Big Sky Resort Still Growing Up

By Guest Writer, 9-02-09

	Caption: Lift maintenance workers Joe Bertucci and Laurel Blessley check towers as they ride down the liftline of Big Sky Resort. Click here or on any of the images to open Daniel Doherty's full gallery of photos from the resort.

Ever since TV newsman Chet Huntley created it almost forty years ago, Big Sky Resort has been something of an anomaly in the ski industry. Unlike Aspen or Telluride or Crested Butte or Park City, there is no old mining town to anchor the development and give it historic resonance and flair. Unlike Vail or Squaw Valley or the big resorts of the east, there is no big metropolis a few hours away.

But unlike old-line Montana community ski areas such as Bridger Bowl or Snowbowl or Lost Trail, Big Sky has big terrain and big aspirations, and with next-door Moonlight Basin, it now markets itself as “The Biggest Skiing in America.”

With the economy in a deep funk, though, Big Sky Resort also faces big challenges – and how it addresses them will help determine whether Big Sky as a whole becomes a fixture among elite destination resorts, or just an out-of-the-way oddity with good powder and a lot of fancy second homes.

“Big Sky’s remote location actually creates several components critical to creating ‘the Biggest Skiing in America,’ “ says Big Sky Resort general manager Taylor Middleton, summing up the resort’s strengths. “It’s not much fun skiing elbow to elbow with 15,000 others on a busy day in Colorado or California. We have over 5,500 acres of skiing, and 22 lifts -- more than most of the largest resorts -- and fewer than 400,000 annual skier visits.”

	A visitor launches himself headfirst down a pile of snow near the base of the resort. Photo by Daniel Doherty.

That assessment of Big Sky Resort's merits is echoed by many ski industry experts.

“I think it is very underrated,” says Powder Magazine senior editor Matt Hansen says. “I don’t think most people understand how big it is. On a powder day, the skiing is as good as anywhere in the country.”

“Big Sky is the best mountain I’ve ever been to,” adds Brock Schimbeno, an avid skier who resides in Bozeman and has skied all over the Rockies. His descriptor of choice: “Steep and deep.”

The skiing was good even in the early days. Huntley, eager to create an economic engine for his home state that didn’t involve mining or logging, picked the place for its terrain and heavy snowfall.

But it was the opening of the tram to the top of the mountain in 1995 that vaulted Big Sky into another league. It opened up a vast area of intense, treeless skiing, and pushed Big Sky Resort past Jackson Hole to become the place with the most vertical drop in the United States.

A trip up its main chair ride in the summer shows Lone Mountain peak jutting out from a forested surrounding. It looks more like something you would climb with axes and crampons rather than actually ski down.

When Moonlight Basin opened on the other side of Lone Peak in 2004, the two resorts initially went to war (and even allegedly fired avalanche cannons at one another). But a peace treaty in 2006 allowed skiers to use both areas on a single ticket, and expert skiers now have not only the tram, but also the frightening chutes on Moonlight’s Headwaters face to keep them interested. And together the two resorts boast the most skiable terrain in the country.

“The terrain now has a great reputation with excellent terrain and lots of expert options,” says Craig Dostie, senior editor at Backcountry Magazine.

“The Lone Peak Tram was the single most significant event that propelled Big Sky onto the national and international stage,” says Stephen Kircher, president of Big Sky Resort. “It was bold and our industry’s equivalent of going to the Moon.”

Yet if the quality of the skiing on Lone Peak is not in dispute, the same can’t be said for other aspects of Big Sky Resort’s development. Huntley died very shortly after the resort opened, and his financial backers, including Chrysler Corp., quickly lost faith. The property was soon sold to Boyne Resorts of Michigan, a family company that has bootstrapped the development of Big Sky ever since.

	The Bambu bar is one of several independently owned businesses that operate at the resort. Photo by Daniel Doherty.

The Mountain Village, comprised of shopping, coffee shops, restaurants and lodging, illustrates the problem of limited capital. Much of the center is made up of pleasant looking structures, including several brand-new buildings, but the architecture is schizophrenic. Styles vary sharply from building to building. New hotels with a suburban look sit next to log cabins and ripened old structures such as Huntley Lodge and the fraying Mountain Mall.

“Big Sky is trying to create a village atmosphere, but it seems the development pattern may not be the best,” Hansen says. “I don’t think they have the money, but they’re trying.”

Boyne and its owners, the Kircher family (who operate a dozen mid-size resorts around the country), have long been a punching bag for many Big Sky locals, who criticize slapdash development, low wages, and the sometimes-imperious ways of a company that for many years ran what amounted to a company town. The Big Sky Owners Association was long the closest thing the community had to a government, and huge problems with the sewer system all but shut down development for a time in the 1980s.

Big Sky, the Southwest Montana community that is itself a symbol of the challenges and opportunities of the New West, is growing up, even as its economy teeters. This story is part of a series about Big Sky produced by students from the University of Montana School of Journalism in collaboration with NewWest.Net. Click on the headlines below to catch up with the other parts of the series. Of Myth and Money at the Yellowstone Club New High School a Triumph for Big Sky Voices of Big Sky: Residents Discuss Their Unique Community Scientists See Landslide Risk in Big Sky Big Sky Pushes Limits of Do-It-Yourself Government Everlands Meltdown Leaves Montana’s Lone Mountain Ranch in Limbo Big Sky, Past and Future, an Overview

As Big Sky has grown, though, some of that friction has abated. Many of the Resort’s senior managers, including Middleton, worked their way up through the company, and big new projects such as Moonlight and the Yellowstone Club have made Big Sky much less dependent on Big Sky Resort. The pay-as-you-go approach to development, and the reliance on skiing for revenue rather than real estate, also looks like a much smarter strategy than it did a few years ago.

Yet Boyne last year also did a large financing deal and took on debt. In the fall the Resort announced a $74 million deal with CNL Lifestyle Properties, a Florida-based real estate investment trust that has long been a close partner of the family. The transaction was originally structured as loan with an option under which CNL would buy the property and lease it back to Boyne, but now, Kircher says, the deal has been renegotiated into a straight $68 million loan to be paid off in three years.

While neighboring resorts have counted on real estate sales to pay the bills – and are in deep distress as a result – Big Sky still relies mostly on vacationers (though it’s also ramping up its real estate sales efforts). But skier visits were down 8% last winter and revenues were down almost 10% in the face of the bad economy. And industry-wide trends are in favor of regional resorts that are driving distance from major cities.

Kircher says he’s not worried: “Certainly, the recent trend of skiers frequenting regional drive-to destinations is concerning for destinations like Big Sky. However we see this as a temporary scenario and the Rocky Mountain destinations will swing back into favor when the economy improves.”

Aside from the economic issues affecting the entire industry, Big Sky has some special challenges. It needs to facilitate air travel to keep the rooms full and sell the lift tickets. It needs to build up the summer business to create a true year-round resort. And it needs to find the funds to continue developing the base area into something more fitting for a world-class ski mountain; renewed efforts at selling real estate are not likely to pay many bills for a while.

Air travel is where Big Sky focuses much of its marketing dollars. To draw families from the big cities of the East and Midwest, Big Sky has established partnerships with the airlines that serve Bozeman, offering to guarantee of a certain number of passengers per year. If the numbers end up short of the guaranteed rate, the resort covers the difference.

	High-end real estate sales, including those at Big Sky Resort, have been hit hard by the collapse of the national housing market. Photo by Daniel Doherty.

“We picked cities like Chicago, St. Louis, Detroit, Atlanta, and others, then we marketed those areas,” says Dax Schieffer, the Resort’s director of public relations and partner resort marketing. “We came up with niche packages that fit different cities.”

“It is a great story of partnership,” Schieffer continued. “We had so much success in Chicago that the Bozeman airport, combined with non-skiing traffic, chose to make the Chicago flight a standard, daily flight.”

Once, there were only flights from four cities that flew into Bozeman regularly; now there are flights from 11. Big Sky’s deals with the airlines contributed to all seven additional flights, Schieffer says. These flights are inherently critical to Big Sky’s success.

“Without reasonable air travel, Big Sky is not sustainable,” Schieffer said.

Creating a viable summer business is also crucial to the resort’s long-term prosperity. With stunning scenery and countless outdoor activities, Big Sky seems to have obvious potential as a summer destination, though the high altitude and unpredictable weather during the spring and fall “shoulder season” make it a challenge to be true “four season” resort.

“The key to a successful summer season is not necessarily profit, but rather enough revenue to maintain a year-round operation that allows us to recruit and maintain professional managers,” Schieffer says.

Mountain biking, golfing, hiking, riding the lifts, and Frisbee golfing are some of the options for summer visitors. A new activity this year is zip lining, where people traverse down a cable by holding on to a pulley.

	Big Sky's third and final zipline runs in front of Mt. Wilson. Photo by Daniel Doherty.

Big Sky’s close proximity to Yellowstone National Park is also used to market to the camper and RV crowd.

“We (Big Sky) can be a base to Yellowstone. A family can do a day trip to Yellowstone, then come back and hang around the resort,” said Schieffer. Conferences and company outings have also been a fixture at Big Sky since the Yellowstone Conference Center opened in 1990.

Yet with all that, summer still accounts for just 20% of Big Sky’s business, and the summer numbers are way down this year despite new offerings like the zip line. There are, after all, a lot of choices for summer recreation in Montana.

The base area and related off-mountain development are perhaps the biggest challenge. Resorts like Crested Butte, Breckenridge or Park City, to name just a few, were cultivated around old mining towns with their own past organization and structure.

At bigger, big-money resorts like Vail or Deer Valley, the blueprint was basically conceived upon creation. Vail was formed with a medieval European town as its model, and development has followed its initial plan. Big Sky, by contrast, was created from a string of ranches and forest land. Real estate development projects were essentially used as fundraisers to support capital investment in the ski mountain, namely new lifts. Consequently there is little unity to the feel or architectural approach.

The resort has always been constructed with “prudence” in mind, says Schieffer. “It feels a big spotty. You can’t make everything look similar.”

Major new investments in the base area are not likely in the current economic climate. There is also the looming question of what will happen to Moonlight Basin, which said earlier this summer that lender Lehman Bros. would be foreclosing on the property. The outcome of that situation remains very uncertain; Big Sky could end up operating the Moonlight ski area, at least in the short term, but whatever the long-term resolution is could have a big impact on Big Sky and the Biggest Skiing in America.

Big Sky Resort’s biggest assets, in the end, are the same ones they have always been: an outstanding ski mountain, and the charms of Montana. When it comes to weathering a brutal economy, that's a pretty good place to start.

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