Vail Resorts
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Linda Zamora
Bus 561-01 Strategic Management
Ed Maglisceau
August 24, 2004
Vail Resorts, Inc. is one of the leading resort operators in North America. The Company's operations are grouped into three segments, Mountain, Lodging and Real Estate, which represent 66%, 23% and 11%, respectively, of the Company's revenues for the 2003 fiscal year. The Company owns and operates four ski resorts in Colorado, one ski resort in Lake Tahoe, California/Nevada, and one summer resort in Grand Teton, Wyoming.
The market structure of the ski resort industry is comprised of the number of buyers and sellers, product differentiation, barriers to entry, government regulation, and diversification among competitors. Beaver Creek, CO was the last major ski resort to open in the United States. Beaver Creek opened in 1980. Today a resort builder easily could spend millions of dollars and several years on environmental studies, scores of building permits, all-weather roads, and water and sewer systems, all before stringing a single lift cable or sinking a foundation for a day lodge, let alone charging for a lift ticket. This creates an immense capital hump which a firm entering the market must overcome. By contrast, the same would-be resort owner can spend three or four months putting together a $150 million deal for an existing resort that will be spinning off cash as soon as the first snow flies...