Ski Resorts
Ski Resort News: Intrawest in Talks Over Missed Debt Repayment.
Financial websites are abuzz after Intrawest’s reportedly missed a $524 million (USD) loan repayment on Wednesday. You can read the details here.
Intrawest partially or fully outright owns many popular ski resorts in North America, including Steamboat, Ontario’s Blue Mountain and Whistler Blackcomb. Vancouver’s Olympic Organizing Committee has said the issue will not effect any events to be held there, regardless of the outcome of the situation. Moreover, Intrawest has also said that regardless of the outcome, it will be business as usual to any visitors of the resort (good news for me, as I’m heading there in about three weeks).
So how did Intrawest end up here? This article in the Toronto Star points to the real estate market. Intrawest reportedly relies a great deal on luxury home sales, and a drop in sales combined with a devaluation of the market in general has conspired to create difficult market conditions for the company. The loan was reportedly procured to help finance the acquisition of Intrawest by Fortress Investment Group, a New York-based asset management firm.
Of course, it’s not like Intrawest is the only company in this space that has had issues since the economic downturn. Luxury properties and ski vacations often fall victim to family spending cuts early when budgets get trimmed. As an analyst in the Toronto Star piece said, “It’s not just Intrawest that’s suffering. They’re in a market with lousy fundamentals and disappearing margins.” If Intrawest is having a problems in an Olympic year at one resort and a decent start at most of their others, I hate to think of how other resort operators are doing.
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