Alterra Mountain Co. on Tuesday said it had closed on its acquisition of Arapahoe Basin.
The $105 million deal, which was first announced in February, closed after an investigation from the U.S. Department of Justice. Alterra Mountain now operates 17 ski areas – including Winter Park and Steamboat – and two helicopter skiing operations in Canada.
The purchase will not change Ikon Pass access to the 1,428-acre Arapahoe Basin, which is limited to 5-7 days.
Alan Henceroth, who started as ski patrol director at Arapahoe Basin in 1988 and has served as chief operating officer since 2005, will remain at the helm of the ski area everyone calls The Legend.
“Our community at Arapahoe Basin is special, and it’s something we deeply cherish and protect. The thrill of skiing the Pali, the tradition of hiking the East Wall, the magic of skinning to moonlight dinners, and the joy of sharing a chairlift ride with friends – all of these experiences define who we are and will always remain at the heart of A-Basin,” Henceroth said in a statement.
Henceroth captained a rare break from Vail Resorts’ Epic Pass in 2019, after offering unlimited skiing under the program since 1998. The huge crowds skiing on the Epic Pass pushed Henceroth to join Alterra Mountain Co.’s pass program in 2019, keeping visits limited to seven days at A-Basin for $1,449 Ikon Pass holders and five for holders of the $1,019 Ikon Base Pass.
Alterra embraces “everything that makes A-Basin unique,” Henceroth said in his statement.
“As we move forward, I am confident that the spirit of The Basin will not only remain but grow stronger than ever as we continue to work with leaders on the mountain on a 10-year master development plan to address parking, enhanced snowmaking, and improvements to the experience for skiers and riders of all skill levels,” he said.
The seller – Toronto-based real estate investment firm Dream Unlimited Corp. – said the sale was worth 150 million Canadian dollars, or about $105 million in U.S. dollars. Alterra did not disclose a sale price.
Dream Unlimited told investors it expected a CA$110 million after-tax profit from selling the ski area the company has owned since 1997.
The company reported that Arapahoe Basin generated CA$41.8 million – $29.9 million in U.S. dollars – in net revenue in the first nine months of 2024, earning CA$16.2 million in income.
Dream Unlimited said Arapahoe Basin earned CA$7.3 million off the CA$44.5 million in revenue in 2023, down from CA$13.5 million earned from CA$46.7 million in 2022, a decline in income the company blamed on higher payroll costs and the increased cost of operations “associated with lower than historical snowfall levels” and reduced skier visits in the early season.
The CA$150 million price tag for Arapahoe Basin represents a multiple of 10 to 13 times the ski area’s earnings, which is on the high end of the industry’s formula for establishing a value for ski areas. Traditionally ski areas have sold for a multiple of eight to 12 times earnings, but there are exceptions to that formula.
The privately-owned Alterra, for example, nearly doubled the formula when the emerging operator acquired the iconic Deer Valley ski area in Utah in 2017.
The Arapahoe Basin deal closed after a bit of scrutiny from the Department of Justice.
The department requested information from the ski area and the 18-resort Alterra Mountain Co. as well as annual ski resort surveys conducted by Boulder’s RRC Associates for the National Ski Areas Association.
The Justice Department served the market research firm and ski resort trade group with civil investigation demands in June, seeking annual surveys that detail demographic and economic trends that are typically kept private. The National Ski Areas Association told its member resorts in the Rocky Mountains that it worked with the feds to narrow the scope of the inquiry to just the six-state Rocky Mountain region. The association promised its members that it was “determined to maintain the strictest confidentiality” when sharing the annual Kottke Report that is not available to the public.
“We are assured that the Department of Justice is bound by statute to maintain the confidentiality of this data as well, and they have further represented to us that none of it should ever be disclosed in any public document or forum,” reads a letter the association sent to its member resorts in the Rocky Mountains.
The U.S. Attorney General’s Office in Colorado declined to comment on the inquiry. The office also declined to say whether the Justice Department has looked at any other resort acquisitions in recent years as the resort industry’s two corporate titans – Alterra Mountain Co. and Vail Resorts – consolidate ski areas for inclusion in their Ikon and Epic season passes.
It’s not the first time the Department of Justice has looked at Arapahoe Basin.
In 1996, shortly after Vail Resorts spent $310 million to buy Breckenridge, Keystone and Arapahoe Basin from Ralston Resorts, the Colorado attorney general and the Department of Justice’s Antitrust Division sued to remove Arapahoe Basin from the deal.
The lawsuit argued the Vail Resorts’ acquisition of the Summit County ski area would have “lessened competition substantially in the Front Range skier market.” That year, the three Ralston Resorts ski areas in Summit County accounted for 26% of the visits from skiers on the Front Range and Vail Resorts’ Beaver Creek and Vail ski areas in Eagle County accounted for about 12% of the Front Range skier traffic. The feds decided that 38% of the market share for Vail Resorts was too much and would cost skiers more.
Vail Resorts selling Arapahoe Basin “will prevent Front Range skiers from paying higher lift ticket prices,” reads a January 1997 statement from the Department of Justice.
“Competition among ski resorts has meant discounts for Colorado Front Range skiers,” said Joel I. Klein, the acting assistant attorney general in charge of the department’s Antitrust Division in 1997. “Without selling off the Arapahoe Basin resort, this deal would have resulted in fewer and smaller discounts on lift tickets.”
The resort landscape was much different in the late 1990s, when a vast majority of skiers bought daily lift tickets. Today, U.S. ski areas are seeing record high traffic with more than 50% of all the nation’s 60.4 million visits coming from skiers using season passes, up from 38% a decade ago. Those passes are priced around $1,000 to $1,450, which is below the cost of most season passes in the late 1990s. In many cases these days, when a resort is acquired by either Vail Resorts or Alterra Mountain Co., the cost of a season pass decreases as part of an overarching business strategy that pushes skiers to buy passes and tickets long before the lifts start turning.
Extra-large ski areas – like Vail Resorts’ Breckenridge, Keystone and Vail and Alterra Mountain Co.’s Steamboat and Winter Park ski areas – are driving season pass sales, with a 19% annual increase in sales in 2023-24 pushing the average number of passes sold at extra-large resorts to more than 50,000. Resorts in the six-state Rocky Mountains sold the most passes of any region in the country – nearly 37,000 each in 2023-24 – according to national reports.
On Monday night, Arapahoe Basin ski patrollers announced they were planning to unionize.
The patrollers on Monday filed a petition with the National Labor Relations Board asking for union representation for 58 patrollers by the Communications Workers of America, which now represents nearly 1,000 patrollers and lift maintenance crew members at 12 ski areas in Colorado, Montana, Washington and Utah. The United Professional Ski Patrols of America union under the CWA Local 7781 represents patrollers at Breckenridge, Eldora Keystone, Loveland and Purgatory. Patrollers at Crested Butte, Steamboat and Telluride ski area have been unionized for years.
A recent wave of unionized workers lands on ski resorts as housing prices and the cost-of-living in mountain communities skyrockets.
“The union will guarantee that we have a voice at the table to negotiate for what is important to us as a staff,” Arapahoe Basin ski patroller Kali Flaherty said in a statement. “We hope to work closely with management to ensure we receive the benefits, compensation, and respect we deserve for our hard work. We also hope that our community – both in Summit County and the surrounding areas – will come together to support the values and goals we stand for.”
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