$9.1 Million to update Belleayre's Discovery Lodge

https://www.governor.ny.gov/news/governor-cuomo-announces-new-investments-increase-tourism-catskills-and-hudson-valley-region

"Governor Andrew M. Cuomo today announced $9.1 million to support the expansion and modernization of the Discovery Lodge at Belleayre Mountain Ski Resort. The project will improve resort offerings, helping to increase year-round visitation, enhance the customer experience and maintain Belleayre's status as a catalyst for the tourism industry in the Catskills. "

"Belleayre Ski Resort has generated increased the following year-round visitation and revenue since 2017:

    Winter visits increased 28 percent to 140,815  
    Winter sales revenue from snow sports and activities at the resort increased by over 21 percent to $5.4 million
    2018 summer visitation increased Year-Over-Year by over 10,000 guests"

The typo is in the press release.

Why would a business with sales of $5.4m ever be justified in investing $9.1m on anything.  The payback and roi would be awful.  

And who would loan that business money to do so?

So lets take a deeper dive into this from a financial standpoint

The best in the industry is MTN and look at this graph of their profit margins.  

https://ycharts.com/companies/MTN/profit_margin

Then lets say that The GOV is a brilliant business man and he can use this investment IN A LODGE to drive a 20% increase in business in the winter and breakeven in the summer because it will drive tons of tourists to the Catskills and The Gov knows that skiers really just come for the nice lodges.  We  will also assume that Orda is as good as Vail at making money and has winter profit margins equal to them at 25% and ignore that even Vail losses boat loads of money in the summer.  If all that is true then the $9.1M investment would have a  simple payback period of 33.7 years without using any discounting of future profits.  The Gov can make inflation stand still of course.  In the real world a dollar spent today is worth more than a dollar of profits made over the next 30+ years.   All this is before upkeep and depreciation as well.  

What could possibly go wrong?

IDK elon musk?

I laughed.

Belleayre - if you build it they still won’t come.

Z wrote

Why would a business with sales of $5.4m ever be justified in investing $9.1m on anything.  The payback and roi would be awful.  

And who would loan that business money to do so?

So lets take a deeper dive into this from a financial standpoint

The best in the industry is MTN and look at this graph of their profit margins.  

https://ycharts.com/companies/MTN/profit_margin

Then lets say that The GOV is a brilliant business man and he can use this investment IN A LODGE to drive a 20% increase in business in the winter and breakeven in the summer because it will drive tons of tourists to the Catskills and The Gov knows that skiers really just come for the nice lodges.  We  will also assume that Orda is as good as Vail at making money and has winter profit margins equal to them at 25% and ignore that even Vail losses boat loads of money in the summer.  If all that is true then the $9.1M investment would have a  simple payback period of 33.7 years without using any discounting of future profits.  The Gov can make inflation stand still of course.  In the real world a dollar spent today is worth more than a dollar of profits made over the next 30+ years.   All this is before upkeep and depreciation as well.  

What could possibly go wrong?

That he doesn't get re elected after spending this stupid money.?

I just read this this morning.  https://www.theverge.com/2018/10/29/18027032/foxconn-wisconsin-plant-jobs-deal-subsidy-governor-scott-walker. Kinda puts things in perspective. Say what you will about Cuomo, but, he's hardly as stupid and venal as Scott Walker. And, at least the money is going into a ski hill. An awful ski hill, but, a ski hill, all the same.

Z wrote

Why would a business with sales of $5.4m ever be justified in investing $9.1m on anything.  The payback and roi would be awful.  

And who would loan that business money to do so?

So lets take a deeper dive into this from a financial standpoint

The best in the industry is MTN and look at this graph of their profit margins.  

https://ycharts.com/companies/MTN/profit_margin

Then lets say that The GOV is a brilliant business man and he can use this investment IN A LODGE to drive a 20% increase in business in the winter and breakeven in the summer because it will drive tons of tourists to the Catskills and The Gov knows that skiers really just come for the nice lodges.  We  will also assume that Orda is as good as Vail at making money and has winter profit margins equal to them at 25% and ignore that even Vail losses boat loads of money in the summer.  If all that is true then the $9.1M investment would have a  simple payback period of 33.7 years without using any discounting of future profits.  The Gov can make inflation stand still of course.  In the real world a dollar spent today is worth more than a dollar of profits made over the next 30+ years.   All this is before upkeep and depreciation as well.  

What could possibly go wrong?

Of course, when you build a lodge in 1967 and never update it................
there comes a time when you have to pay the piper. Most for profit businesses don't wait 40 years to update  a major asset. You need to spread that $9.1 million over the last 40 years where all they did was maintenance and minor improvements for very little money.

Do they really need to spend $9.1m?
The sales of this business would say no
The payback is realistcaly never as this is not Vail we are talking about
A real business would spend something more along the lines of $1m

Platty’s lodge is probably about the same age and I don’t see Laz spending 9 mil or even 1mil on a new lodge
If I was Laz I would be spitting nails mad right about this

Man, can you believe the state is trying to invest in the Catskills? Wow. How dare they? Next thing you know they'll be throwing money at another mountain range, like say, the Adirondacks. Maybe building some sorta Olympic-level facilities or some other complete waste of money and put all of the local humble rugged individuals out of business? Probably should just leave that sort of investment to the local Hasidic community--they seem to be democracy-minded in the choices they're making in the southern Cats...

Dude
There are no other ski areas in the Daks
Tupper closed a long time ago and while Orda had something to do with it it was more that thier location is very far from the interstate and in the middle of nowhere

WF does not have a 9.1m dollar lodge nor they build one for it as it’s about the skiing not the Fing Lodge but the Gov has not yet figured that out.  If you do go for the lodges Orda has zero chance to compete if you have experienced Stowe, Stratton Okemo, Tremblant and the rest.  That is not and will never be Orda’s market and trying to compete with real estate driven ski areas ability to support lodges that anchor thier real estate is just plain stupidity.

From a tax payers perspective they should not spend a dime on Belleryre until it proves it can be profitable and provide a payback on the investment which it has a terrible history at doing.

x10003q wrote

Z wrote

Why would a business with sales of $5.4m ever be justified in investing $9.1m on anything.  The payback and roi would be awful.  

And who would loan that business money to do so?

So lets take a deeper dive into this from a financial standpoint

The best in the industry is MTN and look at this graph of their profit margins.  

https://ycharts.com/companies/MTN/profit_margin

Then lets say that The GOV is a brilliant business man and he can use this investment IN A LODGE to drive a 20% increase in business in the winter and breakeven in the summer because it will drive tons of tourists to the Catskills and The Gov knows that skiers really just come for the nice lodges.  We  will also assume that Orda is as good as Vail at making money and has winter profit margins equal to them at 25% and ignore that even Vail losses boat loads of money in the summer.  If all that is true then the $9.1M investment would have a  simple payback period of 33.7 years without using any discounting of future profits.  The Gov can make inflation stand still of course.  In the real world a dollar spent today is worth more than a dollar of profits made over the next 30+ years.   All this is before upkeep and depreciation as well.  

What could possibly go wrong?

Of course, when you build a lodge in 1967 and never update it................
there comes a time when you have to pay the piper. Most for profit businesses don't wait 40 years to update  a major asset. You need to spread that $9.1 million over the last 40 years where all they did was maintenance and minor improvements for very little money.

Have you been to Killington lately? The K1 Lodge is stupid old and cramped. I'm pretty sure that if the taxpayers of Vermont were willing, they'd have an awesome Lodge there. But, they're not.

There are no private areas in the adk in part because the state competed in an unfair way. That is what makes private owners ornery.

Benny Profane wrote

x10003q wrote

Z wrote

Why would a business with sales of $5.4m ever be justified in investing $9.1m on anything.  The payback and roi would be awful.  

And who would loan that business money to do so?

So lets take a deeper dive into this from a financial standpoint

The best in the industry is MTN and look at this graph of their profit margins.  

https://ycharts.com/companies/MTN/profit_margin

Then lets say that The GOV is a brilliant business man and he can use this investment IN A LODGE to drive a 20% increase in business in the winter and breakeven in the summer because it will drive tons of tourists to the Catskills and The Gov knows that skiers really just come for the nice lodges.  We  will also assume that Orda is as good as Vail at making money and has winter profit margins equal to them at 25% and ignore that even Vail losses boat loads of money in the summer.  If all that is true then the $9.1M investment would have a  simple payback period of 33.7 years without using any discounting of future profits.  The Gov can make inflation stand still of course.  In the real world a dollar spent today is worth more than a dollar of profits made over the next 30+ years.   All this is before upkeep and depreciation as well.  

What could possibly go wrong?

Of course, when you build a lodge in 1967 and never update it................
there comes a time when you have to pay the piper. Most for profit businesses don't wait 40 years to update  a major asset. You need to spread that $9.1 million over the last 40 years where all they did was maintenance and minor improvements for very little money.

Have you been to Killington lately? The K1 Lodge is stupid old and cramped. I'm pretty sure that if the taxpayers of Vermont were willing, they'd have an awesome Lodge there. But, they're not.

Yes, Killington knows that their customers know that the SNOW IS THE PRODUCT NOT A LODGE! And that is why they blow the amount of snow that they do, and groom they way do!

Harvey wrote

There are no private areas in the adk in part because the state competed in an unfair way. That is what makes private owners ornery.

I agree that was certainly a big contributor.  It happened in a period where the mom and pop areas in general had a dinosaur extinction event.  Which really was about snowmaking, grooming and lift investment.  Orda did invest and they couldn’t so there is connection to this for sure.  Banks probably did not want to loan money to private business competing against the deep pockets of the state.  we should learn from that and not repeat it in the Catskills and I’d bet Laz finds it hard to borrow money.

The lodge arms war is one that Orda has no business participating in as it’s just about image.  For real estate driven base areas that image sells real estate. Orda would be doing it not for any legitimate business reason but instead for an egomaniac Gov who is image driven.  As happen in Buffalo the lodge project will end up being built by whomever donates to the Gov.

I don't think Laz can expand Platty to really drive the Catskills economy (too far from interstate, limited acreage). He's got a niche, and what if turning Belleayre into more of a resort drives more ski-area-preferring people to Platty and away from Belle? It's a gamble, but it's the ski biz in an era of climate change. Meanwhile, a whole lot more NYS taxpayers live closer to Belle than to WF. Catskill region could use an economic boost (like a lot of upstate). I don't think Wilmington/LP would be doing as well without ORDA money (not just WF profits! like you're demanding of Belle). Just saying there's other perspectives.

Harvey wrote

There are no private areas in the adk in part because the state competed in an unfair way. That is what makes private owners ornery.

Exactly.

I know the owners at Greek would love to have a blank checkbook and not be concerned at all about making a profit.

Z wrote

Do they really need to spend $9.1m?

It seems excessive, but, as I said, they have not spent for 40 years. I guess there is no credit for that?

Z wrote

The sales of this business would say no

What about the sales for the last 40 years?

Z wrote

The payback is realistcaly never as this is not Vail we are talking about

Not if they go another 40 years without spending.

Z wrote

A real business would spend something more along the lines of $1m

How often? Every 5-7 years? Every 10 years? Every 40 years?

Z wrote

Platty’s lodge is probably about the same age and I don’t see Laz spending 9 mil or even 1mil on a new lodge
If I was Laz I would be spitting nails mad right about this

This has nothing to do with Laz.

Benny Profane wrote

Have you been to Killington lately? The K1 Lodge is stupid old and cramped. I'm pretty sure that if the taxpayers of Vermont were willing, they'd have an awesome Lodge there. But, they're not.

Killington just spent $5 million on the peak Lodge at the top of Killington Peak.

Didn't Irene reduce some of K1?  

timbly wrote

Probably should just leave that sort of investment to the local Hasidic community--they seem to be democracy-minded in the choices they're making in the southern Cats...

Do the Hasidm ski or ride?
Didn't want to go there, but check this out....
https://www.foxnews.com/us/insular-hasidic-jews-struggle-to-preserve-customs-as-legal-and-social-pressures-build
Fox 3 part series..lots of this crap going on in Jersey, Rockland County, the Catskills, and moving forward, heaven only knows where . Check out the discussion starting at 4:06 of this vid.