When Whistler was developed in 1960, the founders' goal was to build a venue that could host the Winter Olympics. But now that their dream is finally coming true, Whistler's day in the sun as host to the 2010 Olympic Alpine events is being clouded by the financial woes of its owner, Intrawest.
At a time when Intrawest should be capitalizing on the exposure the February games will bring, industry insiders say it is instead in hand-to-mouth survival mode, cutting staff and selling off assets.
Intrawest, which was taken private by the Fortress Investment Group during the boom of 2006, insists that its operations are conducting "business as usual," and those close to the company say the problems won't affect the Olympic Games.
"Intrawest continues to be in active dialogue with our lenders regarding refinancing a term loan," CEO Bill Jensen said in the only statement the company has released on the matter. "Our core ski operations are off to a very good start this season, and it is business as usual for Intrawest. We are continuing to provide our customers and homeowners with the memorable experiences that they have come to expect when they visit our resorts."
But Intrawest's recent missed payment on a $524 million debt obligation raises serious questions about how long Intrawest will indeed be able to continue as usual, and whether the real estate-saddled resort operator will be able to ultimately hang onto such crown jewels as the Whistler-Blackcomb, Steamboat Springs and Winter Park ski areas.
It has already sold off its Copper Mountain resort in Colorado as well as destination resorts in Florida and Las Vegas. And while Jensen implied in talks to ski industry officials last year that Intrawest's three largest ski resorts were not on the market, industry watchers said the missed December payment might well change the stakes for the company.
After all, it is the second time in two years the company has been unable to make its debt payment. In 2008, investors bailed out Intrawest, but they told the company at the time it was a one-shot save, sources say. And this time around, no one appears to be riding to the rescue.
Ski resorts, like every sector of the economy, have been hit hard by the global economic downturn. But it's not the performance of its ski operations that has put Intrawest at risk.
Like many of the high-profile luxury hotels in foreclosure, the story of Intrawest is one of timing in the real estate market. It owns a number of destination resorts and timeshare operations, assets that are worth a lot less now than when Fortress bought the company.
And like most real estate investments that were acquired or conceived during the recent boom times, Intrawest is highly leveraged. Thus, the only alternative to foreclosure, some insiders say, might end up being to give up one of its three key resort assets. (Intrawest doesn't actually own Winter Park; it manages it for the city of Denver.)
Such a scenario could reshape the competitive landscape for ski resorts, whose season passes usually offer discounts and/or free days at sister resorts.
The two giants in this arena are Vail Resorts and Intrawest, with Vail Resorts considered the largest in terms of skier visits. British Columbia's Whistler, however, is the largest ski resort in North America.
An obvious coup for Vail would be to sew up the Colorado market with the purchase of Steamboat.
Federal antitrust laws would probably block that possibility since Vail already owns so many nearby resorts, including Breckenridge, Keystone and Beaver Creek. But should it pass government muster, a Vail purchase of Whistler would make it the undisputed giant in North America skiing.
And while there is no indication that any of Intrawest's key assets are or will be on the market, the future of any ski resort right now looks brighter than most destination resorts.
Ralf Garrison, director of the Mountain Travel Research Program, which tracks bookings at ski and other resorts around the country, said places like golf resorts and other second-home markets targeting baby boomers face a long and iffy recovery, while ski resorts like Aspen are focusing on things like the X Games to lure younger generations.
"There is a better argument for mountain resorts than for beach or golf," he said, "because mountain resorts tend to have very passionate participants and offer a sizzling, exciting experience for the younger, millennial generation."
Email Jeri Clausing at jclausing@travelweekly.com.
This article has been updated to reflect that Vail Resorts no longer owns Colorado’s Arapahoe Basin ski resort. Vail does, however, have a marketing agreement that includes Arapahoe Basin in many of its season passes