The ski industry has been going through a huge amount of consolidation as Vail Resorts and Alterra Mountain Company have been buying up large numbers of ski resorts. It begs the question, is the buying spree over or are there still deals to be struck?
On the Vail Resorts Inc Q3 2018 earning conference call on June 7th, Vail Resort’s CEO Rob Katz was asked by a Bank of America analyst if he thought there were still more opportunities to buy resorts in North America.
From Vail Resorts Inc. (MTN) Q3 2018 Earnings Conference Call Transcript
Shaun Kelley — Bank of America — Analyst
Understood. Last question for me would be just switching gears to the acquisitions. Clearly, doing four mountains in two separate transactions is a lot of work and really adds a ton of visitors to the overall base of what you guys have today. Could you just tell us at the highest level, do you think there are still more opportunities like this in North America? I think one thing the investment community has struggled with is what kind of market opportunity is left within North America proper? There are a couple of these and maybe a couple of others that have targeted markets we didn’t know about like Stevens Pass. So, what’s your sense and specifically, do people start to increasingly need to affiliate or resorts need to affiliate with sort of yourself or the other large, let’s call it network pass product, to be successful as ski operators?
Robert A. Katz — Chairman of the Board, Chief Executive Officer
I would say to answer the first question, I think we absolutely believe there are still select opportunities in North America. I think the benefit for us right now is that the ability for us to add something that is unique, that is very targeted, can be quite powerful to the overall network, even if the cost of the acquisition is not necessarily huge compared to the size of our company at this point. I think we feel very good about that. Now, obviously, as time goes on, the ability to identify assets and resorts that don’t overlap with something we already have that truly are different, that are differentiated in terms of how the guest perceives it, that’s very, very important to everything in terms of how we look at acquisitions. So, corresponding those becomes, we have to be even more selective at this point.
There are opportunities, though, as we’ve talked about, outside of North America that I think we can start to have some of the same impacts that we’ve seen in North America. I feel like there is an opportunity for resorts in our industry to really have a lot of different choices. Certainly, there are benefits to be stand-alone. There are benefits to being stand-alone and aligning maybe with a pass product, and I think there are also benefits in becoming part of a company like us.
I do think with increased weather volatility, with other challenges that ski resorts face with the opportunities, positive opportunities that are provided by more sophisticated markets and being part of a larger network, yeah, we do feel that this kind of geographic diversity and the alignment that we can bring to resorts is a very powerful formula into driving success within our industry. It doesn’t mean it’s for everybody, but this is certainly where we think the best opportunity is for resorts going forward and their community.