A Whistler IPO, and the best story, yet…

Though my former business colleague and good friend Mike McCullough might have wished he’d waited until this week’s news about the Whistler-Blackcomb IPO was out before his feature story in Canadian Business was published, there’s much to praise about Mike’s reporting and I hope that people following the W/B situation will read it. McCullough brings in some new voices to the conversation that raises some serious questions about whether W/B is a good investment or not. Choice quotes include:

While home prices across Canada rose like never before between 2002 and 2007, in Whistler they were already flat to falling. “O-four might have been the real peak of our market,” says Patrick Kelly, an area Realtor for 30 years and president of Whistler Real Estate Co.

Actually, resort/residential real estate has taken a beating at places like Apex Resort, Kimberley, and Big White, too. Hard to believe that real estate has likely gone up more substantially in Fort St John than it has in the mountains of BC.

Buried in the middle of the story is the true kernel of not only the woes of the resort industry, but gets at the heart of the global economic collapse. Alas, as anybody who follows resort real estate knows, many of the buyers of Intrawest condominiums are financial advisors blowing off their annual bonus money, or ‘first in’ flippers putting very little money down and waiting until completion to sell their ‘deposit’ for a hefty profit. Snow eaters, they are not.

Fortress would take itself public the next year and quickly double in value to US$14 billion in a textbook case of unseemly rewards flowing to the hedge fund’s insiders.

Two of the best quotes are attributed to long time Whistler local and international resort planner Brett Harley:

They may have to improve the customer experience in other ways — for example, by limiting the number of tickets sold on any one day… A few top-ranked American mountains have tried that approach with some success, says Harley, noting, “On the crowded days, it’s not fun to be on the mountain right now.”

This is absolutely, 100 percent true. While I have certainly enjoyed most of my weekend ski days since moving back to Vancouver from the Okanagan and Big White, I got WAY more first tracks there than I’d get on a moderately busy weekend day at W/B. I think a lot of people are really going to get turned off by paying for parking this winter and that the local Vancouver skiers will be considering the Sun Peaks, Big Whites, and Silver Stars – though they will still need at LEAST a 3-day weekend to make that option palatable.

Harley adds that the recreational tastes of today’s generation X buyers lean more toward a wilderness experience than those of the big-spending baby boomers. They’re more likely to use a condo as a base camp for the backcountry, often avoiding the ski hill altogether…

Actually, this might work out well for W/B, a ski resort with a truly enormous backcountry. It’s amazing how great Whistler looks from the rear view mirror as you leave the area boundaries, skinning over to Cowboy Ridge or even beyond, to explore fabulous descents on Mount Fissile and in the Spearhead Range. Perhaps the best bargain might be one of those ‘backcountry one-way passes’ that right now is pretty much W/B’s best kept secret.

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