Historical perspective holds true today
By Karen D. Lorentz
In a July 2008 interview, Powdr Corp CEO John D. Cumming shared his story and philosophy of skiing. He spoke simply and directly as he discussed his love of skiing and mountaineering, expressing an all-encompassing appreciation of the outdoors. He was as at ease and eloquent in describing the value of the ski experience as Pres Smith had been 20-some years earlier in that same office. In another way, he sounded like a wise Joe Sargent with his “slow and steady wins the race” description of how he would proceed.
Having written in recent months about what happened out at Park City and having revisited this 2008 interview with Cumming, I thought the information would be of interest to readers who have wondered about Powdr and Killington in particular. What follows is from the Killington book published in 2009 (with a few updates).
On John Cumming
John Cumming (now 47) was born in Kansas but raised in Tarrytown, N.Y., until age four when the family moved to Utah. His father taught him to ski there and took him up Grand Teton when he was 11.
“Those were special times imprinted with the adoration of family values you learn in winter in the mountains,” he said of the relationships established with nature and the family during those formative years. They were the values that attracted him to skiing and the values, which he still feels, “our sport is all about.”
Cumming received his high school education at Kent School, an independent boarding school in Kent, Conn. He “ski raced a little” at the University of Colorado and became a climber and guided mountain expeditions both during and after college, guiding professionally from 1988 to 1993.
With a small group of outdoor industry veterans, Cumming founded Mountain Hardware in 1993. The company produced high-end outdoor equipment, apparel and accessories for mountaineering, climbing, backpacking and snowsports. It has since been sold to Columbia Sportswear Company.
In 1993 Powdr Corp was formed by John, brother David, and their father Ian Cumming (then chairman of Leucadia National) with help from Nick Badami. The private company was formed to acquire Park City Ski Area and Alpine Meadows, which were owned by Badami. During the year’s acquisition process, Badami became both “a mentor and a partner,” Cumming said.
“I learned the ski business from him. He was 72 and ready to retire but was still willing to teach a kid the business. He even put a ‘partner’s desk’ in the office.
“When he found out that I was a climber, he thought that would help me; he saw mountaineers as clear thinkers… He was a most astonishing human being in his strength and character. He thought clearly in difficult situations and was loyal, wonderful and warm… without him, the industry and I wouldn’t be where we are today.”
In 1994, Powdr Corp acquired the two areas, with Badami holding a minority interest and serving as Powdr chairman for several years.
In 1996, Powdr purchased Boreal and Soda Springs, two smaller ski areas in Donner Summit, Calif., near Lake Tahoe. In 1997, John Cumming became CEO of Powdr and chairman in 2000.
In 2001, Powdr acquired Mount Bachelor near Bend, Ore.
In 2002, Park City Mountain Resort hosted the Olympic Alpine giant slalom, snowboarding halfpipe, and snowboarding dual giant slalom competitions.
In 2003, Powdr purchased the Las Vegas Ski and Snowboard Resort, located at Spring Mountain about 40 minutes from the Strip.
In 2007, affiliates of SP Land and affiliates of Powdr acquired Killington and Pico, with Powdr to become the majority owner and operator of the ski areas. (SP Land Company was created in 2004 to acquire many land parcels in a collateral swap/work out of part of ASC debt and is overseeing the addition of Killington Village).
In 2010, Powdr acquired Copper Mountain in Colorado.
Powdr also purchased Woodward Action Sport Camp (in Pennsylvania) and expanded the camps to four US locations. Powdr also acquired an interest in RSN (Resort Sports Network), now Outside Television, the only national programming network dedicated to the active outside lifestyle.
In 2013, Powdr Enterprises, a sports marketing and entertainment division, was launched.
Most recently, on Sept. 11, 2014, Cumming signed a deal to sell PCMR to Vail Resorts. (See mountaintimes.info/pcmr-sold-to-vail-resorts/)
Powdr Corp has four divisions: Powdr Resorts, which includes seven ski areas and Gorgoza Park, a lift-served tubing park in Park City; Woodward Action Sports Camps; Outside Television; and Powdr Enterprises.
Cumming on Killington
About seven years ago, Cumming first learned about Killington being liquidated through a director on Powdr’s board, who also was on the board of E2M. Immediately interested, Cumming was introduced to Paul Rowsey, (then) chairman of E2M who joined Powdr’s board. (SP Land is a subsidiary of E2M.)
Acknowledging a very competitive environment in the Northeast, Cumming said he was attracted to Killington for the physical mountain — its vertical drop, variety of terrain, and fall-line skiing and cited those traits at Pico as well. He added that Killington should be viewed as one of the top ten resorts in the country and is an exceptional mountain. But he also “saw Killington as broken and sold Alpine Meadows to fix it and make it more successful.”
“We loved Alpine Meadows. It was sad to sell the first resort Nick had acquired, but the balance sheet needed to fit in Killington and Pico. It was also important not to have two weather-variable areas,” Cumming explained, noting the volatility that could have resulted. “We recognized that it would be expensive to operate Killington and Pico due to the deferred maintenance… We wanted to be sure we would be able to do that.”
Noting the significant costs for improvements such as $6 million for a new lift, $10 million to build a new restaurant, and the huge costs of snowmaking, Cumming said it is necessary for the ski area to be profitable to be able to invest in such upgrades.
“The challenge is to find a way to get mid-week business to what it needs to be,” he added, noting the “under-utilization of the areas at times like a mid-week Wednesday in January and the need for places for people to stay and the assets that a village at the mountain can bring.” It was one of the reasons Powdr had invested with SP Land Company, he added.
Philosophy and vision
Cumming observed, “Skier visits alone don’t drive the success of a ski business. I learned from Nick that skier visits don’t pay the payroll and that there are profit centers other than lift ticket sales.” He emphasized the importance of “yield, execution, and judicious resource allocation” as paramount to success.
“The ski business caters to people who come to experience the mountains with their families and to enjoy the freedom of the sport. Our job is to facilitate their experience. If we do our job right, innovate, and invest in an effort to share this mountain with more and more people, we can be successful.
“You have to check your work along the way or you can’t survive a few years bad weather. If we execute judiciously, we can slowly polish the stone back to its luster. It takes discipline.
“We can promote our way into the future or we can operate our way into the future.
“Today, the latter is most important. In ten years, there will be a dramatically improved product, and we will slowly and methodically proceed to make Killington shine. We’ll be here a long time.
“The product we sell allows family and friends to experience freedom in wintertime. No other activity comes close to providing such powerful experiences. You can have four generations spending time together — younger family members can be the best practitioners and in charge with access to thousands of acres of forest and under the simple instruction ‘meet me for lunch.’
“All these things — the ski experience, the wonderful growth dynamic for adults and kids, and the joy for adults to watch their kids grow and get better — we celebrate that and perpetuate that, and we do that by slowly improving the product and sharing that product.
“As stewards of the company, we set a point on the horizon we can slowly attain — the tortoise wins the race.
“We have to be patient. I would like to be sitting here at age 82 in this office — well, hopefully a new office here by then.
“We have a different value system in Powdr. We want to master our art, but there’s a moving target, things shift — trends, demographics, markets. We want our machine to be as well lubricated as can be, but there are subjective measures. My job, and Herwig’s (former COO for Powdr Resorts; Chris Nyberg is now COO and President of Powdr Resorts and Herwig Demschar heads another division) is to master Killington; we’re trying to get there — this task is approached with humility.
“The number one goal in our minds is being the best operators in the business. This is not about rankings or biggest. We will never be the biggest resort in the country at Killington. Nor will Powdr be the number one biggest operator.
“This is about mastery. We need to master the art of being the best operators. We’re close at some places, not at others. This is especially challenging with a moving target.”
Today, “nothing has changed in that philosophy” note Cumming and Chris Nyberg, Powdr Resorts President and COO.
However, since that interview, the country entered the Great Recession of 2008 and Killington endured Tropical Storm Irene in 2011. Talk about things shifting!
Still, some $33 million was invested in capital upgrades, with more spent on other improvements, like upgrades at the Grand Hotel (with the help of the owners) and reducing the area’s carbon footprint. (Killington has garnered awards for its green efforts.) Some changes, like the new Skye Peak Express and Peak Lodge, are visible. Others, like replacement of old buried snowmaking pipes, are not. Still, the new energy-efficient snowmaking guns for the monster snowmaking system result in very noticeable changes — skiing when the weather says we should not be able to do so.
Other additions like tubing, yurt dining, snowcat-drawn sledge rides, the Motor Room Bar, the Vista Deck and Umbrella Bars enhanced the resort experience, adding a new measure of fun and added value.
I asked Chris Nyberg, who preceded Mike Solimano as Killington’s president and GM for five years, what he thought looking back. He wrote the following in an email:
“I think we have continued to accomplish much of what we said we would. Well over $30 million in capital investment in seven years, much of which was hidden by dirt and was behind the scenes as there was a lot of deferred maintenance to deal with, not to mention the millions spent in upgrading infrastructure in small non-capital increments. Recent investments in the past two years like replacing the Alpine (sewer) pipeline, peak to K-1 lodge sewer line, Peak Lodge, snowmaking upgrades ($2 million this fall), and increased summer business growth initiatives, like downhill mountain biking, have been significant.
“The recession slowed us all down for a couple years, but we have continued to do what we said we would do — slow, steady improvement polishing the stone. (This was reminiscent of a 2008 interview wherein Nyberg stressed starting with fixing the basics so as to restore the shine to the product and its presentation.)
“The improvements that Mike and his team have brought to the guest experience, as evidenced by their Net Promoter Scores, are significant. The variety of new experiences and the quality of such are to be commended.
“Summer business improvements like zip lines, utilizing Snowshed Pond and ropes courses will bring in more business which is good for ROI — look for summer growth in next few years.”
Regarding the Killington Village, Nyberg said, “The Village will give Killington increased momentum and could be tied with several replacement lifts and perhaps the Interconnect [with Pico Mountain].
“In the meantime,” he noted, “the Killington and Pico teams and the local community should be proud of what has been accomplished over the years up there. John and I are eager to see how Mike and his team continue to evolve our eastern resorts. Summer growth in our industry is on the rise and as a company Powdr Resorts has increased focus in this realm at all our resorts. Counter seasonal cash flow coming from summer growth that adds significantly to the bottom line certainly helps us reinvest in this capital intensive business,” he concluded.