Vail buys Crans-Montana in a $136mn deal

Vail Resorts agreed to purchase the Crans-Montana resort in the Swiss Alps for SFr118.5mn (US$136mn). This deal will give Colorado-based Vail Resorts ownership of a legendary European holiday destination.

Crans-Montana, located in the Swiss canton of Valais, is known for its gourmet cuisine, glitzy shopping and golf courses. It also hosts winter sports. It is located in the Swiss canton Valais about 2.5 hours away from Geneva. The city hosts regular downhill skiing races and the Omega European Masters Golf Tournament. In 2025, the Mountain Bike World Championships will be held, followed two years later by the World Ski Championships.

The sale marks the end of CPI Property Group’s ownership of the resort. Radovan Vitek, a billionaire Czech who started building his wealth in the 1990s as Slovakia began privatising assets, is the main shareholder of CPIPG.

The sale comes after a turbulent time for the Swiss resort, marked by clashes with local authorities and Vitek. In the winter of 2018, the ski lifts were left idle when CPIPG refused CPIPG to operate them due to a dispute over payment.
The resort’s reputation for being a reliable Swiss tourist destination was severely damaged by the abrupt closure during the ski season.

Vail announced that it would grow Crans-Montana by focusing on marketing and operations initiatives, such as “capital investment focused on maximising the gastronomy efficiency and improving and extending snow-making capability”.
About 3mn people visit the resort each year. A fifth of them are from France and Italy. Vail estimated that it would generate about SFr5mn before interest, taxes, depreciation, and amortization in the year up to July 2025. The deal should be completed during the 2023-24 skiing season.

Local associations in the Swiss resort want Vail’s assistance to improve preparations for the World Ski Championships in Crans.Bruno Huggler, head of the Crans Tourism Office, said Vail’s global footprint was an “undeniable asset” for the North American market.
This will be Vail’s second acquisition in Europe, after Andermatt-Sedrun was acquired in Switzerland in the year 2022. The acquisition of Crans-Montana adds to an already extensive portfolio, which includes Vail Mountain, Whistler, British Columbia, and three resorts located in Australia.

Vail’s CEO, Kirsten L. Lynch, said that Crans-Montana presents a great growth opportunity, similar to Andermatt-Sedrun.Patrick Scholes, a Truist Securities investment banker who covers lodging, leisure and tourism, says that there are still challenges to overcome when expanding into the European market.

He said that locals sometimes don’t want big corporations to take over their resort. “The challenge is that running a ski resort abroad from a corporate headquarters based in Colorado would not be easy.”
Vail’s New York listed shares fell 0.8 per cent to $213.49, which translates into a market cap of approximately $8.2bn.

Separately CPIPG has come under fire by short seller Muddy Waters, which accused Vitek last week of “brutally looting the business while overstating its assets in a significant way”. Muddy Waters claimed it was betting against CPIPG’s credit.

CPIPG responded by saying that Muddy Waters is “categorically incorrect” in its assessment of the company.
CPIPG announced on Thursday that it sold the Crans Monttana resort for a “significant” premium over the €51mn it had assigned to the business as of the end June.