A year ago, when real estate agent Michelle Diehl sold a three-bedroom condo near the mountain town of Steamboat Springs, Colo., for $295,000 (U.S.), the property had been on the market for only six days, and the buyers were so eager that they put up the money for the place sight unseen.
It's not so easy selling real estate in Steamboat Springs any more. Now, Ms. Diehl is trying to sell a similar condo that's in better shape, and is listed at a lower price - but has been sitting on the market for months.
"It's a different time," she says.
For Intrawest ULC, which set off the real estate frenzy when it bought the Steamboat Springs ski resort in late 2006, the swift and radical reversal is hitting hard.
As recession grips North America, consumers have little confidence in the economy and are slashing spending. Plans for fancy ski trips costing thousands of dollars to destinations such as Steamboat in Colorado or Intrawest's Whistler-Blackcomb in British Columbia are among the first luxuries to get axed - never mind buying real estate there.
So, instead of expanding Steamboat Springs in the model of Whistler to better compete with glitzy Colorado rivals Aspen and Vail, the Vancouver-based resort developer and operator and is playing a defensive game instead.
The difficult business outlook pushed talks to refinance $1.7-billion of Intrawest debt to just hours before the money came due on Oct. 23, with Intrawest owner Fortress Investment Group LLC scrambling to get the deal done.
The debt was taken on in 2006 when Fortress bought Intrawest for $1.8-billion in a highly leveraged buyout, using a two-year term loan at 6.4 per cent to finance the takeover.
Details of the refinancing were not released but Intrawest's debt had been yielding 9 per cent in the market.
Negative after negative is piling on Intrawest. Interest payments are up. Visits to ski areas this winter are set to fall. Resort real estate is moribund.
Intrawest owns 10 winter resorts in North America and one golf resort, places where it also has real estate. It has broader real estate operations in locales such as Hawaii and California's Napa Valley through its Playground Destination Properties Inc. arm. Finally, Intrawest owns boutique travel businesses, including Canadian Mountain Holidays Inc., the world's No. 1 helicopter-skiing operation.
In all areas, Intrawest is feeling stress, from its heli-ski business, where a single trip starts at $975 (Canadian) per day, to Whistler, where the local tourism office predicts the number of visitors this winter to town will slump to about 900,000 from roughly one million a year ago.
The company, and other businesses in Whistler, have reacted quickly. Intrawest, for Whistler and other domestic properties, immediately sought to capitalize on the plunging Canadian dollar, marketing more in the U.S., in Washington State for Whistler and New York State for Mont Tremblant, located north of Montreal.
At Whistler, the company is heavily marketing next month's opening of an ambitious and eye-catching $52-million gondola that connects mid-mountain hubs on Blackcomb and Whistler, crossing the valley between the two mountains.
Intrawest is also playing up cheaper airfares, offering bigger discounts for booking early and pressing its long-time visitors not to skip regular winter trips.
"Even in these challenging times, they're not taking that trip to Whistler or Mont Tremblant off their list," said Andy Wirth, chief marketing officer at Intrawest.
Skiers may still come to ski but real estate is in trouble across Intrawest's portfolio and the focus is filling up rooms with vacationers rather than selling new properties.
In Destin in northwest Florida, Intrawest has a beach and golf resort called Sandestin. Susie Kirkland, who has been a realtor for almost 40 years in the region, said she has never seen such a difficult market.
"We have no shortage of properties," said Ms. Kirkland of Re/Max Southern Realty.
