$9.1 Million to update Belleayre's Discovery Lodge

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$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.
Z Z
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Re: $9.1 Million to update Belleayre's Discovery Lodge

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?
if You French Fry when you should Pizza you are going to have a bad time
tjf1967 tjf1967
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Re: $9.1 Million to update Belleayre's Discovery Lodge

IDK elon musk?

I laughed.
PeeTex PeeTex
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Re: $9.1 Million to update Belleayre's Discovery Lodge

Belleayre - if you build it they still won’t come.
Don't ski the trees, ski the spaces between the trees.
Benny Profane Benny Profane
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Re: $9.1 Million to update Belleayre's Discovery Lodge

In reply to this post by Z
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.?
funny like a clown
Benny Profane Benny Profane
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Re: $9.1 Million to update Belleayre's Discovery Lodge

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.
funny like a clown
x10003q x10003q
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Re: $9.1 Million to update Belleayre's Discovery Lodge

In reply to this post by Z
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.



Z Z
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Re: $9.1 Million to update Belleayre's Discovery Lodge

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
if You French Fry when you should Pizza you are going to have a bad time
timbly timbly
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Re: $9.1 Million to update Belleayre's Discovery Lodge

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...
Z Z
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Re: $9.1 Million to update Belleayre's Discovery Lodge

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.
if You French Fry when you should Pizza you are going to have a bad time
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