of the other side I think that’s where there’s an opportunity.“
Katz said the 2008 recession created opportunities for Vail Resorts to pursue new acquisitions, and the company will also keep its eye out for new opportunities following the 2020 recession.
“I think for us when we look back historically we were able to do a lot of things both internally and externally on the strategic side coming out of the ’08-’09 recession, and I think we’re very focused on positioning the company to make the most out of whatever opportunities are out there,” Katz said. “And certainly our capital liquidity and access to capital has been a strength, maybe it’s a more differentiated strength right now, so leveraging that to make sure we don’t miss anything over the next 12 months I think is critical.”
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