Booth Creek Ski Holdings, Inc. History

Company Perspectives:

The resorts Booth Creek currently owns are friendly regional resorts whose appeal is in their proximity, unique heritage and commitment to provide exceptional guest service. Their concept rests on preserving the individuality of these gems, while establishing consistency from the standpoint of a total commitment to exceeding guests' expectations.

Company History:

Booth Creek Ski Holdings, Inc. is the fourth largest ski resort company in North America, overseeing the operations of resorts from California to New Hampshire. Although a young company, Booth Creek boasts some of the most high profile ski resorts in the industry--including regions near Lake Tahoe and Jackson Hole, Wyoming--and is managed by industry veterans, many of whom worked in the 1980s for Vail Associates. Heading up Booth Creek is George Gillett, an entrepreneur who since the 1960s has built fortunes around businesses as diverse as meatpacking plants to the management of football teams. While Gillett's expertise in the ski industry is the hallmark of the business's success, Booth Creek is also owned and funded in part by John Hancock Mutual Life Insurance Company and the Canadian Imperial Bank of Commerce.

Antecedents of Booth Creek: 1985 through the Mid-1990s

George Gillett founded Booth Creek after intimately acquainting himself with the ski industry in the 1980s. Growing up in Racine, Wisconsin, Gillett discovered early on that his real aim in life was high finance, a discovery which led him far from his Midwestern roots.

It was perhaps Gillett's energetic career and diverse experiences that had made him so well suited for the risky ventures of the ski industry in the 1980s. In the 1960s Gillett began his business career as one of the managers of the Miami Dolphins, and by the middle of that decade he had parlayed his success with the team into an ownership of the Harlem Globetrotters, which he later sold for $3 million. With the revenue from his basketball team Gillett purchased a meatpacking plant and began buying up television stations; by the mid-1980s Gillett was the largest private owner of television stations in the country, the number of which totaled 17 in all.

It was at this point, in the mid-1980s, that Gillett became involved with the skiing industry. An avid skier, Gillett became president in 1985 of Vail Associates, the company which at the time owned the Vail ski resort in Colorado. Three years later, Gillett bought the resort outright, using revenue from his television stations to pay for the $130 million price tag.

Gillett's tactics with Vail proved him to be an aggressive, ambitious businessman: in less than a decade he turned Vail from a popular if not tremendously well known ski resort into the most successful and fashionable ski destination in the country. After becoming owner of Vail, Gillett set out to make the area desirable not only to skiers, but to those seeking general recreation as well. To that end, he developed a great deal of real estate at nearby Arrowhead and Beaver Creek, a move which, while further popularizing the sport, made him not a few enemies amongst skiing 'purists.'

Gillett's far reach into so many areas of business came crashing down on him at the end of the decade, when he was forced to default on almost $1 billion worth of debt. Declaring personal bankruptcy in 1991, Gillett was forced to give up not only such personal property as his 250,000-acre Oregon ranch and his $5 million car collection, but he had to cede control of Vail as well. Gillett managed, however, to save himself from complete ruin. He worked out a way by which to collect $1.5 million a year in salary from Vail's new owners, Apollo Advisors LP, which, along with some other revenue saved from his meatpacking plant, were used as seed money to start Booth Creek.

The Changing Face of Skiing: Booth Creek and its Competitors in the 1990s

After the spectacular failure of Gillett's Vail Associates, his new company, which he founded in 1996, was forced to look outside of Colorado for acquisitions and further growth. By the mid-1990s, however, competition among resorts had been reduced to a battle between only a handful of powerful national companies, each of which owned a multitude of prime skiing real estate across the country. Areas such as Vail, Aspen, and Jackson Hole were already controlled by such competitors as American Skiing Company and Vail Resorts; what was left for Booth Creek, then, were lesser known, smaller regions which attracted a more sedate, less fashionable--and therefore less wealthy--customer base.

By the 1990s the skiing industry was divided between two factions, one of which was traditional, holding on tightly to the notion that ski resorts should exist purely for the sake of skiing, and the other of which took its cue from the more expansive and commercial idea of generalized recreation, of which skiing was only a part. Exemplifying the latter, resort skiing, was the CEO of Vail Resorts, Adam Aron, who, while being the head of the largest ski company in North America, made efforts to attract every type of consumer to his locations, whether they be competitive skiers or day-tripping shoppers. Companies like Aron's, according to Bill Saporito, a writer for Time, were 'pouring record sums into capital improvements, adding fast chair lifts and such amusements as skating rinks and snow-tubing shoots to attract more nonskiing vacationers or at least divert them while their partners, spouses and children were on the slopes.'

On the opposite end of the scale was the CEO of Aspen Skiing Company, Pat O'Donnell, who held that a ski resort should cater to skiers, and to skiers only. To such purists, the idea that ski resorts should look more like Club Med than sports refuges was repugnant. Writing in Skiing magazine in 1997, Lee Carlson noted that the 'notion of competition makes many skiing purists groan. If Vail and other resorts are going head-to-head with beach resorts and golf resorts ... then they will have to be more like these places. To the purists, such places are for out-of-shape, conformist people, while ski areas have always been the province of athletic, free-spirited, adventurous sorts.'

Gillett, in developing a strategic growth plan for Booth Creek, had to decide which route to take. Seeing the future of skiing being more tied to general recreation than the sport itself, Gillett's company, when acquiring property, chose to focus not only on the quality of slopes, but the development of real estate, golf courses, and swimming pools as well. The advantages to such a plan were many: Booth Creek's locations attracted serious skiers and novices alike, and, with the development of other amenities, the company's resorts could advertise themselves as multi-seasonal retreats.

1996--99: The Rapid Expansion of Booth Creek

By 1996 Gillett had raised over $162 million, all of which was intended to go towards acquisitions for Booth Creek. Never one to go about things prudently, Gillett began a buying spree of resorts the magnitude of which could only be accomplished by a company with a great deal of capital and connections. Once it had the financial backing, Gillett's company purchased eight resorts nationwide in less than a year, beginning in September 1996. All of the resorts purchased matched Booth Creek's strategy of finding areas close to large metropolitan cities which could supply day tripping and weekend skiers. While none of Booth Creek's purchases were of the same high profile as Vail, they were all mid-sized and had a great deal of growth potential, both in relation to slopes and housing.

In September 1996 Booth Creek purchased the Mount Cranmore ski resort, located in the northern part of New Hampshire. Mount Cranmore was a popular destination, attracting over 100,000 skiers annually, and was located not far from the Boston area. In that same month, Booth Creek bought New Hampshire's Waterville Valley resort. Both Mount Cranmore and Waterville Valley had previously been owned by Les Otten, CEO of American Skiing Company, one of Booth Creek's main competitors.

Only one week after purchasing the East Coast resorts, Booth Creek acquired a cluster of resorts from Fibreboard Corporation, a company which usually specialized not in resort operations but the production of industrial insulation. Through Fibreboard, Booth Creek became the owner of Northstar-at-Tahoe and Sierra-at-Tahoe (both of which were a half day's drive from San Francisco) and Bear Mountain, located in Southern California. Booth Creek paid about $127 million for the resorts, a price considered by many in the industry to be inflated. Still, these acquisitions were quite a boon for the young company; Tahoe had an international reputation as one of the most desirable skiing destinations in the country, while Bear Mountain was located only a few hours from both Los Angeles and San Diego, two cities in which thousands of skiers resided.

In 1997, Booth Creek continued its rapid pace, purchasing four peaks near the Seattle area: Alpental, Summit East, Summit West, and Summit Central. Called simply the Summit, the resort was one of Washington's largest and was located less than an hour's drive from Seattle. Later that year Booth Creek bought the fashionable Grand Targhee, located near the Grand Tetons and Jackson Hole, Wyoming. Known for receiving one of the highest averages of annual snowfalls in the country, Grand Targhee was also a popular summer destination, a reputation Booth Creek expanded with further development of multi-seasonal housing and activities.

Within one year Gillett's company had risen to international prominence, becoming by 1997 the fourth largest ski resort in North America. Although prevented by a no-compete clause in his personal bankruptcy filing from purchasing resorts in the state of Colorado until 1999, Gillett kept Booth Creek's headquarters in Vail and was able from that location to keep a watchful eye on skiing trends and the company's competition. That the company did so was important, as the industry in the mid- to late 1990s was facing a slow-down in revenue, even as its investors poured more

1988:George Gillett purchases Vail Associates.

1991:Gillett declares personal bankruptcy and has to give up Vail.

1996:Booth Creek is founded when Gillett regroups.

1997:Booth Creek acquires eight resort properties in the span of one year, becoming the fourth largest ski resort in the country.

and more capital into slope improvements, speedier lifts, and more efficient equipment. Moreover, the competition, to say the least, was stiff. By 1997, according to Time, Booth Creek and three other, more powerful competitors controlled over 30 percent of the nation's 500 hundred or so resorts.

With huge companies controlling most of Booth Creek's competition, and the nationwide scattering of Booth Creek's properties, it became important for the company to find a way in which to increase customer loyalty. To that end, the company introduced two programs by which a customer could receive discounts, free lift tickets, and other specialized treatment at any of the company's locations nationwide: the 'Vertical Value' program was honored at all of the company's resorts, while the 'Vertical Plus' system, available at Northstar, Sierra, and Bear Mountain, gave members their own lift lines and enabled them to automatically charge food, drinks, and clothing to their accounts at any of the three resorts. 'Vertical Value' and 'Vertical Plus' were both examples of the way in which Booth Creek supported the notion that with customer service, combined with quality slopes, came customer loyalty. Encouraging such loyalty was important for the young company, as Booth Creek's locations were spread across the country, and, in many cases, were located near other resorts which were just as well, if not better, known.

Despite Booth Creek's phenomenal and rapid rise in the ski industry, there were some insiders who questioned the longevity of the company. During the 1980s Gillett, with his involvement in incongruous, risky ventures, had earned a reputation in the resort industry as a businessman obsessed with buying, spending, and selling. One industry expert, who in a 1997 interview with the Denver Post remained anonymous, questioned Gillett's ability to maintain a stable business, especially one which had grown so fast: 'Why is he (Gillett) buying those ski resorts? Because they're for sale. George can't stop himself if the money is available. He's a born gambler. George will die doubling-down on something.'

However, despite--or perhaps because of--Gillett's reputation for risk-taking, there were also many in the industry who recognized Gillett, and Booth Creek, as a boon to the industry. Industry executive Stacy Gardner, in the same Denver Post article, claimed that the company's growth plan, which centered around popularizing mid-sized resorts, was 'critical to the success of the ski industry.' Certainly the company's sales near the end of the decade buoyed that sentiment; in 1998 Booth Creek brought in over $104 million.

Principal Competitors: American Skiing Company; Intrawest Corp.; Vail Resorts, Inc.

Further Reading:

• Carlson, Lee, 'Skiing Crossroads,' Skiing, September 1997, p. 116.
• 'Fibreboard to Sell Resort Group,' Business Wire, September 10, 1996.
• Parker, Penny, 'Gillett Buys Another One,' Denver Post, December 31, 1996, p. C1.
• ------, 'Sky High Comeback,' Denver Post, February 23, 1997, p. I1.
• Saporito, Bill, 'King of the Hill: After an Epic Wipeout, Ski Mogul George Gillett Tackles the Slopes Again,' Time, December 29, 1997, p. 114.
• Stern, Richard L. 'Bailing Out Vail,' Forbes, May 27, 1991, p. 16.
• ------, 'Crying All the Way to the Bank,' Forbes, September 14, 1992, p. 24.

Source: International Directory of Company Histories, Vol. 31. St. James Press, 2000.

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