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Eight Burning Questions For GP/Lutsen Management

What is going on Midwest skiers and riders, Matthew Zabransky with, and by now, you should be well aware of the news that broke last month that the Skinner family, the owners of Granite Peak and Lutsen, will be acquiring two UP ski areas - Blackjack and Indianhead. So naturally, the questions began circulating, and the rumor mill started spinning up faster than a Hyland Rope Tow. That said, I wanted to send some of my immediate questions to management regarding the future of these resorts.

All of these questions were sent over to Greg Fisher, Granite Peaks GM, who is managing all communication regarding the acquisition. They were answered by Greg and Charlotte Skinner - the Vice President of Finance and Resource Management. But without future ado, let's break down those questions and answers.

Question One - This one is a little silly, but I wanted to squash this rumor right away - Can you confirm that the resorts will not be closed down?

Yes, we plan to operate the two ski areas without a doubt.

Question two - I've been quoted as saying just a few weeks ago that "GP has been the ultimate UP killer" funny how that has worked out - but why did you guys choose to take on this project when Granite and Lutsen are in such great shape?

I can tell you that the opportunity to have a trio of the largest ski properties across the upper Midwest is a wonderful portfolio to own. The Skinner's are proven operators and have developed both Lutsen and Granite into destinations that were small in size to a grand scale. I have no doubt that we will see investment into these properties to enhance value to visitors not only on the slopes but in the amenities they will see in the future. Lutsen and Granite are in great shape, yes. We value reinvestment of capital into our resorts to continuously be able to meet the needs of our guests and remain competitive in a market that's been driven by consolidation.

This project provided an opportunity to protect our existing properties from the stronger competition with deeper pockets that could make the transformation that we are hoping to achieve with Big Snow Resort. The former owners have done a great job operating BSR, building out a strong team, and focusing on internal culture to get where they are today. We hope to carry that torch forward and focus on reinvestment of capital to get the infrastructure, lifts, and equipment up to the level our guests expect at both Lutsen and Granite. In our experience, looking for smart, strategic, and sensible opportunities for growth has been an important part of the success at our other resorts, and that is how we ended up with our decision to acquire BSR.

Question number three, was this a type of alternative to the proposed Granite Peak expansion?

Not in the slightest. We are still actively working with the DNR and the local community on the Master Plan of the Rib Mountain State Park on which Granite Peak sits. The DNR just came out with more public input on some of the non-ski activities outlined in the report that first came out a year ago.

Question four, what is the outlook for how long this transformation can take? This seems like a long-term investment that could take decades to develop fully.

I think you'll start to see immediate impacts but all transformations take time. First and foremost, we wish to support the team in the UP the best we can to help them deliver superior service and operations. The sale hasn't even closed yet, and we are already working towards that.

There is no timeline we can share at this time, but our intention is to invest as much as possible in a way that makes sense for the business. As we get to know the business and figure out priorities, you will start to see those downstream impacts to the guests that you're asking about.

Question five, what changes can skiers/riders expect for the upcoming season? Will we see any improvements?

It will take some time for us to do things right. Skiers will start to see improvements in how their experience resonates with Lutsen and Granite. The team at BSR has done a great job, and we will be looking to them to understand what could be improved and what works well.

From there, we will be spending time prioritizing what should get done in the first season and what we should take a few months to prepare for and launch in the following season. There will likely be only a few months between when the transaction closes and the start of ski season. However, we are already looking for opportunities for improvement in impactful areas like guest flow, snow surfaces, and building improvements.

The nice thing about Big Snow and the land up there is that it is all privately owned, unlike Granite Peak (which sits on DNR Park Land) and Lutsen (which sits on US Forest Service Land), which both have lease agreements/special use permits in place.

Question six, have you discussed adding these resorts to the Indy Pass?

This is still to be determined, but it has been a topic we've seen across social media.

Question seven, As you guys look to improve the resort, are you considering the history/vibe/culture that the UP currently has?

Absolutely. Part of what attracted us to this location is the culture and history of the UP. BSR is surrounded by a unique community that we hope to learn about and embrace as part of what makes BSR special. Also, we feel the culture and history of BSR fits well into those of our other resorts. Lutsen is surrounded by the vibrant art and music culture of Cook County and has an Olympic legacy dating back to its founding. Granite is rooted in the rich history of a community that was enamored and inspired to bring skiing to the Central Wisconsin area. We look forward to having the opportunity to tell the story of the community that surrounds BSR and believe it is a wonderful fit for our family-first brands.

Question eight, It seems evident that ticket prices will likely increase, but are you looking to keep these resorts more affordable than your other resorts?

With any investment or acquisition, at least in my career, you look at your competitive set and the amenities you offer. Charles certainly is looking at some major capital, as outlined in the press release of upgrades in lifts, snowmaking, and facilities, but that will come over time. The entire country is undergoing a level of inflation unseen for quite some time. As energy, COGs, and more increase, unfortunately, so will the price to the consumer. It is a necessity for a business to stay profitable, but from my tenure working with Charles and Charlotte, it is evident that the Skinners put the money right back into the ski operations and infrastructure of their resorts. I'm really, really happy to see that at Granite, and I know that it will certainly be welcomed at the properties in the UP.

Final Thoughts: Will We See More Consolidation Across the Midwest?

Eight questions and eight answers. There wasn't anything too shocking here, especially with how early they are in this process. I think the thing that surprised me the most was the mention of consolidation. In my other video, I mentioned I thought it played a factor, but it's interesting to see it discussed directly here.

Consolidation in the ski industry is certainly nothing new. I mean, we have seen it from Vail for over 20 years. But it is interesting to see smaller Midwest resorts start the process themselves to protect and solidify their operation from bigger conglomerates.

It does beg the question… is this just the start? Could we see even more consolidation from players like Boyn USA, Wisconsin Resorts. Inc., Rick Schmitz, or maybe another medium-sized Midwest hill? Looking at the trend, this looks like it could be the future, but only time will tell.

What do you guys think? Will we see even more consolidation among our Midwest hills in the coming years?

But until next time, I hope all of you have a great week, pray for snow, and I'll see you out there!

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