[Federal Register Volume 61, Number 211 (Wednesday, October 30, 1996)]
[Notices]
[Pages 55995-56060]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26995]
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DEPARTMENT OF JUSTICE
Antitrust Division
Public Comments and Plaintiff's Response; United States of
America v. American Skiing Company and S-K-I Limited
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16 (b)-(h), that Public Comments and
Plaintiff's Response have been filed with the United States District
Court for the District of Columbia in United States v. American Skiing
Company and S-K-I Limited, Civ. Action No. 96-01308.
On June 11, 1996, the United States filed a Complaint seeking to
enjoin a transaction in which American Skiing Company (``ASC'') agreed
to acquire S-K-I Limited (``S-K-I''). ASC and S-K-I are the two largest
owner/operators of ski resorts in New England, and this transaction
would have combined eight of the largest ski resorts in this region.
The Complaint alleged that the proposed acquisition would substantially
lessen competition in providing skiing to eastern New England and Maine
skiers in violation of Section 7 of the Clayton Act, 15 U.S.C. Sec. 18,
and Section 1 of the Sherman Antitrust Act, 15 U.S.C. Sec. 1.
Public comment was invited within the statutory 60-day comment
period. Such comments, and the responses thereto, are hereby published
in the Federal Register and filed with the Court. Brochures, newspaper
clippings and miscellaneous materials appended to the Public Comments
have not been reprinted here, however they may be inspected with copies
of the Complaint, Stipulation, proposed Final Judgment, Competitive
Impact Statement, Public Comments and Plaintiff's Response in Room 3233
of the Antitrust Division, Department of Justice, Tenth Street and
Pennsylvania Avenue, N.W., Washington, D.C. 20530 (telephone: 202-633-
2481) and at the office of the Clerk of the United States District
Court for the District of Columbia, Third Street and Constitution
Avenue, N.W., Washington, D.C. 20001.
Copies of any of these materials may be obtained upon request and
payment of a copying fee.
Constance K. Robinson,
Director of Operations, Antitrust Division.
United States of America, Plaintiff, v. American Skiing Company,
and S-K-I Limited, Defendants.
[Civil Action No.: 96-01308-TPJ]
United States' Response to Public Comments
Pursuant to the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16(b)-(h) )(the ``Tunney Act''), the
United States responds to the public comments received regarding the
proposed Final Judgment in this case.
I. Background
The United States filed a civil antitrust Complaint on June 11,
1996, alleging that the proposed acquisition of the ski resorts of S-K-
I Limited (``S-K-I'') by American Skiing Company (``ASC'') would
violate Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. The Complaint
alleged that ASC and S-K-I were the two largest owner/operators of ski
resorts in New England, and that the proposed transaction would combine
eight of the largest ski resorts in this region. In particular, the
acquisition would substantially increase the concentration among ski
resorts to which eastern New England residents (i.e., those in Maine,
eastern Massachusetts and Connecticut, and Rhode Island) practicably
can go for weekend ski trips, and among those to which Maine residents
practicably can go for day ski trips. As a result, this acquisition
threatened to raise the price of, or reduce discounts for, weekend and
day skiing to consumers living in those areas in violation of Section 7
of the Clayton Act.
At the same time the Complaint was filed, the United States also
filed a proposed settlement that would permit ASC to complete its
acquisition of S-K-I's ski resorts, but also require certain
divestitures that would preserve competition for skiers in eastern New
England and Maine. This settlement consists of a Stipulation and a
proposed Final Judgment.
The proposed Final Judgment orders the parties to sell all of S-K-
I's rights, titles, and interests in the Waterville Valley resort in
Campton, New Hampshire, and all of ASC's rights, titles, and interests
in the Mt. Cranmore resort in North Conway, New Hampshire, to one or
more purchasers who have the capability to compete effectively in the
provision of skiing for eastern New England and Maine skiers at
Waterville Valley and Mt. Cranmore. The Stipulation and proposed Final
Judgment also impose a hold separate agreement that requires defendants
to ensure that, until the divestiture mandated by the proposed Final
Judgment has been accomplished, S-K-I's Waterville Valley and ASC's Mt.
Cranmore operations will be held separate and apart from, and operated
independently of, defendants' other assets and businesses, and be
preserved and maintained as saleable and economically viable, ongoing
concerns, with competitively sensitive business information and
decision-making divorced from that defendants' other ski resorts.
A Competitive Impact Statement (``CIS''), explaining the basis for
the complaint and proposed consent decree in settlement of the suit,
was filed on June 18, 1996, and subsequently published for comment,
along with the Stipulation and proposed Final Judgment, in the Federal
Register on June 28, 1996 (61 FR 33765-33774), as required by the
Tunney Act. The CIS explains in detail the provisions of the proposed
Final Judgment, the nature and purpose of these proceedings, and the
proposed acquisition alleged to be illegal.
The United States, ASC, and S-K-I stipulated that the proposed
Final Judgment may be entered after compliance with the Tunney Act. The
plaintiff and defendants have now, with the exception of publishing the
comments and this response in the Federal Register, completed the
procedures the Tunney Act requires before the proposed Final Judgment
can be entered.\1\ The sixty-day period for public comments expired on
August 27, 1996. As of October 1, 1996, the United States had received
98 comments.
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\1\ The United States plans to publish the comments and this
response promptly in the Federal Register. It will provide the Court
with a certificate of compliance with the requirements of the Tunney
Act and file a motion for entry of final judgment once publication
takes place.
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The comments, which are collected in the Appendix to this
Response,\2\ came from a variety of sources. The most comprehensive
comment was submitted by the Mount Washington Valley Task Force,
chaired by James B. Somerville,
[[Page 55996]]
manager of Town of Conway, New Hampshire (the ``Conway Report''). The
other comments came primarily from individuals such as skiers, property
owners, local business persons, and others. Many of the points made by
individual commentors were spelled out in more detail in the Conway
Report.
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\2\ The comments have been numbered, and a log prepared. For
ease of reference, the United States in this Response refers to
individual comments by the log number assigned to the comment, with
the exception of number 98, which is referred to as the ``Conway
Report.''
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II. Response to Comments
A. Overview
Several comments (3, 67, 75, 76, 97) support the proposed Final
Judgment. In particular they express approval of the provisions that
require the divestiture of the Mt. Cranmore ski resort and related
assets. These commentors note that economies of scale do not
necessarily result in lower prices (76, 97) and that LBO Resort
Enterprises (the predecessor to ASC) raised prices and eliminated
discount voucher programs at Mt. Cranmore after acquiring it. (67, 97)
``LBO only discounts when their competition is discounting and
impacting their skier visits and profit margin.'' (76) One commentor
stated, ``We need more competition, not less competition, in this
area.'' (97) The commentor also noted that the new owners of Mt.
Cranmore would have as much or more interest as LBO in ensuring that
Mr. Cranmore remains a healthy, vigorous competitor and in promoting
the local economy. Id.
The majority of the comments submitted, however, including the
Conway Report, expressed opposition, primarily to the provision of the
proposed Final Judgment requiring divestiture of Mt. Cranmore. These
comments can be arranged in a line of argument as follows:
--the antitrust laws should not apply to skiing;
--the Department misconceived the product markets for day and weekend
skiing;
--the Department misconceived the geographic markets for eastern New
England weekend skiing and for Maine day skiing;
--the proposed merger does not pose any anticompetitive problem;
--the proposed divestiture does not solve the anticompetitive problem
alleged in the Complaint; and
--Mt. Cranmore is not viable except as part of the post-merger entity.
The comments in opposition to the proposed Final Judgment are
addressed in the following sections of this Response and are arranged
by the antitrust issues they raise.\3\
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\3\ This Response addresses all of the antitrust issues that are
raised in the comments and issues related to the substance of the
Complaint and proposed Final Judgment. Unrelated arguments and
objections are not discussed, such as complaints about statements
reported in the press (32, 60). These comments are irrelevant to the
issues of this case, and not properly subject of comment to which
the Antitrust Division must respond under the Tunney Act.
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B. The Clayton Act Applies to Acquisitions in the Ski Industry
The Conway Report along with several commentors (12, 26, 32, 33,
56, 77, 82, 89) suggest that the antitrust laws should not apply to the
ASC/S-K-I merger because skiing is a ``leisure activity.'' They
maintain that the majority of skiers are middle- and upper-income
people who pay for the activity with ``discretionary dollars.''
In general, however, the antitrust laws protect consumers in
whatever markets they choose to spend their money. Specifically,
Section 7 of the Clayton Act does not distinguish between leisure
activities and other lines of commerce. Rather, subject to certain
jurisdictional qualifications, Section 7 prohibits all acquisitions
``where in any line of commerce or in any activity affecting commerce
in any section of the country, the effect of such acquisition may be
substantially to lessen competition, or to tend to create a monopoly.''
15 U.S.C. Sec. 18 (emphasis added). The provision of weekend and day
skiing clearly constitute lines of commerce subject to Section 7 and
other antitrust laws. The business of skiing comprises all services
related to providing access to downhill skiing, including but not
limited to, providing lifts; ski patrol; snowmaking; design, building;
and grooming of trails; skiing lessons; and ancillary services such as
food service, entertainment, and lodging. See Aspen Highlands Skiing
Corp v. Aspen Skiing Co., 738 F.2d 1509, aff'd, 472 U.S. 585 (1984)
(jury in private antitrust case found relevant product market and
injury in downhill skiing). Thus, the Department's antitrust analysis
of the proposed merger of ski slopes is appropriate.
C. Downhill Skiing Is a Relevant Product Market for Antitrust Purposes
The Conway report asserts that the ``ski industry is not in
competition with itself,'' but rather is part of a larger leisure and
sports industry. For purposes of antitrust analysis, Conway and several
commentors (22, 41, and 64) would define the relevant product market as
all leisure and sports activities, including gambling, cruises, warm
weather resorts, adventure/experience trips, shopping, theater, music,
and professional sports. Conway at 18.
The Antitrust Division's review of mergers is governed by the
Clayton and Sherman Acts, Supreme Court precedent, and the ``Horizontal
Merger Guidelines'' issued jointly by the Department and the Federal
Trade Commission in 1992. The standard for defining a relevant product
market is set forth below:
Specifically, the Agency will begin with each product (narrowly
defined) produced or sold by each merging firm and ask what would
happen if a hypothetical monopolist of that product imposed at least
a `small but significant and nontransitory' increase in price, but
the terms of sale of all other products remained constant. If, in
response to the price increase, the reduction in sales of the
product would be large enough that a hypothetical monopolist would
not find it profitable to impose such an increase in price, then the
Agency will add to the product group the product that is the next-
best substitute for the merging firm's product.
Horizontal Merger Guidelines Sec. 1.11. See Brown Shoe v. U.S., 370
U.S. 294 (1962).
Applying this standard to the present case, downhill skiing is the
relevant product market. For purposes of this merger, downhill skiing
differs from other winter recreational activities (such as cross-
country-skiing, ice skating, snowmobiling, ice climbing, and cruises to
warm weather resorts) and from all-weather activities (such as shopping
and gambling), because as the Department's investigation showed, if
prices at ASC resorts went up a small but significant amount after the
merger (for example, by five percent without inflation or any quality
improvements), people might switch where they went to ski, but they
would continue to ski rather than switch to these other recreational
activities. Typical downhill skiers would not switch to an activity
such as ice-climbing, for example, just because the price of a downhill
ticket increases by a small amount. They certainly would not switch in
sufficient numbers to defeat a price increase. Based on this
information, downhill skiing is the appropriate relevant product market
for our analysis.
D. There Are Regional Geographic Markets for Weekend Skiing in Eastern
New England and for Day Skiing in Maine
The Conway Report (p. 5) and commentors 34, 41, and 64 suggest that
the relevant geographic market for purposes of analyzing the proposed
acquisition is increasingly global in nature. Alternatively, Conway and
numerous commentors (1, 8, 13, 14, 17, 19, 21, 25, 30, 33, 44, 47-50,
53-57, 62, 70-72, 78-81, 85, 86, 89) maintain that there are many
resorts in the Mt.
[[Page 55997]]
Washington Valley, elsewhere in New England, and even in the western
U.S. that compete with Mt. Cranmore. Therefore, the commentors assert
that the Department's eastern New England/weekend and Maine/day
geographic markets are too narrow to be meaningful.
The standard for defining a relevant geographic market is set forth
below:
In defining the geographic market or markets affected by a
merger, the Agency will begin with the location of each merging firm
(or each plant of a multiplant firm) and ask what would happen if a
hypothetical monopolist of the relevant product at that point
imposed at least a `small but significant and nontransitory'
increase in price, but the terms of sale at all other locations
remained constant. If, in response to the price increase, the
reduction in sales of the product at that location would be large
enough that a hypothetical monopolist producing or selling the
relevant product at the merging firm's location would not find it
profitable to impose such an increase in price, then the Agency will
add the location from which production is the next-best substitute
for production at the merging firm's location.
Horizontal Merger Guidelines Sec. 1.21. See Brown Shoe v. U.S., 370
U.S. 294 (1962).
Thus, the appropriate starting point for defining the relevant
geographic market is the area in and around ASC's and S-K-I's resorts.
If ASC could impose a ``small but significant and nontransitory'' price
increase after the merger (for example, five percent) without causing a
sufficient number of skiers to switch to ski slopes in other geographic
areas and defeat the price increase, then the appropriate geographic
market is limited to these locations. Resorts in other geographic
regions of the country or abroad should not be included in the relevant
geographic market.
The Department's investigation revealed that geographic markets for
weekend and day skiing are indeed regional, rather than national or
international. Skiers are not willing to travel an unlimited distance
to ski. Traveling to distant ski resorts imposes a burden on the skier,
either in the form of excessive driving time or large additional
expense for airfare. The determinative factors in how far people are
willing to travel for skiing are the duration of the trip (e.g., single
day, weekend, extended vacation), the qualitative aspects of the
particular resort (e.g., number of trails and lifts, variety and
difficulty of trails, snowmaking, night skiing, accommodations, and
other amenities), and price. Ski resorts may compete in several
markets--quite local markets for day skiers, larger markets for weekend
skiers, and quite large markets for extended skier vacations. Because
ski resorts can offer different prices in these different markets, each
one is appropriate for antitrust analysis.
Prior to the proposed acquisition, ASC and S-K-I each operated a
total of four ski resorts in Maine, New Hampshire, and Vermont. They
were the two largest owner/operators of ski resorts in New England, and
this transaction would have combined eight of the largest ski resorts
in this region. The Department's investigation revealed that ASC and S-
K-I competed directly and significantly for two distinct groups of
skiers--eastern New England weekend skiers (i.e., those in Maine,
eastern Massachusetts and Connecticut, and Rhode Island) and Maine day
skiers. Although other categories of skiers (e.g., skiers from other
areas and skiers on extended vacation) visit ASC's and S-K-I's resorts,
those skiers were not adversely affected by the merger. The proposed
acquisition substantially increased concentration only among the ski
resorts to which eastern New England residents practicably could go for
weekend ski trips, and to which Maine residents practicably could go
for day ski trips. As a result, the acquisition threatened to raise the
price of, or reduce discounts for, weekend and day skiing to consumers
living in these areas.
1. Eastern New England Weekend Skiers
Eastern New England residents who wish to ski over a weekend can
feasibly turn only to a limited number of resorts with adequate
services (e.g., accommodations, number and variety of trails, and other
amenities) and that are located nearby in Maine, New Hampshire,
Vermont, or western Massachusetts. These are the resorts that have the
necessary qualities and are within a reasonable traveling distance for
eastern New England weekend skiers.
The Department considered the ski areas identified by the Conway
Report along with many others as potential choices for New England
weekend skiers. Of the fourteen resorts identified by the Conway
Report, four would have been owned by ASC after the acquisition as
originally proposed. Smaller ski resorts among the fourteen (such as
King Pine, Shawnee Peak, Black Mountain, and Gunstock) and other
resorts located farther away (such as New York, the West Coast, and
abroad) cannot, and after this transaction would not, constrain prices
charged to weekend skiers living in eastern New England. The smaller
resorts lack the qualitative aspects previously identified (number of
trails and lifts, variety and difficulty of trails, snowmaking, night
skiing, accommodations, and other amenities) and the more distant
resorts are too far away to constrain a small but significant price
increase after the merger of ASC and S-K-I resorts. Although eastern
New England skiers occasionally choose to ski at these smaller or even
more distant resorts, skiing at such resorts is not a practical or
economic alternative for most eastern New England weekend skiers most
of the time.
Ski resorts in Maine, New Hampshire, Vermont, and western
Massachusetts that have the necessary qualities and services to attract
weekend skiers from eastern New England can charge different effective
prices to these skiers than they charge to others. Eastern New England
weekend skiers can be identified easily by the ski resorts that are
reasonable alternatives for these consumers. These ski resorts can
charge eastern New England weekend skiers different prices than charged
to day skiing customers, to customers coming from other parts of the
country, or to customers who stay longer than a weekend. For example,
ski resorts can offer coupons for discounted lift tickets packaged with
lodging and/or airfare, either through direct mail or through
advertising in local papers in the New York, Washington D.C., or
Atlanta metropolitan areas, and not offer such coupons in eastern New
England. A single firm controlling all the resorts in Maine, New
Hampshire, and Vermont with the most attractive qualities and services
for weekend skiing would be able to raise prices a small but
significant amount to eastern New England weekend skiers without losing
sufficient business to smaller or more distant resorts to make the
price increase unprofitable.
Based on this analysis, the Department concluded, and maintains,
that the provision of weekend downhill skiing to eastern New England
residents is a relevant geographic market within the meaning of Section
7 of the Clayton Act.
2. Maine Day Skiers
Before the proposed acquisition, ASC provided skiing to Maine day
skiers primarily at its Sunday River, Attitash/Bear Peak, and Mt.
Cranmore ski resorts. S-K-I provided skiing to Maine day skiers
primarily at its Sugarloaf resort. The acquisition would have brought
these alternatives for Maine skiers under common ownership and control.
Moreover, the ASC acquisition as proposed would have eliminated
Waterville Valley as a non-ASC-owned resort that Maine day skiers could
[[Page 55998]]
consider. Maine residents feasibly can turn only to resorts in Maine
and eastern New Hampshire for day skiing trips. These are the resorts
that are within a reasonable traveling distance for Maine day skiers.
Ski resorts located farther from Maine and eastern New Hampshire
cannot, and after this transaction would not, constrain prices charged
to day skiers living in Maine. Although Maine skiers occasionally
choose to ski at such more distant resorts, skiing at such resorts is
not a practical or economic alternative for most Maine day skiers most
of the time.
Ski resorts in Maine and eastern New Hampshire easily can charge
different prices to Maine day skiers than they charge to other skiers.
Maine day skiers, for example, can be identified by the ski resorts
that are reasonable alternatives for these consumers to drive to for a
day of skiing. These ski resorts can charge Maine day skiers different
effective prices than those charged to out-of-state skiers or to Maine
skiers who stay multiple days. A single firm controlling all the ski
resorts in Maine and eastern New Hampshire would be able to raise
prices a small but significant amount to Maine day skiers (mainly by
reducing or eliminating discounts) without losing so much business as
to make the price increase unprofitable.
Based on this analysis the Department concluded, and maintains,
that the provision of day skiing to Maine residents is a relevant
geographic market within the meaning of Section 7 of the Clayton Act.
The Conway Report makes the following assertions:
--within an hour and fifteen minutes of North Conway there are fourteen
ski areas that create a competitive market place for Maine day skiers
(Conway at 5-6);
--data from 1996 shows that Mt. Cranmore had 125,000 skier visits of
which 6,500 (5.3%) were from Maine and Attitash had 201,000 skier
visits of which 4,422 (2.2%) were from Maine compared with 92,846 total
skier visits from Maine to the state of New Hampshire; thus, Maine
skiers already have sufficient alternatives (Id. at 8);
--the Maine Attorney General's Office negotiated a pricing discount
program for Maine residents ``which the DOJ is apparently satisfied
with'' (Id. at 9).
As with New England weekend skiers, the Department considered all
fourteen of the ski areas identified in the Conway Report along with
many others in its analysis of the competitive consequences of the
proposed merger on Maine day skiers. Of the fourteen ski areas
identified in the Conway Report, three (Cranmore, Attitash, and Sunday
River) were owned by ASC and one (Waterville Valley) was owned by S-K-
I. Many of the other smaller resorts lack the qualitative aspects
previously identified (number of trails and lifts, variety and
difficulty of trails, snowmaking, night skiing, and other amenities) to
constrain a small but significant price increase after the merger of
ASC and S-K-I resorts. Moreover, although many of these resorts are
within an hour and fifteen minutes of North Conway, the focus of our
inquiry is on the distance for day skiers from population centers in
Maine. Many skiers from Portland, Maine, for example, would not find it
practical to drive an additional hour and fifteen minutes beyond North
Conway, where Mt. Cranmore is located (an hour and a half or more trip
for Portland residents), for a day ski trip. For these residents, the
Maine resorts along with Mt. Cranmore and Attitash in eastern New
Hampshire are the most feasible resorts for day skiing.
Rather than focus on the percentage of Maine skier visits to Mt.
Cranmore compared to total New Hampshire skier visits from Maine, the
Department believes the appropriate focus should be on the practical
alternatives available to the Maine day skier after the merger that
could constrain a small but significant price increase by ASC. Prior to
the proposed acquisition, Sunday River (ASC) and Sugarloaf (S-K-I) in
Maine and Mt. Cranmore and Attitash (ASC) in New Hampshire provided
practical and viable alternatives in terms of distance, qualitative
aspects, and price competition for Maine day skiers. After the
acquisition ASC would own Sunday River, Sugarloaf, and Attitash. With
the divestiture of Mt. Cranmore, the Department believes Maine day
skiers will have a feasible and attractive competing alternative to ASC
resorts in Maine and New Hampshire. According to the Conway Report
statistics, Mt. Cranmore already receives almost one and one-half times
more skier visits from Maine than Attitash. The divesture provides the
opportunity for even more Maine day skiers to ski Mt. Cranmore as an
alternative to ASC resorts in the immediate vicinity and to constrain
noncompetitive price increases by ASC.
The Maine Attorney General's Office did negotiate a pricing
discount program with ASC for Maine residents. However, the program is
a percentage-based program. It requires ASC at its Sunday River and
Sugarloaf resorts to compute a ratio of the average resident and non-
resident ticket prices for the 1995-96 season and maintain that ratio
in future years. The Department generally prefers not to attempt to
remedy anticompetitive mergers with price regulation, but rather to
ensure that there is a structurally competitive marketplace that will
provide competitive pricing and high quality goods and services on its
own as a result of the competition. By preserving Mt. Cranmore as a
competitive alternative to ASC ski resorts, the Department believes the
marketplace itself will provide lower prices, higher quality services,
and attractive alternatives for Maine day skiers.
E. The Proposed Merger Is Likely To Result in Increased Prices or
Reduced Discounts in the Two Markets as Alleged
The Conway Report and commentors raise several issues about
pricing:
--the merger is not anticompetitive because it does not create a
single-firm monopoly (Conway at 6);
--the Department has not shown that a price increase will result from
the merger (Id. at 14);
--economies of scale may actually allow reduction in ticket prices
(commentors 9, 22, 53, 84);
--the Department has not shown that price increases will be
``unacceptable to the public;'' higher prices are ``justified and
acceptable to skiers when there is an increase in the level of
services,'' which should be taken into account (Conway at 6); price
increases would reflect improved conditions that LBO brings to the
resort, not monopoly pricing (commentors 12, 25).
The purpose of the Department's review of mergers under the
antitrust laws is to identify and challenge mergers that reduce
competition, facilitate the creation or exercise of market power, or
threaten to increase prices or reduce product quality to consumers. The
Clayton Act does not require the Untied States to wait until there is
an actual single-firm monopoly created by the merger, nor does it
require the Department to violate the antitrust laws. It simply
requires a showing that the effect of an acquisition ``may be
substantially to lessen competition, or to tend to create a monopoly.''
15 U.S.C. Sec. 18 (emphasis added). Market power can be exercised
through supracompetitive prices in market structures that are well
short of an actual monopoly. The Department's analysis of the ASC
transaction predicted that the new entity as originally proposed would
have had sufficient market power to impose price increases.
[[Page 55999]]
In its analysis of post-merger market power, the Department also
considers and evaluates potential efficiencies of the proposed
transaction that could bring improved service or lower prices to
consumers. In the present transaction the Department determined that
any efficiencies resulting from the proposed merger that were
obtainable by ASC in operating multiple resorts were not sufficient to
offset the potential for price increases as a result of the market
power acquired by ASC after the merger.
Moreover, the proposition that price increases after the
acquisition might be ``acceptable'' to the public would confirm that
the markets at issue are properly defined and threatened with loss of
competition. It could mean not only that consumers would face higher
prices, but not have adequate competitive alternatives to which they
could turn. Furthermore, the policy underlying the antitrust laws as
enacted by Congress and applied by the courts is that competition is
the best way to achieve the optimal combination of price and quality.
An antitrust analysis evaluates a merger by considering that the
quality of the product or service is held constant in determining
whether the merged entity would have sufficient market power to impose
a small but significant price increase on consumers. Price increases
that proportionally reflect improvements in quality or service are not
considered anticompetitive.
The Conway Report and several commenters also state:
--skiers do not make their decision where to ski solely on price; other
factors are ski conditions, ski terrain, lift facilities, snowmaking,
and amenities (Conway at 14; commentors 9, 14, 15, 22, 23, 26, 54, 61,
93);
--if the merger results in an anticompetitive price increase, people
will stop skiing (commentors 22, 25, 34, 58, 72, 77) or other resorts
will expand output and undercut those prices (Conway at 15; commentor
43); state-owned mountains in New Hampshire (Sunapee and Cannon)
provide price control (commentors 47-49, 55, 57, 62);
--the merger will hold prices down by encouraging more mid-week skiers
(commentor 73).
The Department did consider factors such as ski conditions, ski
terrain, lift facilities, snowmaking, and amenities in defining the
product market. The determinative factors in how far people are willing
to travel for skiing at a particular mountain are the duration of the
trip (e.g., single day, weekend, extended vacation), the qualitative
aspects of the resort (such as those outlined above), and price. The
lack of these qualitative factors are the very reason many of the
smaller resorts identified in the Conway Report are not feasible
alternatives for substantial numbers of New England weekend skiers.
In its analysis of the market power that ASC would have after its
acquisition of S-K-I, the Department considered whether people would
stop skiing if prices increased at ASC resorts or switch to other
resorts that had lower prices. Although some New England weekend skiers
and Maine day skiers may choose to stop skiing or to ski at smaller
resorts with less desirable qualitative aspects in response to a small
but significant price increase by ASC, they would not do so in
sufficient numbers to defeat such a price increase. The typical
downhill skier who goes to ASC resorts for the qualitative experience
is unlikely to stop skiing or switch to smaller resorts with less
amenities because ticket prices increase by a small amount, such as
five percent.
Moreover, many of the smaller resorts are unlikely to be able to
expand facilities within a timely fashion to defeat an anticompetitive
price increase. For example, to increase the number of lifts and trails
or add snowmaking or night skiing capability would take these resorts
more than two years in most cases and/or require a long regulatory
approval process if their resort is on national forest land.
F. The Proposed Divestiture Solves the Anticompetitive Problem Alleged
in the Complaint
Commentors 11, 43, and 45 suggested that if the Department had
concerns about the ASC/S-K-I acquisition, it should have required ASC
to divest a larger resort, such as Killington or Sunday River, instead
of smaller resorts like Waterville Valley and Cranmore.
In analyzing the proposed Final Judgment, ``the court's function is
not to determine whether the resulting array of rights and liabilities
is one that will best serve society, but only to confirm that the
resulting settlement is within the reaches of the public interest.''
United States v. Western Elec. Co., 993 F.2d 1572, 1576 (D.C. Cir.),
cert. denied, 114 S.Ct. 487 (1993) (emphasis added, internal quotation
and citation omitted). The relief in the proposed Final Judgment is
sufficient to preserve competition for eastern New England weekend and
Maine day skiers.
Before the proposed acquisition, Sunday River (ASC) and Sugarloaf
(S-K-I) in Maine; Mt. Cranmore (ASC), Attitash (ASC), and Waterville
Valley (S-K-I) in New Hampshire; and Sugarbush (ASC), Killington (S-K-
I), and Mt. Snow (S-K-I) in Vermont all provided practical and viable
alternatives in terms of distance, qualitative aspects, and price
competition for New England weekend and Maine day skiers. After the
acquisition ASC would own Sunday River, Sugarloaf, Attitash, Sugarbush,
Killington, and Mt. Snow. By reaching an agreement to divest Mt.
Cranmore and Waterville Valley, New England weekend and Maine day
skiers will continue to have sufficient feasible and attractive
alternatives to ASC resorts. Divesting Killington or another Vermont
resort, for example, would have been of no benefit to Maine day skiers.
Moreover, the divestitures ordered in the proposed Final Judgment
will resolve the substantial increase in concentration brought about by
the proposed transaction. With these divestitures, the post-merger HHI
\4\ for the eastern New England weekend skiing market will be below
1800, and the parties' post-merger share of that market will be less
than 40 percent. The post-merger HHI for the Maine day skiing market
will be slightly over 1900 with these divestitures, and that parties'
post-merger share of that market will be less than 35 percent. Given
these post-divestiture HHI levels, the combined firm's post-divestiture
market shares, and the number and size of independent ski resorts
remaining in the affected markets, the proposed transaction is not
likely to lead to an unilateral anticompetitive effect or to a higher
probability of coordinated behavior, provided the divestitures are
made.
---------------------------------------------------------------------------
\4\ ``HHI'' is an abbreviation for the Herfindahl-Hirschman
Index, a commonly accepted measures of market concentration. It is
calculated by squaring the market share of each firm competing in
the market and then summing the resulting numbers. For example, for
a market consisting of four firms with shares of thirty, thirty,
twenty and twenty percent, the HHI is 2600
(302+302+202+202=2600). The HHI takes into
account the relative size and distribution of the firms in a market
and approaches zero when a market consists of a large number of
firms of relatively equal size. The HHI increases both as the number
of firms in the market decreases and as the disparity in size
between those firms increases.
Markets in which the HHI is between 1000 and 1800 are considered
to be moderately concentrated and those in which the HHI is in
excess of 1800 points are considered to be concentrated.
Transactions that increase the HHI by more than 100 points in
moderately concentrated and concentrated markets presumptively raise
antitrust concerns under the Department of Justice and Federal Trade
Commission 1992 Horizontal Merger Guidelines.
---------------------------------------------------------------------------
G. Unique Aspects of Mt. Cranmore
The Conway Report and several commentors suggest that there are a
[[Page 56000]]
number of unique aspects of Mt. Cranmore that should be considered:
--there are various economies associated with operating and marketing
Attitash/Bear Creek together with Mt. Cranmore; these economies will be
lost if Mt. Cranmore is divested, making Mt. Cranmore less viable
(Conway at 13; commentor 94);
--the proposed Final Judgment reduces options for consumers because it
eliminates the Attitash/Cranmore joint ticket now offered through ASC
(commentors 1, 16, 21, 30, 32, 50, 63, 66, 70, 72, 77, 80, 85, 86); and
the Department is incapable of determining whether the prospective
buyer will be a strong operator (commenter 32);
--divestiture would have a significant adverse economic impact on the
area around Mt. Cranmore (Conway at 12-13; commentors 2, 5, 12, 14, 17-
19, 22-25, 29, 31, 33-36, 38, 43, 47-53, 55, 57, 59-62, 64, 65, 68, 69,
74, 83, 84, 91-96);
--Mt Cranmore cannot survive on a stand alone basis (Conway at 12-13;
commentors 2, 5, 15-18, 23, 28, 29, 34, 37, 38, 41, 45, 50, 59, 61, 63,
64, 66, 69, 71, 78, 85, 86, 89, 94); it needs to be part of a larger
organization because of economies in marketing (Conway at 12-13;
commentors 2, 9, 19, 21, 23, 26, 28-30, 54, 64, 77, 90, 96);
--Cranmore was struggling to survive before ASC purchased it; ASC has
invested heavily in Mt. Cranmore--in snowmaking equipment, lifts, and
marketing (Conway at 12-13; commentors 1, 2, 4-10, 12, 13, 15-18, 22,
24-29, 37-39, 40, 41, 42, 46, 50, 54, 56, 58, 60, 61, 63, 66, 69-72,
77, 79, 80-82, 87, 88, 89, 90, 93, 95).
There probably are some economies associated with operating and
marketing Mt. Cranmore together with ASC's other ski resorts. But most
relevant economies of scale, such as large-scale purchasing of lifts
and equipment and sharing overhead and administrative staff, also can
be obtained if Cranmore is purchased by another owner that operates
multiple ski resorts. Economies of scale associated with being part of
a larger organization are not unique to ASC, and there is no reason to
think they will be lost as a result of a divestiture of Cranmore to
another operator with multiple resorts.
Regarding joint tickets for both Attitash and Cranmore, nothing
prohibits the new owner of Cranmore, for example, from entering into
joint ticket arrangements with Attitash or other ski resorts for
tickets that would be good at any of the cooperative resorts. Moreover,
if Cranmore and Waterville Valley were divested to the same buyer, the
new owner could offer a joint ticket to these two resorts. In the past,
sales revenues from one joint Attitash/Cranmore ticket has been at most
less than four percent of Cranmore ticket revenues. Only one percent of
Cranmore ticket purchasers have paid the nominal upgrade fee to be able
to ski Attitash. If anything, the lack of a joint ticket would seem to
hurt Attitash, not Cranmore, by this measure. Given the ability to
continue offering joint ticket arrangements with other resorts, the
separation of ownership of Attitash and Cranmore should not be a
significant factor in the decision to divest Cranmore.
It clearly advances the Department's goal that a financially strong
buyer with good management skills be found to purchase Mt. Cranmore.
The whole purpose behind the divestiture is to maintain Mt. Cranmore as
a healthy, vigorous, independent competitor to ASC. Such competition
should spur increasingly improved ski services and conditions while
maintaining competitive pricing. Although the Department cannot
guarantee the financial success of the new purchaser of Mt. Cranmore,
the Department does have experience in evaluating the strength and
potential success of prospective purchasers in consent decree cases
over the years, and believes it can do so in this case.
The Department recognizes that maintaining Mt. Cranmore as a
healthy, vigorous competitor not only is important to competition, but
also is very important to the citizens and businesses located near Mt.
Cranmore in the Mount Washington Valley. In performing a merger
analysis, the Department's responsibility is to prevent violations of
the antitrust laws and to preserve competition. The principle that
underlines the antitrust laws enacted by Congress is that vigorous,
free market competition is the best way to protect the economy. The
Department is not charged, and it would be beyond its appropriate
sphere if inquiry, to evaluate directly--and base its enforcement
decisions on--the economic impact of the collateral spending of
consumers in areas other than the product markets being investigated.
Rather, this interest is considered and protected indirectly by
protecting a competitive free market and, in the specific case of a
divestiture, in ensuring the viability of the divested assets as a
vigorous competitor. Preserving Mt. Cranmore as a vigorous competitor
is the essence of the relief sought in the consent decree; by
protecting competition, the proposed relief also should protect
collateral spending by consumers and the resulting local economic
vitality.
Whether Mt. Cranmore can survive as a strong competitor on a stand-
alone basis is one of the factors the Department will evaluate in
analyzing the suitability of potential purchasers. The proposed
divesture would allow Cranmore and Waterville Valley to be sold to a
single purchaser as one option. Moreover, the benefits that ASC brought
to Mt. Cranmore by investing in snowmaking equipment, and marketing
will enure to the benefit of the new purchaser and put Cranmore in that
much better position to be a strong competitor to ASC.
III. The Legal Standard Governing the Court's Public Interest
Determination
Once the United States moves for entry of the proposed Final
Judgment, the Tunney Act directs the Court to determine whether entry
of the proposed Final Judgment ``is in the public interest.'' 15 U.S.C.
Sec. 16(e). In making that determination, ``the court's function is not
to determine whether the resulting array of rights and liabilities is
one that will best serve society, but only to confirm that the
resulting settlement is within the reaches of the public interest.''
United States v. Western Elec. Co., 993 F.2d 1572, 1576 (D.C. Cir.)
cert. denied, 114 S. Ct. 487 (1993) (emphasis added, internal quotation
and citation omitted).\5\ The Court should evaluate the relief set
forth in the proposed Final Judgment and should enter the Judgment if
it falls within the government's ``rather broad discretion to settle
with the defendant within the reaches of the public interest.'' U.S.
v. Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995). Accord United
States v. Associated Milk Producers, 534 F.2d 113, 117-18 (8th Cir.
1976), cert. denied, 429 U.S. 940 (1976).
---------------------------------------------------------------------------
\5\ The Western Electric decision concerned a consensual
modification of an existing antitrust decree. The Court of Appeals
assumed that the Tunney Act was applicable.
---------------------------------------------------------------------------
The Court is not ``to make de novo determination of facts and
issues.'' Western Elec., 993 F.2d at 1577. Rather, ``[t]he balancing of
competing social and political interests affected by a proposed
antitrust decree must be left, in the first instance, to the discretion
of the Attorney General.'' Id. (internal quotation and citation omitted
throughout), In particular, the Court must defer to the Department's
assessment of likely competitive consequences, which it may reject
``only
[[Page 56001]]
if it has exceptional confidence that adverse antitrust consequences
will result--perhaps akin to the confidence that would justify a court
in overturning the predictive judgments of an administrative agency.''
Id.\6\
---------------------------------------------------------------------------
\6\ The Tunney Act does not give a court authority to impose
different terms on the parties. See, e.g., United States v. American
Tel. & Tel. Co., 552 F. Supp. 131, 153 n. 95 (D.D.C. 1982), aff'd
sub nom. Maryland v. United States, 460 U.S. 1001 (1983)(Mem.);
accord H.R. Rep. No. 1463, 93d Cong., 2d Sess. 8 (1974). A court, of
course, can condition entry of a decree on the parties' agreement to
a different bargain, see, e.g., AT & T, 552 F. Supp. at 225, but if
the parties do not agree to such terms, the court's only choices are
to enter the decree the parties proposed or to leave the parties to
litigate.
---------------------------------------------------------------------------
The Court may not reject a decree simply ``because a third party
claims it could be better treated.'' Microsoft, 56 F.3d at 1461 n.9.
The Tunney Act does not empower the court to reject the remedies in the
proposed Final Judgment based on the belief that ``other remedies were
preferable.'' Id. at 1460. As Judge Greene has observed:
If courts acting under the Tunney Act disapproved proposed
consent decrees merely because they did not contain the exact relief
which the court would have imposed after a finding of liability,
defendants would have no incentive to consent to judgment and this
element of compromise would be destroyed. The consent decree would
thus as a practical matter be eliminated as an antitrust enforcement
tool, despite Congress' directive that it be preserved.
United States v. American Tel. & Tel. Co., 552 F. Supp. 131, 151
(D.D.C. 1982), aff'd sub nom. Maryland v. United States, 460 U.S. 1001
(1983) (Mem.).
Moreover, the entry of a governmental antitrust decree forecloses
no private party from seeking and obtaining appropriate antitrust
remedies. Defendants will remain liable for any illegal acts, and any
private party may challenge such conduct if and when appropriate. The
issue before the Court in this case is limited to whether entry of this
particular proposed Final Judgment, agreed to by the parties as
settlement of this case, is in the public interest.
Further, the Tunney Act does not contemplate judicial reevaluation
of the wisdom of the government's determination of which violations to
allege in the Complaint. The government's decision not to bring a
particular case on the facts and law before it at a particular time,
like any other decision not to prosecute, ``involves a complicated
balancing of a number of factors which are peculiarly within [the
government's] expertise.'' Heckler v. Chaney, 470 U.S. 821, 831 (1985).
Thus, the Court may not look beyond the Complaint ``to evaluate claims
that the government did not make and to inquire as to why they were not
made.'' Microsoft, 56 F.3d at 1459 (emphasis in original); see also
Associated Milk Producers, 534 F.2d at 117-18.
Finally, the government has wide discretion within the reaches of
the public interest to resolve potential litigation. E.g., Western
Elec. Co., 993 F.2d 1572; AT&T, 552 F. Supp. at 151. The Supreme Court
has recognized that a government antitrust consent decree is a contract
between the parties to settle their disputes and differences, United
States v. ITT Continental Baking Co., 420 U.S. 223, 235-38 (1975);
United States v. Armour & Co., 402 U.S. 673, 681-82 (1971), and
``normally embodies a compromise; in exchange for the saving of cost
and elimination of risk, the parties each give up something they might
have won had they proceeded with the litigation.'' Armour, 402 U.S. at
681. This Judgment has the virtue of bringing the public certain
benefits and protection without the uncertainty and expense of
protracted litigation. Armour, 402 U.S. at 681; Microsoft, 56 F.3d at
1459.
IV. Conclusion
After careful consideration of these comments, the United States
concludes that entry of the proposed Final Judgment will provide an
effective and appropriate remedy for the antitrust violation alleged in
the Complaint and is in the public interest. The United States will
therefore move the Court to enter the proposed Final Judgment after the
public comments and this Response have been published in the Federal
Register, as 15 U.S.C. Sec. 16(d) requires.
Dated: October 16, 1996.
Respectfully submitted,
John W. Van Lonkhuyzen,
Barry L. Creech (D.C. Bar # 421070),
Attorneys, U.S. Department of Justice, Antitrust Division, 1401 H
Street, N.W., Suite 4000, Washington, D.C. 20530, Tel: 202/307-0001.
Certificate of Service
On October 16, 1996, I caused a copy of the United States' Response
to Public Comments relating to the Proposed Final Judgment (with the
comments) to be served by facsimile and first-class mail upon
defendants in this action. A courtesy copy (without the comments) will
be mailed to each commentor as soon as practicable.
Barry L. Creech
Appendix--Index of Public Comments and Responses
------------------------------------------------------------------------
Comment Response
------------------------------------------------------------------------
1. Mr. and Mrs. Barry Berkal........... II.D, II.G
2. Charles Peter Pinkham............... II.G.
3. Beth Lincoln........................ II.A
4. Dr. Theodore Goldberg............... II.G
5. Charlotte Emmel..................... II.G
6. Evelyn Whelton...................... II.G
7. Beverly Mellen...................... II.G
8. Lawrence Markey..................... II.D, II.G
9. Gary P. Farmer...................... II.E, II.G
10. Mr. and Mrs. Bradford L. Boynton... II.G
11. Bill Glenn......................... II.F
12. Herbert H. Whittemore.............. II.B, II.E, II.G
13. Mr. and Mrs. Bartram W. Bumsted.... II.D, II.G
14. Mr. and Mrs. Richard Check......... II.D, II.E, II.G
15. John E. Hogan...................... II.E, II.G
16. Lawrence Fouraker, Ph.D............ II.G
17. Mr. and Mrs. Thomas O'Connor....... II.D, II.G
18. Mr. and Mrs. Arthur J. Brissman.... II.G
19. Harold C. Fisher................... II.D, II.G
20. Professor Stephen F. Ross Not Applicable.
(withdrawn by commenter).
21. Bruce Todd......................... II.D, II.G
22. John D. Krebs...................... II.C, II.E, II.G
23. Richard J. Fraser.................. II.E, II.G
24. Stanley P. Wilson.................. II.G
25. Joseph C. Webb..................... II.D, II.E, II.G
26. Dan Robinson....................... II.B, II.E, II.G
27. Peter B. Ward...................... II.G
28. Dick Smith......................... II.G
29. Robert L. Johnson.................. II.G
30. Robert M. Weiss.................... II.D, II.G
31. Mr. and Mrs. Robert McManus........ II.G
32. Harry Stead........................ II.B, II.G
33. Sandra W. Dahl..................... II.B, II.D, II.G
34. Robert C. Peterson................. II.D, II.E, II.G
35. Mr. and Mrs. Richard Anthony....... II.G
36. Miriam Regan....................... II.G
37. John J. Reilly, Jr................. II.G
38. Jennifer K. Savoie................. II.G
39. Frank Murphy....................... II.G
40. Jean M. Lees....................... II.G
41. David S. Urey...................... II.C, II.D, II.G
42. Thomas A. Mulkern.................. II.G
43. Richard F. Surrete................. II.E, II.F, II.G
44. Ronald K. Moore.................... II.D
45. Capt. David E. Bartlett............ II.F
46. Mr. and Mrs. Robert M. Fisher...... II.G
47. Mr. and Mrs. Robert A. McDaniel.... II.D, II.E, II.G
48. Gilbert G. Mahau................... II.D, II.E, II.G
49. Robert and Joan Billings........... II.D, II.E, II.G
50. David A. Pope...................... II.D, II.G,
51. Janet Cooper....................... II.G
52. Jeff Barley........................ II.G
[[Page 56002]]
53. Robert S. Morrell.................. II.D, II.E, II.G
54. Roy A. Lundquist................... II.D, II.E, II.G
55. Mr. and Mrs. Richard O. Pinkham.... II.D, II.E, II.G
56. Cynthia A. Feltch.................. II.B, II.D, II.G
57. Harold Berk........................ II.D, II.E, II.G
58. Bob Kyle........................... II.E, II.G
59. James R. Lane...................... II.G
60. William J. Denning................. II.G
61. T.M. Egbert, Jr.................... II.E, II.G,
62. Henry DiRico....................... II.D, II.E, II.G
63. Mr. and Mrs. Fred Pereira.......... II.G
64. Richard F. Hickey.................. II.C, II.D, II.G
65. Miriam Regan....................... II.G
66. Sally Hindson...................... II.G
67. Dennis J. Holland.................. II.A
68. George J.R. Sauer.................. II.G
69. John C. Conniff.................... II.G
70. Charles Morse, Jr.................. II.D, II.G
71. Jack B. Middleton.................. II.D, II.G
72. Robert E. Adair.................... II.D, II.E, II.G
73. William D. Quinn................... II.A
74. Calvin J. Coleman.................. II.G
75. David S. Urey...................... II.E
76. Maryellen LaRoche.................. II.A
77. Cynthia B. Briggs.................. II.B, II.E, II.G
78. James H. Hastings.................. II.D
79. John B. Pepper..................... II.D, II.G
80. Priscilla Morse.................... II.D, II.G
81. Peter B. Edwards................... II.D, II.G
82. David Peterson..................... II.B, II.G
83. Miriam L. Regan.................... II.G
84. Mr. and Mrs. Robert Fisher......... II.E, II.G
85. Christropher J. Cote............... II.D, II.G
86. Mr. and Mrs. Ronald F. Cote........ II.D, II.G
87. Douglas C. Albert.................. II.G
88. Conrad Briggs...................... II.G
89. Richard A. Ware.................... II.B, II.D, II.G
90. Stephen P. Camuso.................. II.G
91. Dr. Alfred C. Peters............... II.G
92. Joan M. Moeltner................... II.G
93. Fred C. Anderson................... II.E, II.G
94. Ronald and Pamela Barber........... II.G
95. Honorable William E. Williams, Jr.. II.G
96. Mr. A.O. Lucy...................... II.G
97. Richard M. Chrenko................. II.A
98. ``Conway Report''.................. II.A, II.B, II.C, II.D, II.E,
II.F, II.G
------------------------------------------------------------------------
Public Comments
1. Mr. and Mrs. Barry Berkal, 1000 Paradise Road, PHR-West,
Swampscott, MA 01907
2. Charles Peter Pinkham, P.O. Box 543, Main Street, North Conway,
NH 03860
3. Beth Lincoln, Box 119, Bartlett, NH 03812
4. Dr. Theodore Goldberg, Box 283, North Conway, NH 03860
5. Charlotte Emmel, P.O. Box 117, Madison, NH 03849
6. Evelyn Whelton, P.O. Box 176, Madison, NH 03849
7. Beverly Mellen, P.O. Box 484, Intervale, NH 03845
8. Lawrence Markey, 66 Mountainvale Village, Center Conway, NH 03813
9. Gary P. Farmer, P.O. Box 56, Kearsarge, NH 03860
10. Mr. and Mrs. Bradford L. Boynton, Shapleigh House, Box 236,
Jackson, NH 03846
11. Bill Glenn, P.O. Box 310, North Conway, NH 03860
12. Herbert H. Whittemore, P.O. Box 204, Intervale, NH 03845
13. Mr. and Mrs. Bartram W. Bumsted, The Bumsted Agency, Box 1850,
Conway, NH 03818
14. Mr. and Mrs. Richard Check, Country Cabinets, etc., 95 East
Conway Road, Box 3240, North Conway, NH 03860
15. John E. Hogan, P.O. Box 488, Intervale, NH 03845
16. Lawrence Fouraker, Ph.D., P.O. Box 726, Intervale, NH 03845
17. Mr. and Mrs. Thomas O'Connor, RR1 Box 216, Albany, NH 03818
18. Mr. and Mrs. Arthur J. Brissman, P.O. Box 1085, Glen, NH 03838
19. Harold C. Fisher, Loon Watch Point, Box 1187, Conway, NH 03818
20. Stephen F. Ross (withdrawn by commenter), Professor of Law,
University of Illinois, College of Law, 504 E. Pennsylvania Avenue,
Champaign, IL 61829
21. Bruce Todd, P.O. Box 249, Bartlett, NH 03812
22. John D. Krebs, Planning & Economic Development Director, Town of
Conway, P.O. Box 70, Center Conway, NH 03813-0070
23. Richard J. Fraser, 3 Applewood Lane, Franklin, MA 02038
24. Stanley P. Wilson, P.O. Box 328, Intervale, NH 03845
25. Joseph C. Webb, P.O. Box 2153, North Conway, NH 03860
26. Dan Robinson, 526 Ocean House Rd., Cape Elizabeth, ME 04107
27. Peter B. Ward, 60 Bridge Street, Manchester, MA 01944
28. Dick Smith, P.O. Box 300, Crestwood Drive, North Conway, NH
03860
29. Robert L. Johnson, Robert L. Johnson, CPA & Associate, Route
16A, RR1, Box 6, Intervale, NH 03845-9503
30. Robert M. Weiss, P.O. Box 680, Route 302, North Conway, NH
03860-0680
31. Mr. and Mrs. Robert McManus, P.O. Box 516, Jackson, NH 03846
32. Harry Stead, 7 Glen Ellis Road, Glen, NH 03838-1268
33. Sandra W. Dahl, P.O. Box 789, Glen, NH 03838
34. Robert C. Peterson, Box 473, Glen, NH 03838
35. Mr. and Mrs. Richard Anthony, 3 Concannon Rd., Kingston, NH
03848
36. Miriam Regan, P.O. Box 345, Intervale, NH 03845
37. John J. Reilly, Jr., Vice President, College Advancement, Saint
Anselm College, 100 Saint Anselm Drive, Manchester, NH 03102-1310
38. Jennifer K. Savoie, P.O. Box 715, 17 Skyline Drive, Intervale,
NH 03845
39. Frank Murphy, 1 Yellow Brick Road, North Conway, NH 03860
40. Jean M. Lees, P.O. Box 364, North Conway, NH 03860
41. David S. Urey, Tech Works, 15 Kancamagas Estates, P.O. Box 337,
Conway, NH 03818
42. Thomas A. Mulkern, 4 Cortland Lane, Lynnfield, MA 01940
43. Richard F. Surrete, P.O. Box 31, Freedom, NH 03836
44. Ronald K. Moore, P.O. Box 349, Chocorua, NH 03817-0349
45. Capt. David E. Bartlett, P.O. Box 1044, North Conway, NH 03860
46. Mr. and Mrs. Robert M. Fisher, 615 Potter Road, Center Conway,
NH 03813
47. Mr. and Mrs. Robert A. McDaniel, 19 Belleview Ave., Marlboro, MA
01752
48. Gilbert G. Mahau, P.O. Box 278, Kearsarge, NH 03847
49. Robert and Joan Billings, P.O. Box 126, Jackson, NH 03846
50. David A. Pope, Box 120, Kearsarge, NH 03847
51. Janet Cooper, 45 Plainfield St., Waban, MA 02168
52. Jeff Barley, no address given
53. Robert S. Morrell, Storyland, P.O. Box 1776, Glen, NH 03838
54. Roy A. Lundquist, 1 Wildflower Trail, Village at Kearsage,
Kearsarge, NH 03847-0196
55. Mr. and Mrs. Richard O. Pinkham, 44 Powers Road, Concord, MA
01742
56. Cynthia A. Feltch, P.O. Box 40, Bartlett, NH 03812
57. Harold Berk, Signature Breads, 300 Middlesex Avenue, Medford, MA
02155
58. Bob Kyle, Bartlett, NH 03812
59. James R. Lane, P.O. Box 485, Jackson, NH 03846
60. William J. Denning, P.O. Box 704, Intervale, NH 03845
61. T.M. Egbert, Jr., P.O. Box 448, Glen, NH 03808
62. Henry DiRico, 774 Norfolk Street, Mansfield, MA 02048
63. Mr. and Mrs. Fred Pereira, 392 Brenda Lane, Franklin, MA 02038
64. Richard F. Hickey, 9 Metcommet Road, Scituate, MA 02066
65. Miriam Regan, P.O. Box 345, Intervale, NH 03845
66. Sally Hindson, 1640 Plaintiff Pike, Cranston, RI 02920-1320
67. Dennis J. Holland, Marcia A. Burchstead, 35 Skyline Drive, P.O.
Box 826, Intervale, NH 03845
68. George J.R. Sauer, 45 Fuller Street, Dedham, MA 02026
69. John C. Conniff, 157 Pleasantview Avenue, Longmeadow, MA 01106
70. Charles Morse, Jr., 19 Green Street, Newbury, MA 01951
71. Jack B. Middleton, McLane, Graf, Raulerson & Middleton, Nine
Hundred Elm Street, P.O. Box 326, Manchester, NH 03105-0326
72. Robert E. Adair, 150 Old Westside Road, North Conway, NH 03860
73. William D. Quinn, P.O. Box 21, Madison, NH 03849
74. Calvin J. Coleman, Alvin J. Coleman & Son, Inc., RR 1, Box 120,
Route 16, Conway, NH 03818
75. David S. Urey, TechWorks, 15 Kancamagus Estates, P.O. Box 337,
Conway, NH 03818
76. Maryellen LaRoche, P.O. Box 110, 277 Stark Rd., Conway, NH 03818
[[Page 56003]]
77. Cynthia B. Briggs, Locust Hill, P.O. Box 427, North Conway, NH
03860
78. James H. Hastings, 55 Stetson Street, Bradford, MA 01835
79. John B. Pepper, P.O. Box X, Jackson, NH 03846
80. Priscilla Morse, 19 Green St., Newbury, MA 01951
81. Peter B. Edwards, P.O. Box 1915, North Conway, NH 03860
82. David Peterson, Glass Graphics, Inc., P.O. Box 1199, 56 Pleasant
Street, Conway, NH 03818
83. Miriam L. Regan, Box 345, Intervale, NH 03845
84. Mr. and Mrs. Robert Fisher, 615 Potter Road, Center Conway, NH
03813
85. Christopher J. Cote, 29 Essex Street, Lowell, MA 01850
86. Mr. and Mrs. Ronald F. Cote, 29 Essex Street, Lowell, MA 01850
87. Douglas C. Albert, President, Albert Farms/Maine Turf Company,
RR 1, Box 103, Fryeburg, ME 04037
88. Conrad Briggs, Locust Hill, Box 427, 267 Kearsarge Road, North
Conway, NH 03860
89. Richard A. Ware, Hurricane Mtn. Farmhouse, P.O. Box 310,
Intervale, NH 03845
90. Stephen P. Camuso, 14 Cranmore Circle, North Conway, NH 03818
91. Dr. Alfred C. Peters, Topnotch, P.O. Box 536, Glen, NH 03838
92. Joan M. Moeltner, National Federation of Independent Business,
600 Maryland Avenue S.W., Suite 700, Washington, D.C. 20024
93. Fred C. Anderson, General Manager/CEO, New Hampshire Electric
Cooperative, Inc., RR#4, Box 2100, Tenney Mountain Highway,
Plymouth, NH 03264-9420
94. Ronald and Pamela Barber, 364 Thompson Road, North Conway, NH
03860
95. Honorable William E. Williams, Jr., House of Representatives,
State of New Hampshire, Committee on Resources, Recreation and
Development, State House, Concord, New Hampshire 03301
96. Mr. A.O. Lucy, Executive Director, Mount Washington Valley
Chamber of Commerce & Visitors Bureau, P.O. Box 2300, North Conway,
NH 03860
97. Richard M. Chrenko, P.O. 913, West Side Road, Glen, NH 03838-
0913
98. ``Conway Report'', Mt. Washington Valley/Mt. Cranmore Task
Force, James B. Somerville, Chairman, Town of Conway, P.O. Box 70,
Center Conway, NH 03813-0073
The Berkals
June 18, 1996.
Anne K. Bingaman,
U.S. Assistant Attorney General, Anti-Trust Division, Justice
Department, Washington, DC 20530
Dear Madam: We sincerely hope that you do not force America
Skiing to sell Mt. Cranmore.
We have been skiing there for well over twenty years, and no
other owner has done as much to improve the skiing at this area. We
were absolutely delighted with the improvements made last year. The
interchangeable ticket between Attitash and Cranmore is a great draw
for tourists. I trust that you are aware that Mt. Cranmore was for
sale for some time before it was purchased by LBO.
This section of New Hampshire has other areas which provide
competition within a reasonable driving distance, such as Black
Mountain, Wildcat Mountain, Bretton Woods, Loon, King Pine and
Shawnee Peak, all within a fifteen to forty-five minute drive.
We were all justifiably enthused when LBO Resort Enterprises
bought Mt. Cranmore, and we trust that the decision to force the
corporation to dispose of Mt. Cranmore will not be enforced, as we
feel it is not in the best interest of the public or the community.
Yours very truly,
Betty Berkal, etc.
Pinkham Real Estate
June 18, 1996.
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street, NW., Washington, DC 20530
Dear Mr. Conrath: I was horrified to hear the news that Les
Otten has been ordered to sell Cranmore Mountain Ski Area. Cranmore
is the life blood of our economy here in North Conway and the
keystone to Mt. Washington Valley. It is the thread by which North
Conway's economic health hangs. As a ski area, it is completely
incapable of standing alone in today's ski market. Past performance
has already proven that. Forcing it to do so again means disaster,
not just for Cranmore, but for this town.
Cranmore isn't a Fleet Bank or Bank of Boston that apparently
can merge without protest. It isn't even a Stowe or a Sugarbush, or
indeed a Waterville Valley among ski areas. It's a little hill with
wide slopes and pleasant trails and a verticle drop that poses no
competitive threat to ski areas such as these. However, it happens
to be located right in North Conway village, which feels its every
economic shiver. For the past seven years this village has been
freezing.
After a year of LBO's management, when Cranmore and North Conway
finally felt a resurgence of business, what kind of unconscionable
bureaucracy is this that would shove this unassuming little business
back out in the cold and imperil the lives and jobs of an entire
town? If it is fear of the merged firm raising prices, don't they
realize Cranmore as an independent business would have to raise
prices to afford the kind of continuing capital investment,
management and marketing dollars necessary to offer skiers a
competitive product? A bit of history may serve to illustrate what
this business means to the town.
Cranmore was founded in the late 1930s by Harvey Gibson, a local
boy who had made good, not to show a profit, but to return something
to his home town. During the three decades that followed--as with
most businesses heavily dependent on the weather--it was never a big
money maker, but it was able to pay its bills. However, in 1970 a
snow drought forced it to its knees. Skiers left for other areas
that had had the dollars for snow-making, or the size and altitude
not to require it. The town responded. Over 100 people, most from
this little village of 2,500, put down hard earned dollars to enable
the mountain to buy snow-making equipment. The Manchester Union
Leader headlined it as a town raising itself by its own bootstraps.
I was owner/operator of North Conway's Eastern Slope Inn at the
time, and I've never seen a community so aware of the importance of
one business to the economic future of all.
Since then, ski areas have required bigger and bigger
investments to stay competitive: partial snow making had to be
extended to 100% cover; T Bars had to become chair lifts; chair
lifts have had to become detachable quads; base stations--like the
historic one at Cranmore--have had to be modernized, and louder
marketing voices are needed to meet the increasing competition from
inexpensive package plans to the big areas in the Rockies and the
Alps. Nowhere is the major investment required by a business more
obvious and open to the buying public than in a ski area, where a
skier can tell within minutes whether or not its product is
competitive.
During recent years, Cranmore has been owned by people who just
wanted to say they owned a ski area. Like a yacht, if you had to ask
how much it cost, you couldn't afford it. Today's costs have removed
ski areas from the toy department. Without the assistance of a
larger organization, to take advantage of economy of scale, Cranmore
is doomed. And so is the village and town around it.
This past year of LBO ownership has rejuvenated our local
economy. From 1990 to 1993 I was President of the Mt. Washington
Valley Chamber of Commerce, which doubles as our regional marketing
organization. For most of that period Cranmore existed at the
pleasure of the banks, as did much of the town. Though blessed with
a historically faithful clientele, skiers could no longer resist the
lure of areas with bigger, faster and more modern equipment. LBO
changed that. In my real estate business I have been able to observe
the LBO effect perhaps more closely than most. I've seen people
buying here this year with confidence again in Cranmore's future.
And North Conway's. That can all end if this decision is allowed to
stand.
The decision to make LBO divest of Cranmore must have been made
solely by mathematics: LBO has such and such percentage of the
market, therefore it must be harmful to the ski industry and/or
skiers. Believe me when I say, should the ruling be enforced, a
whole town will suffer.
I would ask those that made the ruling visit the elephants of
the American and Canadian skiing west and then take a look at the
little mouse-like knoll we call Cranmore.
Sincerely,
Charles Peter Pinkham.
cc: Congressman Bill Zeliff
Beth C. Lincoln
June 21, 1996.
Dear Mr. Conrath: I am very much in favor of the Justice
Department's action to force the sale of Mt. Cranmore by Les Otten.
LBO is only interested in profit, and apparently has no concern
for people or the community. He has clearly demonstrated
[[Page 56004]]
this, and his lack of integrity, by his actions at Athtash-Bear
Peak. He attempts to manipulate the community by deceit and smooth
talking. He charges premium prices and pays almost minimum wages (as
well as no benefits, and hour by hour layoffs).
I am a very private person, & do not wish my name used publicly.
However, I did wish to express my approval of your action.
Sincerely,
Beth C. Lincoln,
Box 119, Bartlett, NH 03812, 603-374-6033
Dr. Theodore Goldberg
June 21, 1996.
Dear Mr. Conrath: I have not seen or felt such enthusiasm either
on Mt. Cranmore or in the Valley as was shown this past winter under
Les Otten's ownership.
My children & grandchildren learned to ski on Cranmore & we have
been dismayed at the determination over the past 15 years.
Since the Otten [mgmt] purchases the mountain a feeling of
revitalization has taken hold in the entire valley. If he is not
allowed to continue this progress the area will revert to lethargy.
Sincerely,
Dr. Theodore Goldberg,
Box 283, N. Conway, NH 03860
Charlotte Emmel
June 21, 1996.
Dear Mr. Conrath: This is to strongly urge that the Justice
Dept. reconsider its decision to force Les Otten of LBO Enterprises
to divest itself of Cranmore Mt. before SKI Limited can be acquired.
This news was devastating to this area (Mt. Washington Valley
where Cranmore is located in North Conway). For years Cranmore has
been steadily going down hill because the different owners simply
did not have the funds to improve the mountain to make it
competitive. This has cost many jobs and has had an effect on the
tourist industry which the area relies on. When LBO purchased
Cranmore last year, I believe everyone, without exception, was
overjoyed--residents of the area and skier visitors alike. He pumped
money into it and everyone was very excited about the plans he had
to further develop the mountain. You may be delivering a death blow
to the mountain if you carry through on forcing LBO to divest itself
of Cranmore--and I beg you to reconsider.
Sincerely,
Charlotte Emmel
Evelyn Whelton
June 21, 1996.
Craig W Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H St., NW., Washington DC 20530
Re: Divesting, Cranmore Mountain, North Conway, NH
You are dealing with a ski resort in New Hampshire, that was
dying and bringing the town down with it. We finally found someone
that was willing to make a commitment to all of us and make this the
first rate ski area it used to be.
The bottom line here is this:
The future of the New Hampshire Ski industry
The future of Mt. Washington Valley
The future of all who live here and struggle to make a living
Please look this over again and I am sure you will recognize
that as a small community we can only benefit letting LBO keep
Cranmore Mountain.
Thank you,
Evelyn Whelton,
PO Box 176, Madison, NH 03849.
Beverly Mellen
June 21, 1996.
Craig W Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H St., NW., Washington, DC 20530
Re: Divesting, Cranmore Mountain, North Conway, NH
You are dealing with a ski resort in New Hampshire, that was
dying and bringing the town down with it. We finally found someone
that was willing to make a commitment to all of us and make this the
first rate ski area it used to be.
The bottom line here is this:
The future of the New Hampshire Ski industry
The future of Mt. Washington Valley
The future of all who live here and struggle to make a living
Please look this over again and I am sure you will recognize
that as a small community we can only benefit by letting LBO keep
Cranmore Mountain.
Thank you,
Beverly Mellen,
PO Box 484, Intervale, NH 03845.
Lawrence Markey
June 21, 1993.
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street, Washington, DC 20530
Dear Sir: I am writing regarding the Justice Department's
decision to require the LOB holdings to sell the Cranmore Ski areas
in North Conway, NH particularly. The past year of ownership, LOB
has not only turned around the flagging ski area but has done a
great deal for the Mount Washington Valley area. To require the sale
of this area by a courageous true entrepreneur would be disastrous
for the community. He has plans far beyond the ski area that can
only benefit this area. Reading about this action I have noted that
currently LOB owns a mere 25% of the Northeast ski industry and 6%
of the national ski industry. This hardly constitutes a monopoly.
I desperately ask that you reconsider the demanded sale of Mount
Cranmore ski area. I am a skier and resident of the Mount Washington
Valley area and fully support what LBO has planned for this area.
Please Reconsider and Reverse Your Decision.
Lawrence Markey
ccs: Rep. Bill Zeliff
Sen. Judd Gregg
Sen. Robert Smith
Gary P. Farmer
June 21, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street, NW., Washington, DC 20530.
Dear Mr. Conrath: I am writing to ask your assistance in
reversing the senseless bureaucratic decision by the U.S. Department
of Justice forcing the divestiture of Cranmore Mountain by LBO
Enterprises.
As a neighbor to Cranmore and long time skier of New Hampshire
mountains including others owned or to be owned by LBO, I do not
believe the Antitrust Division understands the status of the ski
industry in New Hampshire nor the decline of Cranmore Mountain until
it was purchased by LBO this past ski season.
I do appreciate the mission of the Antitrust Division and its
role in maintaining completion and protecting the consumer, but this
is a case where allowing the consolidation to proceed will do just
that.
I say this because economies of scale in the ski industry are
necessary to reduce overall operating costs in an industry where
skyrocketing ticket prices in recent years have forced many families
to give up this recreational opportunity.
Cranmore is unique. It's place in history has been documented
but it's importance to the local economy is less well known. As a
local businessman in North Conway, I can assure you that the decline
of Cranmore had a significant impact on State tax revenues and local
incomes. This past year, with the substantial investments made by
LBO in Cranmore, this situation has turned around. The business
community showed their enthusiasm for and confidence in LBO by
planning additional economic expansion. This has been destroyed by
the Justice Department's proposed consent order.
I do not believe the Antitrust Division understands that New
Hampshire ski areas compete regionally within the state namely the
Sunapee, Franconia and Mt. Washington Valley regions. Geographic
distances and natural obstructions define these regions. Therefore
skiers choose a region first then a ski area within that region. If
Justice understood this, then they would know that the number of
areas owned by American Ski Company (LBO) only affects the economies
of scale and marketability of the areas, it does not diminish
competition. The exception would be owning multiple areas within the
same region. This does occur since Attitash and Crandmore are within
Mt Washington Valley.
However, LBO owned both there areas one season prior to the
merger and all areas within the region flourished. Wildcat Mountain
reported a 30% increase in skier visits, Black Mountain successfully
emerged from bankruptcy and for the first time in a long time, all
areas in the region were profitable. The reason is that LBO has
breathed new life with the region because of their investments in,
marketing of, and commitment to the Valley. These areas do not
compete on price. Each has established
[[Page 56005]]
its own niche based on terrain, amenities, teaching techniques and
size. Each has successfully marketed itself by aiming at its niche
demographics.
The bottom line is that the Department of Justice does not
understand the ski business in New Hampshire and I am asking that
you review the Consent Order and avoid making a mistake which will
have an adverse affect on the consumer and the general economy of
the region.
Thank you for your consideration. If you would like to discuss
this further please feel free to contact me at the above address.
Very truly yours,
Gary P. Farmer
cc: Congressman Bill Zeliff
Senator Judd Gregg
Senator Bob Smith
Mrs. Bradford Lewis Boynton
June 21, 1996.
Craig W. Conrath,
Chief of Merger Task Force, Anti-Trust Div., US D.O.J., 1401 H St
N.W., Washington DC 20530.
Dear Mr. Conrath: We were horrified to read our local papers
that the Justice Dept. is forcing L.B.O. to sell Cranmore Mt., a ski
resort in our village of No. Conway, so they have demanded that to
our several if not many Ski Resorts or Areas is a monopoly. Ski
business is not AT&T or any other large enterprize. It is a highly
expensive recreational operation of making, snow trails and skiers,
and getting people to use your mountain. It does not depend upon a
monopoly of areas but on incredible know-how. In the case of
Cranmore Mt., never has it been such excellent skiing as this year
under LBO and the little town of North Conway would be a winter
ghost town without Les Otten. He is a skier. He knows the ski area
business. Please, please rescind this foolish order of having to
sell out. We have skied at Cranmore since it opened in 1939 and we
know how badly off Cranmore Mt. got before Les Otten put his know
how to this area.
Sincerely,
Carol J. Boynton
Bradford L. Boynton
Bill Glenn
Craig W. Conrath,
Chief of Merger Task Force, AntiTrust Division, US DOJ, 1401 H
Street, NW., Washington, DC 20530.
Re: Justice v. LBO Enterprises
Dear Mr. Conrath: It does not help competitiveness in the skiing
industry to force LBO to give up their two weakest properties.
Sunday River and Killington would be far better choices. LBO should
be required to keep Cranmore for ten years.
There is a philosophy that says if one is going to be inspected,
provide something pleasant for the inspector to find so he will not
discover an unpleasant something else. Using this philosophy, LBO
could have acquired Cranmore just to have something to give up to
the Justice Department.
Sincerely yours,
Bill Glenn
Herbert H. Whittemore
June 21, 1996.
The Honorable Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street, Northwest, Washington, D.C. 20530.
Dear Mr. Conrath: I am writing to object in the strongest
possible way to your decision requiring Mr. Leslie B. Otten's LBO
Enterprises to divest Cranmore Mountain Ski Area in North Conway,
N.H., and Waterville Valley Ski Area in Waterville Valley, N.H., in
order to merge with SKI Limited.
I disagree with your apparent premise that Mr. Otten, by owning
three ski areas in New Hampshire, could monopolize ski ticket prices
or packages, harming skiers or competing ski areas.
I know you and your staff are concerned with the common good of
all parties: The skiers of New England, other ski areas, as well as
Mr. Otten and his employees. And I thank you for that!
But I contend that allowing Mr. Otten to retain control of
Cranmore and Waterville is crucial to skiers, to the economy of the
Mount Washington Valley, Conway, N.H., and Waterville, N.H.
As you may know, Cranmore was in bankruptcy or losing money for
the better part of a decade before Mr. Otten took over and turned
the area around with a huge investment in lift, snowmaking and other
equipment. Thanks to him, the mountain is recovering, skiers had a
great year, and valley communities benefited greatly. I must point
out that Cranmore is an economic linchpin and recreational jewel in
Conway, N.H.
Mr. Otten rescued Cranmore, as he did Attitash Ski Area in
neighboring Bartlett, N.H. I believe that Mr. Otten is good for
skiing--no, make that great for skiing and for skiers!
That conclusion is based on 41 years of skiing; I first strapped
on skis in 1954 at Cranmore and I've been going downhill ever since.
I am a retired newspaper editor and wrote twice-weekly winter ski
columns for the Lawrence (Mass.) Eagle-Tribune for 17 years.
I recall interviewing Mr. Otten in 1980 for a column when he
bought and began developing Sunday River Ski Area in Maine. Then, it
was a minuscule area. Today, it is simply the best; a jewel in the
Maine economy; a wonderful playground for skiers.
In that 1980 interview, Mr. Otten laid out a projection of what
he hoped to do with Sunday River. I went away from that interview
trying to keep my objectivity intact, but torn between wondering
whether Mr. Otten was a ski visionary or just spouting pipe dreams.
Well, let me tell you that those plans for Sunday River have all
come true, and much, much more!
Quite simply, I believe Mr. Otten is the most exciting and best
thing that I have witnessed in my 41 years of skiing.
It would be a sad and harmful thing, indeed, to deny Cranmore
and Waterville their opportunity to be part of Mr. Otten's dynamic
plans for skiing. And it will most certainly harm the economies of
their communities and the many employees of the two areas because,
without Mr. Otten, they are likely to slide back into bankruptcy.
It has been my observation that Mr. Otten's way of doing
business is NOT financially harmful to the price of lift tickets.
His way of doing business is simply better than that of other areas.
He makes lots of snow, keeps making it to improve conditions, runs
his areas with great care and concern.
Skiing, by its very nature, is an expensive sport. A skier's
personal equipment is costly. A well-equipped skier can be wearing
anywhere from $1,000 to $3,000 in gear. So, too, are lodging, meals,
and transportation. The point I am trying to make is that the price
of a lift ticket is a relatively small part of the individual
skier's cost.
It is doubtful, in my mind, that, with three ski areas in New
Hampshire, Mr. Otten could monopolize the ski industry in the
Granite State. In fact, I believe that by depriving him of the right
to run Cranmore and Waterville, you will be hurting the economy of
New Hampshire (where tourism is the Number 2 industry). You will be
hurting skiers, because, clearly, no one provides better skiing
conditions than Mr. Otten.
That is one skier's view of the situation. I hope that by
sharing it with you, you may reconsider your earlier action and
change your position regarding divestiture. I thank you for your
patience in considering these remarks.
I should say that I have no connection with LBO Enterprises or
SKI Limited. I am simply a retired newsman living in the Mount
Washington Valley and loving the skiing at Attitash Bear Peak
Cranmore and Sunday River. And I am thankful for brilliant men like
Mr. Otten and Mr. Phil Gravink, the masterful CEO of Attitash Bear
Peak Cranmore. And that is why I write.
Sincerely,
Herbert H. Whittemore,
P.O. Box 204, Intervale, N.H. 03845.
The Bumsted Agency
June 21, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street NW., Washington, DC 20530.
Re: Mount Cranmore Ski Area, North Conway, NH 03860.
Dear Mr. Conrath: I was very upset to hear that the Justice
Department was requiring LOB Enterprises to divest itself of
Cranmore and Waterville Valley.
As a resident of Kearsarge (a suburb of North Conway) I am
primarily concerned with Mount Cranmore. This mountain has been
through a great deal since I moved here in 1973. When Les Otten
purchased it and started to pour money into it, it seemed that at
last its troubles were over.
It makes little sense to me to prohibit LBO from owning Cranmore
because of the possibility of lack of competition. We have a number
of other ski areas in the Valley should Mr. Otten elect to make his
prices non-competitive. Wildcat, Black Mountain, and King Pine all
offer a variety of skiing for all abilities.
[[Page 56006]]
Although I can see the need for monitoring corporations which
supply goods to the public to keep competition alive, I feel that,
in this case, which covers a recreational situation, the Justice
Department has over-stepped its bounds.
Sincerely yours,
Bartram W. Bumsted
Country Cabinets, etc.
June 21, 1996.
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street NW., Washington, DC 20530.
Dear Mr. Conrath: The forced divestiture of LBO's ownership of
Mt. Cranmore and Waterville Valley as a condition required by the
DOJ for it to allow the merger of LBO Enterprises and S-K-I Ltd. has
the potential of having a very negative impact on our town and its
business climate.
The analysis of the situation seems to be flawed in the
assumption that LBO would have a monopoly thus eliminating a
competitive environment for the consumer. LBO knows, however, that
it is dealing with a savvy consumer and that charges can be only
what the market will bear. Although LBO currently owns Attitash/Bear
Peak/Cranmore, the daily ski rates are different at each mountain.
Each area has different amenities that dictate charges accordingly.
There are also other mountains in the immediate area which offer
alternatives of price as well as types of skiing and snowboarding
experiences.
Being business owners in North Conway and members of many
organizations including the Mount Washington Valley Chamber of
Commerce, we can attest to the fact that LBO is very community
minded and has added greatly to the marketing of our ``Valley''. We
know that LBO is strong and that Cranmore will continue to thrive
under its involvement. Cranmore is a ski area that had no investment
for years and was deteriorating. Finally, along came LBO willing to
work hard and put money into making it a first-rate ski area! To
have another entity take over such an important facet in our town is
risky. We know and like what we currently have!
Lastly, we are very concerned about local jobs being affected by
this change. Our economy is mainly dependent upon tourism and LBO's
ability to market our area as a whole will certainly be diminished
with it's loss of Cranmore's income. Our Chamber has suffered over
the past 8 years due to a poor economic climate. LBO's marketing
efforts and support of the Chamber's marketing programs has been
much appreciated.
Please reconsider and reverse your requirement that LBO must
sell Mount Cranmore. Thank you for your consideration.
Sincerely,
Richard and Joy Check
Senator Bob Smith, Senator Judd Gregg, Congressman Charlie Bass,
Congressman Bill Zeliff.
John E. Hogan
June 22, 1996.
Craig W. Conrath,
Chief Merger Task Force, U.S. Dept of Justice, Washington, D.C.
Dear Mr. Conrath: I am writing re the recent decision re the
merger of LBO Enterprises & Ski LTD that they must sell off Cranmore
Ski Area in North Conway. This decision made, I'm sure, because they
also own Attitash/Bear Peak which is also in Mt. Washington Valley
area.
I'm just hoping that you will give this a bit more consideration
and possibly allow them to retain this property along with Attitash/
Bear Peak. Just a bit of history. Cranmore was the first ski area in
Mt. Washington Valley, it is located right in the center of town; it
is rather historic, especially to skiers, in that it had the first &
only Skimobile to get skiers to the top; it brought Hannes Schnieder
over from Austria to escape the Jewish situation ad he started one
of the first ski schools in U.S. introducing his new method of
teaching skiing. I sort of refer to it as the Lily of the Valley
when it comes to skiing.
Unfortunately in the past 10 or 12 years (or more) it was not
being cared for and was running down rather badly. It finally wound
up in the banks hands and they were doing nothing other than trying
to run it until they found a buyer. Within a year of buying
Attitash/Bear Peak Les Otten took over Cranmore and immediately
started pouring money into putting in a great new lift, much work on
trails, lodge building and snowmaking and making it once again a
focal point in the Valley.
He now runs two great areas in the Valley and has been benefit
to the Valley. There is another major ski area about 20 miles from
North Conway known as Wildcat. I understand your concern re
competition & pricing but this is a perfect example that he is not
out to destroy anyone. Because of the extensive advertising that LBO
Enterprises does Wildcat benefited, as did the Valley as a whole, so
much so that Wildcats receipts were up almost 30% this past season.
(It helped that because of the competition they were also forced to
finally do some upgrading to their area!) Les Otten, it seems does
not compete by price, but rather feels it more important to give
value for what he charges.
Wildcat's prices are lower, especially weekdays & Sundays and
they have 2 for 1 specials on Wednesdays. Les Otten has never tried
to compete with that it seems. He just seems (I do not know the man
nor have I seen him) to try to be fair. I have a lifetime pass at
Attitash and when he took over, there was some concern that they
would continue to be honored. It turned to be not a problem at all
and we were even extended the right to also ski Cranmore on our
pass, something he definitely did not have to do.
I'm just afraid that if he is forced to sell Cranmore that it
will once again go into a nose-dive and may wind up closing. That
would be a terrible, terrible loss to the Valley and, from my
viewpoint, an historic loss.
I just don't believe that owning the two areas here puts him in
an extraordinary competitive position. This is just a case where LBO
Enterprises is truly good for Mt. Washington Valley and GREAT for
Cranmore.
I for one hope that you will reconsider your position on this
matter. Thank you for your time in reading this letter.
Sincerely,
John E. Hogan,
PO Box 488, Intervale, NH 03845.
Lawrence Fouraker
June 22, 1996.
Mr. Craig W. Conrath
Chief, Merger Task Force, Antitrust Division, US Department of
Justice, 1401 H Street NW., Washington DC 20530.
Dear Mr. Conrath: We are presently full-year residents of the
Mount Washington Valley, New Hampshire. (Next year we will be
weekend visitors, as I will join the faculty at Wellesley College.)
I am writing to protest the foolish and incomprehensible antitrust
ruling against Mr. Les Otten of LBO Enterprises. Last winter we had
season passes that were valid at both Mr. Cranmore and Mt. Attitash/
Bear Peak. Far from being anti-competitive, it is a great boon to
both areas to have interchangeable tickets.
We are also far from sanguine that another owner will prove able
to continue Les Otten's multimillion dollar investment program that
turned Cranmore from a run-down, struggling area threatened several
times with bankruptcy into an exciting fairly-centered tourist draw
for the businesses in the area. Wildcat is a potential buyer, but
they have hardly maintained equipment and facilities there, and I
don't see how they can do so at Cranmore. Thus, your decision may
well push a recovering ski area right in the middle of our community
back into financial trouble and possible bankruptcy. That would
certainly not stimulate competition. I have studied economics at the
graduate level and am well aware of the benefits of a competitive
marketplace. The airline industry and the telecommunications field
are two clear examples where consumers--and the U.S. economy--have
benefitted from the actions of your colleagues. But alpine skiing in
New England is clearly not such a case. The many happy customers of
Mr. Otten--and, surprisingly enough, every single employee I have
spoken with--implore you to reverse this stupid ruling.
Lawrence Fouraker, Ph.D,
P.O. Box 726, Intervale, NH 03845.
Thomas L. & Grace N. O'Connor
June 23, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, US Department of
Justice, 1401 H. Street NW., Washington, DC 20530.
Dear Sir: We are asking the Department of Justice to reconsider
its recent decision in the matter of the merger LBO Industries and
SKI Ltd. that requires LBO Enterprises to divest from its holdings
The Cranmore Mountain Ski Area. We feel this would have a negative
impact on the quality of skiing available in the Mount Washington
Valley as well as on the local economy.
Within an approximate 40 mile radius of North Conway, where
Mount Cranmore is situated, there are seven ski areas, only two
which would be owned by LBO Enterprises. This is surely a very
competitive market.
In the year of ownership under LBO Enterprises, the skiing
improved dramatically
[[Page 56007]]
and has never been better in the previous 25 years we have skied the
mountain. Without the financial backing available to a large and
successful operator in the ski business we feel the viability of
Cranmore is in jeopardy. Further improvements planned by LBO will
not be forthcoming, the business will fail and competition will be
reduced.
Sincerely yours,
Thomas L. O'Connor
Grace N. O'Connor
cc: Representative William Zeliff,
Senator Robert Smith,
Senator Judd Gregg.
Arthur J. Brissman and Barbara A. Brissman
June 23, 1996.
Craig W. Contrath,
Chief, Merger Task Force, Antitrust Division, US Department of
Justice, 1401 H. Street NW., Washington, DC 20530.
Dear Chief Conrath: The 1995-1996 Ski season at Cranmore
Mountain, No. Conway, New Hampshire was the very best skiing we have
had for a long long time.
The upkeep and economic worth of Mt. Cranmore had been on a
serious decline for the past several years and now, finally, in
1995, LBO, Les Otten, purchased the mountain and put money into it.
Even though he has been involved for only a year now, we, the
community, have already seen the value of commitment from somebody
willing to make Mt. Cranmore and the Mt. Washington Valley a first-
rate ski area.
Needless to say, we are devastated to learn that Mr. Otten has
been instructed to divest Mt. Cranmore in order to acquire SKI
Limited. We, among many, believe this would be a serious mistake and
are concerned about Cranmore's future if LBO is forced to sell the
mountain.
It is our most urgent request that you reconsider and reevaluate
your directive that LBO must sell Cranmore Mountain.
The merchants, innkeepers, and all of us dedicated skiers
believe the future growth and return of a strong economy in this
area depend on your revised decision to allow LBO to continue with
his plans and improvements in the Mt. Washington Valley.
This letter is respectfully submitted and thank you for your
attention to this matter.
Very truly yours,
Arthur J. Brissman
Barbara A. Brissman
Harold C. Fisher
June 23, 1996.
Re: Cranmore Mtn.--LBO Holdings
Dear Mr. Conrath: I am writing you in regard to your decision to
force LBO Holdings to sell Cranmore Mtn. because of the potential
for price fixing. While I can understand this possibility to some
extent, I think you should consider more carefully the ``big
picture''.
Cranmore has always been a good ski area because of its location
near the center of town. The previous owners weren't able or willing
to invest sufficient capital in the mountain to make it a profitable
enterprise. Because of the limited size of the mountain, I think it
requires a tie-in with another ski area in order to make it viable.
LBO did this. They installed a new high speed chair lift and made
the tickets interchangeable with Attitash, just 20 minutes away. As
a result, business boomed last year and the valley benefited
greatly. The point I want to make is that whatever risk may be
involved with price fixing, I believe is overshadowed by the
benefits to the town and valley by having Cranmore a successful ski
area.
Wildcat Mtn. is an excellent ski area, only about 40 minutes
from Cranmore. King Pine and Black Mtn. are smaller ski areas
nearby. Competition from these mountains should help to keep prices
in line.* LBO is doing a first class job in promoting skiing in our
area and the economic benefits are widespread. Before you definitely
decide to force the sale, I hope you will give full consideration to
the impact on our local economy.
Sincerely,
Harold C. Fisher.
*P.S. I forgot to mention Bretton Woods and Shawnee Peak are \1/
2\ hour from Cranmore.
The letter from Professor Stephen F. Ross was withdrawn by
commentor.
The letter from Bruce, Patricia and Carolyn Todd was not able to be
reprinted in the Federal Register, however, it may be inspected in
Suite 215, U.S. Department of Justice, Legal Procedures Unit, 325 7th
St., N.W., Washington, D.C. at (202) 514-2481 and at the Office of the
Clerk of the United States Court for the District of Columbia.
Town of Conway
June 24, 1996.
Craig W. Conrath,
Chief, Merger Task Force, Anti-Trust Division, U.S. Department of
Justice, 1401 H Street NW., Washington, DC 20530.
Re: LBO/SKI Ltd Merger; Cranmore divestiture.
Dear Craig: This letter is in reference to the forced
divestiture of Cranmore from LBO/SKI Ltd, to be known as the
American Ski Company, by the U.S. Justice Department. The Justice
Department's requirement that LBO/SKI Ltd sell Cranmore as part of
the merger of the two companies will cause a tremendous decline in
the alpine ski industry and in the local and regional economies of
Conway and the Mount Washington Valley.
As the Planning & Economic Development Director for the Town of
Conway, I can assure you that last years' purchase of Cranmore by
LBO was met with extreme enthusiasm by the Town of Conway as well as
the towns surrounding Conway. Understand that Cranmore is a very
small, family oriented ski resort; the likelihood of it succeeding
as a stand-alone resort would be slim at best. To date, LBO has
invested in excess of four million dollars into Cranmore, and had
plans for further expansion of both the skiing and resort amenities.
This past years' success at Cranmore was only made possible by the
ownership of the resort by LBO. Simply put, LBO has the means and
the experience to make Cranmore succeed.
Regarding the Justice Department's concern about the increase in
ticket prices as a result of the merger, the answer to the question
is very complicated. The merger of LBO/SKI may, in fact, cause a
reduction in ticket prices, as there is certainly an economy of
scale created by owning several mountains. Additionally, ticket
prices alone may not be a true reflection of what consumers are
getting for their money; for instance, LBO's vast expansion of
Attitash provided a great many additional skiing opportunities while
ticket prices rose only slightly. Lastly regarding unwarranted price
increases; alpine skiing has been, and may always be an expensive
form of winter recreation. If the merger of LBO/SKI results in a
significant ticket price increase, a great number of skiers will be
priced out of the market, an already small market, which will result
in a decrease in company revenues. LBO has, and I believe will
continue to attract new participants to the sport by providing a
great product at prices which are competitive with other resorts,
and which are competitive with other winter recreation
opportunities.
Please reconsider your decision to force the sale of Cranmore,
it will devastate Conway's economy.
Thank you in advance for your time and consideration on this
very important matter.
Yours sincerely,
John D. Krebs,
Planning & Economic Development Director.
Richard J. Fraser
Craig W. Conrath,
Chief, Merger Task Force, Anti-trust Division, U.S. Dept. of
Justice, 1401 H Street N.W., Washington, D.C. 20530.
Dear Mr. Conrath: With regard to the merger of S-K-I Ltd. with
LBO Enterprises (American Skiing Corp.) I wish to register my
objection to the Justice Dept. requirement for divestiture of the
Waterville Valley and Cranmore ski areas as a condition for
approval. My objection is based on the following facts:
a. Both of these areas are most needful of major facility
upgrades, having recently gone through bankruptcy proceedings and
ownership changes. Each will be left to fend for themselves in a
market that demands large capital investments, solely the domain of
such large corporations as American Skiing, Interwest, ect.
b. The above named divestitures (especially Waterville Valley)
have slipped greatly in their total skier visits in the 1995-96
season, in spite of an excellent snow year, compared to other areas
due to the lack of upgraded facilities. It follows therefore, that
if major capital infusion is not forthcoming to improve the skiing
experience for the day/weekend skier, that the intent of the ruling
will be moot, with these areas not able to provide either an
affordable, or more important, quality skiing which is vital to this
high risk sport.
c. Beyond the affordable skiing factor involved in the ruling is
the economy of the surrounding communities, still struggling with
the real estate/economic downturn that has hit these two regions
hard. Forcing yet another change of owners will only delay
[[Page 56008]]
needed improvements, further eroding their attractiveness to these
very skiers that the Justice Dept. is trying to protect.
In light of these subjects, I maintain that this decision will
have just the opposite intended effects of providing skiers with
competitive rates. In the ski business, it is not just cost that
drives, but the quality experienced is every bit as important, as
most skiers would testify. A lower cost area with sub-standard
facilities would be a bad trade off with the likelihood of not
having the skier return, only to have the same person travel to the
higher ticket price area next time seeking superior facilities.
I ask that the Justice Dept. reconsider this ruling. New England
has lost numerous smaller affordable areas for the above reasons.
Please do not let these areas go the way of their predecessors.
Richard J. Fraser,
3 Applewood Lane, Franklin, Ma. 02038.
Stanley P. Wilson
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Dept of Justice,
1401 H Street NW., Washington, DC, 20530.
Re: Consent Decree.
Dear sir: Please do not force LBO to divest Cranmore Mountain or
Waterville Valley. At first, we too were doubtful of LBO's
intentions, and we were unsure of our town's future. However, in one
year, and with a huge investment, Cranmore showed a profit, summer
use is returning, and most importantly to us, local business is
booming.
The nature of the skiing business in the years ahead is about to
be defined by LBO, and, quite frankly I don't know what that
definition is, but it involves maximum use of our stores, our
lodging, our dining facilities. In short it brings business to us
and no one can do it as well as LBO.
Sincerely,
Stanley P. Wilson,
Box 328, Intervale, NH 03845.
Conway Seat Cover Company
June 25, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, U.S. Department of Justice.
Dear Mr. Conrath: I'm writing in response to the possible forced
sale of Waterville Valley and Cranmore Mt.
The idea that the retention of these area's by LBO Enterprises
would contribute to the monopolizying of the ski & snowboard markets
in these two area's is a real stretch.
Firstly, I would like to point out, as I'm sure others have,
that both of these areas are located quite near, by skier standards,
to many other area's.
Cranmore has Blade Mt., Shawnee Peak King Pine & Wildcat all
within a half hour drive.
Waterville has Gunstock, Cannon Mt., Loon (which is a huge
operation) and many areas to the south which have to be passed by
our southern N.E. Friends before that reach us.
Along with my full time business, which does not cater to the
tourist directly, I am a part time ski instructor working at
Attitash for LBO. I'm a member of the Professional Ski Instructors
of America and have been skiing in this Valley for almost 40 years.
I have been around to see many changes, most not good as the
skiing industry in this area has seen little growth and has been
going slowly downhill for years, (no pun intended).
In the short time LBO has been involved things have turned
around dramatically.
Will the cost of skiing go up? Probably but only in relations to
improvements.
Can he control pricing? I doubt it. The average skier can only
go so far in paying for this sport and he or she are about there.
The price controls in this sense are built in.
Give the business man in this area a break and leave things
alone. We need this company, he is successful and success breeds
success.
As I mentioned I don't deal directly with the tourists, but my
business reflects on the Success of this town.
I teach skiing because its fun and I enjoy it. With LBO I think
it can only get better.
Thanks for your time.
Sincerely yours,
Joseph C. Webb
Dan Robinson
June 25, 1996.
Craig W. Conrath,
Chief of Merger Task Force, Antitrust Division, US Dept. of Justice,
1401 H Street, NW., Washington, DC 20530.
Dear Craig: I oppose the ATD's recommendation that Cranmere Mtn.
and Waterville Valley be sold off to the recent LBO purchase of Ski
Ltd. The truth is Lbo Enterprises delivers a better ski package than
Cranmere [of] Waterville could ever hope to do on [there] own. I
know--I've skied most of my 43 years and have had numerous seasons
passes. Waterville with Tommy Cochran at the helm for 29 years just
plain wasn't keeping up--LBO Enterprise is the perfect outfit to run
Waterville and could deliver world class skiing that we skiers
deserve! Prices are basically the same at most ski areas--all things
considered, besides were talking descretionary dollars. Terrain &
location dictate who your customers will be in the Ski World more
than ticket prices and ownership. I've skied Cranmore all my life
and since LBO took over skiing there has never been better. Please
reconsider your actions--as skiers, we would be getting an Anti
Trust Shafting just when things finally were looking up. I can't
tell you how [unbelievably] frustrating It has been to be a ski
fanatic and live in New England. From bad snow years to poor or slow
capital improvements--It's always been something. LOB in the past 6
years or so has raised the bar that most major ski areas have to
clear to stay competitive. The length to consumers has been a
dramatic improvement in Ski conditions at all competing areas. LBO
has been very, very good to us and for New England skiing. No matter
what you--Craig ultimately decide to do I'm going to invest my
skiing dollar in LBO as they deliver By far the best skiing in New
England. Let them expand this marvelous operation unhindered so
others can experience LBO Skiing--skiing the way it should be.
Thank you,
Dan Robinson,
525 Ocean House Rd., Cape Elizabeth, ME 04107 and Bethlehem NH, winter.
If you wish to discuss this matter with a real skier I can be
reached at 207-799-4729.
Peter B. Ward
June 25, 1996.
Craig W. Conrath,
Chief of Merger Task Force, Antitrust Division, US DOJ, 1401 H
Street, NW., Washington. DC 20530.
Dear Mr. Conrath: Please don't let the brevity of this note
belittle the very strong opposition I'm extending to you regarding
the Department of Justice's recent divestiture ruling on LBO's
forced sale of Mt. Cranmore in North Conway, New Hampshire. As you
may be aware, Mt. Cranmore is the ``Mecca'' of skiing in this
country, and over the years it has experienced good and bad times.
With the arrival of Les Otten on the scene, this wonderful ski area
finally has the opportunity to become a profitable operation,
serving its community of faithful patrons in the manner originally
intended by Harvey Gibson and Hannes Schneider.
Please do everything possible to reverse this absurd ruling so
that Mt. Cranmore may continue to thrive under strong and
knowledgeable leadership. Washington Valley needs this attraction,
and people such as myself, who have skied Mt. Cranmore since the
late '30s, welcome Les Otten and his expertise!!!
Please be thoughtful enough to respond to this plea.
Respectfully,
Peter B. Ward,
60 Bridge Street, Manchester, MA 01944.
Dick Smith, Photography
June 25, 1996.
Mr. Craig W. Conrath,
Merger Task Force, Antitrust Division, U.S. Department of Justice,
1401 H Street NW., Washington, DC 20530.
Dear Mr. Conrath: I am sure that it was with good intent that
the Department of Justice's decision to require LBO to divest itself
of Waterville Valley Ski Area and Mt. Cranmore. I can only speak for
Cranmore as I live in North Conway.
Cranmore Mt. has gone through at least two owners and has been
on the verge of bankruptcy for 10 or more years. It was with great
relief and expectation to the residents and businesses when it was
announced that LBO was buying Cranmore. The ski industry is not
noted as a particularly profitable business and a bad winter in one
area can be devastating. Thus owning ski areas in different parts of
New England can spread the profits and losses of a particular area.
It is unlikely that the owner of one area has the resources to
withstand two or three bad winters. A new owner of Cranmore is
unlikely to have the resources to carry Cranmore through the bad
years and will be back in bankruptcy again dragging the local
economy down with it.
[[Page 56009]]
While competition is a noble principle, lowering ticket prices
can only hurt the bottom line and put Cranmore on the brink of
bankruptcy again.
I am afraid that your decision was too narrow and the overall
view of the local economy was not taken into consideration. I urge
you to reconsider your decision and allow LBO to retain Mt.
Cranmore.
Thank You.
Sincerely,
Dick Smith,
P.O. Box 300, Crestwood Drive, North Conway, New Hampshire 03860.
Robert L. Johnson, CPA & Associate
June 25, 1996.
Craig W. Conrath,
Chief of Merger Task Force, Antitrust Division, US Department of
Justice, 1401 H Street NW., Washington, DC 20530.
Re: LBO Enterprises' requirement to divest itself of Cranmore &
Waterville Valley
Dear Mr. Conrath: As I understand from the local papers, the
Justice Department is forcing LBO to divest itself of Cranmore and
Waterville Valley. I will outline several points why LBO should be
allowed to retain the above areas.
Will divestiture increase competition--I doubt it.
Both Cranmore and Waterville Valley have suffered through under-
capitalization and bankruptcies prior to purchase by LBO.
There is no reason to assume that future small mountain
operators will be able to withstand the capital needs to run free-
standing areas. Economies of scale that LBO has available include
substantial buying power when negotiating for the purchase of fixed
assets (i.e, lifts, supplies, electricity, etc.). LBO has an
excellent track record of investing substantial sums in areas that
they have purchased. LBO puts its money where its mouth is.
The consent decree assumes that Cranmore and Waterville Valley
can survive on their own. I have no doubt, based on prior histories
of both ski areas, that the opposite is likely to be true. Without
the buying power and capital of a larger organization, both areas
are likely to return to their prior bankrupt ways. If both areas
return to bankruptcy, then the Justice Department has not solved
their perceived competition problem, but only limited consumers'
ability to choose where to ski.
Economic disruption for the communities dependent on Cranmore &
Waterville Valley.
Under the assumption that Cranmore and Waterville Valley could
not survive without LBO, then the local communities will suffer
accordingly. The Federal Government spends hundreds of thousands of
dollars a year in our rural areas to promote the economy. The
divestiture decision seems short-sighted. Again, LBO has a proven
track record of investing in the ski areas with a positive fallout
within the local community.
Even if these small areas survive, they are likely to `'limp
along'' with no competition impact to the industry.
This merger will provide substantial cost savings and allow for
survival or Cranmore and Waterville Valley.
Enclosed please find an article from the Wall Street Journal
entitled FTC to Weight Cost-Savings In Mergers, dated June 3, 1996.
Briefly, the article says that some mergers deemed illegal today
could be approved in the future with an appropriate study of the
cost savings involved in ``production, distribution, promotion and
other efficiencies * * * '' LBO has the ability to pool promotion,
capital expenditures, etc. to provide high quality skiing that would
otherwise not be available to small ski areas.
Sad to say, but Cranmore and Waterville Valley's bankrupt past
are proof positive that small areas are not economical to run.
If the Justice Department can find a better ski alliance for
Cranmore & Waterville Valley than LBO, I would like to see it.
Conclusion.
The industry is consolidating for the good and this
consolidation will provide stability for both skiers and the
surrounding communities which depend on Cranmore and Waterville
Valley.
I respectfully request that the Justice Department reconsider
its order for divestiture of Cranmore and Waterville Valley.
Very truly yours,
Robert L. Johnson, CPA/PFS,
Personal Financial Specialist.
enc. WST article 6/3/96--FTC Weigh Cost-Savings In Mergers.
cc: Senators Bob Smith & Judd Gregg, Congressmen Charles Bass & Bill
Zeliff.
The WST article of 6/3/96 was not able to be reprinted in the
Federal Register, however, it may be inspected in Suite 215, U.S.
Department of Justice, Legal Procedures Unit, 325 7th St., N.W.,
Washington, D.C. at (202) 514-2481 and at the Office of the Clerk of
the United States Court for the District of Columbia.
Crest
June 25, 1996
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street NW., Washington 20530.
Dear Mr. Conrath: I write this letter as a small businessman in
a small resort town who was deeply disappointed in the decision that
Cranmore Mountain must be divested from LBO Enterprises.
Having been in North Conway, New Hampshire for over 20 years,
I've seen the gas lines, 21% interest rates, no snow, and the
recession of the 90's. Through all these times, the question of
whether Cranmore would continue to exist was always present on
everyone's mind. For most of these years it was open, but not ready
or financially capable of attracting tourists to our area. After
twenty years, I thought we finally had some stability to our
economic base with the purchase of Cranmore by LBO Enterprises.
With the large capital investments that need to be made to
operate a successful ski area and the marketing acumen to attract
customers to the resort, there are few who can make this a
successful venture. You may feel that there are other buyers who can
offer the same, but in fact 20 years of experience indicates
otherwise. While your concern is preserving competition and making
sure that prices are competitive, you may in fact be doing just the
opposite. It is unlikely that anyone buying Cranmore would have the
purchasing power or management available. Consequently, the cost of
doing business for someone new coming in would be higher than for
LBO. Higher costs of doing business mean higher prices. No
interchangeability of tickets or choices means fewer visitors, after
all, there are other ski resorts or areas to visit that do offer
this. Furthermore, even with LBO owning two ski areas in the Mt.
Washington Valley there are still three other areas with three
different owners. Five ski areas with four owners does not seem to
have a monopoly over five areas with five owners.
I understand that your concern is with the skiers of
Massachusetts and there are still many choices for skiing available
to them in other non LBO ski areas. I wish the Department of Justice
was as concerned with the residents of the Conways/Mt. Washington
Valley in the 70's, 80's, and 90's when we had gas shortages and
bank foreclosures as they are now about the skiers from
Massachusetts. The skiers will always have choices; we didn't when
we faced gas lines, recessions, and bank foreclosures. We had an
increase in skier visits last year because of the investment and
value that skiers saw in our area due, in part, to LBO Enterprises.
We have started to see some economic revival in our area. Please let
the free enterprise system work.
I respectfully request that your allow LBO Enterprises to
continue its ownership and operation of Cranmore Mountain for the
benefit of skiers, its employees, the residents of the Mt.
Washington Valley, and for the State of New Hampshire.
Sincerely,
Robert M. Weiss,
Dealer Principal.
Robert McManus
P.O. Box 516, Jackson, N.H. 03846.
June 25, 1996.
Mr. Craig W. Conrath,
Merger Task Force, Antitrust Division, U.S. Department of Justice,
1401 H Street NW., Washington, DC 20530.
Dear Mr. Conrath: My comments are directed to your recent
position regarding the ownership of Mt. Cranmore in North Conway,
NH.
My wife and I are retired innkeepers and for many years we were
involved on a daily basis with the tourist related economy of the
area that we call the Mount Washington Valley. With its geographic
location, Mt. Cranmore is critical to the economy of the area.
When Mt. Cranmore went bankrupt a few years ago, the effect on
the area was dramatic. It was more than a loss of jobs and a drop in
the number of dollars in circulation. There was a deterioration of
the physical plant and the collective psyche.
The acquisition of the complex by LBO was even more dramatic.
The jobs came back. The economy took a boost. The region found a
sense of hope for the future. There was a
[[Page 56010]]
substantial capital investment and a level of management expertise
beyond the grasp of the usual ski area. I must add that Cranmore is
much more than a ski area. It is a delightful summer tourist
attraction. There are world class clay tennis courts and the only
indoor courts within 60 miles. There is a health club with constant
use by all age groups in the community.
Your proposal to require LBO to divest the Cranmore complex has
shaken the community to the core. I urge you to make a greater
effort to examine the economic and social impact of this decision on
the region.
Sincerely,
Robert McManus,
Ann McManus.
June 26, 1996.
Harry Stead
Craig W. Conrath,
Chief Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street NW., Washington, DC 20530.
Dear Mr. Conrath: I am writing to you to strongly protest the
Justice Department's ill founded ruling that is forcing LBO to
divest itself of Mt. Cranmore. I particularly found your Mr.
Biggio's response to the Conway Daily Sun interview (6/25/96 issue)
to be a typical Federal Gov't heavy handed response. Like; ``I don't
recall a circumstance when we have withdrawn'' stated Biggio. Since
when have you people become infallible?
For Mr. Biggio to state that you entered into a settlement in
concert with LBO was a joke you figuratively held a gun to his head.
Here's another quote from Mr. Biggio. ``All this happened before the
trigger was pulled'' and the assistant attorney general signed on to
a hostile lawsuit. Sounds like a threat to me!
As far as the Justice Dept filing a Competitive Impact Statement
detailing their rational and conclusions, I submit that the
Department does not have people that are knowledgeable enough in the
factors that are required to make an old small ski area with a
southern exposure in Mt. Washington Valley a successful venture. For
Mr. Biggio to say that his staff talked to a number of operators,
industry officials, as well as skiers is like taking a poll; the
results can be steered by the way the questions are phrased. Anyway
other operators & industry officials shouldn't count, only skiers
opinions count. So why didn't your Dept hire a professional poll to
[simple] ask the skiers at Mt. Cranmore during the Winter of '95-'96
as to how they rated it that season as compared to any of the past
15 seasons as to skiing conditions, amenities, cost etc etc; and
whether they felt that LBO ownership was good for the skiers of
Eastern New England. Not even if it was good for the economics of
the Valley.
If the Department's second concern is the economic impact on Mt.
Washington Valley then splitting Cranmore off from it's sister
Mountain, Attitash/Bear Peak will without a doubt have a negative
economic impact.
All Mr. Biggio's talk about the Justice Dept closely evaluating
every prospective buyer to assure that Cranmore is put in the hands
of a strong operator isn't anything more than pure rhetoric. I
submit that the Dept is completely incapable of such an evaluation
of prospective buyers; and secondly with a 180 day time limit on LBO
to sell, you'll sell to the first buyer that comes along with the
financial backing that will consummate a sale.
I know that you have received many letters that have taken a
very positive approach on why Cranmore needs to stay a part of the
LBO family for it to survive; and I had planned to write such a
letter until I read the interview of Mr. Biggio with his cavalier
attitude.
It's a sad state of affairs when the Federal Gov't spends our
tax money to meddle into an industry that is fueled by discretionary
spending and isn't ______ has been self regulating in a free market
environment? The two ski areas in the State that have the poorest
reputation are Cranmore Mt. and Mt. Sustapel both owned and operated
by the State of New Hampshire. If this State can't successfully
operate ski areas, what makes the Federal Gov't think that they can
regulate a ski area to economic success.
The Justice Dept should seriously consider all comments that it
receives before and during the 60 day public comment period. Why
ever have one if it's nothing more than a formality as indicated by
Mr. Biggio when he states: ``I don't recall a circumstance when we
have withdrawn publics faith in their gov't,'' if you truly
considered the negative impact that forcing LBO to divest itself of
Mt. Cranmore would have on Eastern New England Skiers.
Very truly yours,
Harry Stead,
Roberta M. Stead,
7 Glem Ellis Road, Glem, NH 03838-1268.
cc: Senator Judd Gregg, Representative William Zeliff.
Sandra W. Dahl
June 26, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street NW., Washington, DC 20530.
Dear Sir: I am writing to urge you drop the government's
insistence that LBO Enterprises divest itself of the Mount Cranmore
ski area. LBO has revitalized this area's oldest ski resort and
enabled the town to retain an important tourist attraction; to
require that this ski area be put up for sale again and therefore
into the hands of a corporation or person(s) with potentially less
business ability and/or commitment to regional growth and
development is absolutely ludicrous.
My concern about this action is more deep-rooted than the
potential damage to our local economy. My concern is that your
agency has seen fit to restrict the growth of vital, dynamic
organization which provides the general public a place to spend
purely discretionary income. Skiing, alpine slides and water-play
pools are not necessities of daily living; people are free to choose
where and if they ski and there are any number of areas in Maine.
New Hampshire and Vermont where one can choose to ski that are not
owned by LBO. My concern is that the anti-trust laws or restrictions
or whatever that type of thinking is called is being applied to a
business involved in the provision of recreational activities to
people who are free to choose when, if and where they participate in
those activities. As for other providers of those elective
activities, if they can do it better or at least as well, they will
get the business.
I am asking that the Justice Department throw out the consent
decree against LBO and allow private enterprise to continue to grow
unimpeded by governmental interference.
Very truly yours,
Sandra W. Dahl,
P.O. Box 789, Glen, N.H. 03838.
c.c. Rep. Zeliff, Sen. Gregg, Sen. Robert Smith, LBO Enterprises.
Robert C. Peterson
June 26, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Dept. of Justice,
1401 H Street NW., Washington, D.C. 20530.
Dear Mr. Conrath: It was with great concern and much confusion
that I recently read of your ruling against LBO Enterprises of
Sunday River, Maine. My concern is over the financial impact on the
town of North Conway, NH if LBO does not continue to operate the Mt.
Cranmore Ski Area.
As you are probably aware, Mt. Cranmore has for some years now
existed only at the pleasure of a series of private owners and a
desperate bank. Under Mr. Otten's leadership last year, the
facilities were improved, the staff expanded and the mountain's
image considerably enhanced. For the first time in recent memory,
the area ran profitably and the employees were paid on time. Mt.
Cranmore is the most historic ski area in the U.S. Only as a member
of a financially strong family can Cranmore continue to exist as one
of the finest family ski areas in New England.
My confusion can be best expressed by: ``WHY''? This is not AT&T
or Microsoft! So what if one company controls 75% of the
northeastern ski market. That's only 6 to 7% of the national market.
If lift ticket prices go too high, people won't come. The whole
process is self correcting. LBO ticket prices are already higher
than the competition and are worth every penny. These people know
how to put snow down! Customer service at LBO areas is excellent. It
seems the only one that's unhappy about the things that LBO is doing
for skiing in New England is the Justice Department.
This whole issue just lends credence to the most feared words in
the English language--``I'm from the Government and I'm here to help
you!''
Sincerely,
Robert C. Peterson,
Glen, NH 03838.
Richard & Lois Anthony
June 26, 1996.
Mr. Craig W. Conrath: We have been winter residents in North
Conway, N.H. for about 30 years, and avid skiers at Mt Cranmore and
Attitash.
[[Page 56011]]
We have been pleased with Les Otten's commitment to both ski
areas and to the North Conway--Bartlett areas in general.
We do not believe the Dept. of Justice's divestiture ruling on
LBO's forced sale of Cranmore is in the best interest of the economy
of the area and the skiing industry.
Richard & Lois Anthony,
3 Concannon Rd., Kingston, N.H. 03848.
M.L. Regan
June 26, 1996.
Mr. Craig W. Conrath,
Merger Task Force, Antitrust Div., US. Dept of Justice, 1401 H St.
Washington D.C. 20530.
Please reverse the decision re Mt. Cranmore in North Conway. LBO
has helped the economy of this tourist valley & this antitrust is a
blow to all.
Miriam Regan,
Box 345, Intervale, NH 03845.
Saint Anselm College
June 27, 1996.
Craig W. Conrath, Esquire,
Chief, Merger Task Force, Antitrust Division, United States
Department of Justice, 1401 H Street, NW., Washington, DC 20530.
Dear Mr. Conrath: I am writing about the forced sale of Cranmore
Mountain Ski Area in connection with the acquisition by LBO Holdings
of Ski Limited.
We are very appreciative of the Antitrust Division of the
Justice Department's protection of consumer interests in all mergers
and acquisitions. We are equally appreciative of the Division's
scrutiny of the LBO-Ski Ltd. transaction. However, it appears that
the Division has been misled in this regard. Cranmore Mountain,
which now operates in conjunction with Attitash Mountain, represents
collectively with Attitash about 220,000 skier visits per year out
of the approximate 2,000,000 skier visits annually in all the New
Hampshire State Areas. This is hardly a monopoly threat to the Ski
Industry in New Hampshire.
For 25 years, Cranmore Mountain has struggled financially with
the last two owners leading to insolvency and bankruptcy. Cranmore
Mountain is vital to the economy of the North Conway, Conway and
Fryeburg, Maine area. This area has struggled with the plight of
Cranmore Mountain and other local ski areas. The Town is vitally
involved in the mountain and the well being of the Mountain is vital
to the Town. After twenty-five years of apprehension, investments
and support, the purchase of Cranmore Mountain by LBO was the
stability needed to rejuvenate Cranmore to viability.
Cranmore Mountain was a birthplace of skiing in Northern New
England. The mountain has produced scores of Olympic skiers that
have represented the United States Ski Team.
The forced sale of Cranmore Mountain will condemn this facility
to mediocrity and possible extinction. Leaving Cranmore Mountain as
a part of LBO Holdings or the American Ski Company will not impair
the Ski Market in New Hampshire and will allow the Mount Washington
Valley Area to pursue its viability in the winter ski business.
Your favorable consideration in this matter will be appreciated.
Thank you for your courtesy.
Sincerely,
John J. Reilly, Jr.
cc. Senator Gregg, Senator Smith, Congressman Bass, Congressman
Zeliif.
Jennifer K. Savoie
June 28, 1996.
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street NW., Washington, DC 20530.
Re: Mount Cranmore, New Hampshire.
Dear Mr. Conrath: I am saddened and concerned about your decry
that LBO Holdings must divest itself of Mount Cranmore in order to
purchase SKI Ltd. As a long-time resident of the Mt. Washington
Valley, I have witnessed Mount Cranmore's steady decline, and then
its recent resurgence under the guidance of Les Otten. It is a
comforting scene in the wintertime to see the lights on at Mt.
Cranmore again in the evening. The mountain has long been a focal
point of our Valley.
I am concerned that your decision will do much more harm to this
Valley than good. Who else could possibly afford to buy the very
small, family-oriented Mount Cranmore and continue to upgrade it
enough to compete in today's marketplace * * * witness the hardship
and bankruptcy of nearby Black Mountain Ski Area in Jackson, as well
as countless other mountains that have fallen by the wayside (Mount
Whittier, King Ridge, etc.).
As a teacher of economics, I understand well the concept of
competition and a free marketplace. However, Mount Cranmore is a
unique situation which deserves special consideration and accolades
to Mr. Otten for bringing it back from the brink of bankruptcy. In
addition to the potential loss (forever!) of our beloved Mount
Cranmore, consider the economic impact on the local economy of all
the lost jobs at the mountain.
As the Northeast continues to struggle out of our prolonged
recession, I urgently request that you reconsider your decision. I
don't believe that Mount Cranmore will survive without LBO Holdings,
and I do believe that many jobs will be lost along with the ski
area.
Sincerely yours,
Jennifer K. Savoie,
PO Box 715, 17 Skyline Drive, Intervale, NH 03845.
Frank Murphy and Family
June 29, 1996.
Mr. Craig W. Conrath,
Chief of Merger Task Force Antitrust Division, US Department of
Justice, 1401 H Street, NW, Washington, DC 20530.
Re.: Les Otten and the Forced Sale of Mount Cranmore Ski Area.
Dear Mr. Conrath: In the past ten years Mt. Cranmore has had
three different owners. Prior to Mr. Otten it was always a
``leaking, leaner'' of a ski area. That's a sailors term to describe
an old, rusty bucket of a ship. In one year of ownership Mr. Otten
has brought sparkle to Cranmore with torch light parades and fire
works. He has run it with all the flair of a Swiss ski resort.
In October, 1995 with the promise of Mr. Otten's presence in the
Mount Washington Valley at both Cranmore and Attitash, I moved my
family from Gloucester, Massachusetts to North Conway, New
Hampshire. Are you familiar with Mr. Otten's campaign to bring
people to the North Conway area? He ran a very successful marketing
campaign called ``Ski the Presidentials!'' This revved up the Mount
Washington Valley economy. Exactly why I moved here.
I own an eleven year old, center entry, colonial on .6 acres of
land with views of North and Kearsage Mountains. If the Justice
Department sticks to its decision that Mr. Otten must sell Cranmore,
can you locate a buyer for my home as well?
Sincerely,
Frank, Marie-Louise, Brendan, Dylan, and Leigh Erin Murphy.
c.c. Senator Bob Smith, 50 Phillippe Cote Street, Manchester, NH
03101, Senator Judd Gregg, 28 Webster Street, Manchester, NH 03104,
Congressman Charlie Bass, 142 North Main Street, Concord, NH 03301,
Congressman Bill Zeliff, 340 Commercial Street, Manchester, NH
03101.
Jean M. Lees
June 30, 1996.
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice.
Dear Mr. Conrath: Three generations of my family have enjoyed
skiing and hiking on the slopes of Cranmore. The Cranmore Mt.
complex has been the focus of many town activities--sports and
festivities--since the skimobile was built in 1939. Therefore, we
are deeply concerned that Cranmore will continue to survive and
prosper.
We had hoped, however, that it would not become a Sunday River
Type ski operation with massive expansion and rapid development.
While Sunday seems a highly successful ski area, it has done little
to enhance the Bethel region. The recent constructions near the
Bethel railroad site look extremely shoddy. Here, we have many small
interests, local inns and shops that would not necessarily benefit
by one major controlling operation.
Therefore, many of us favored the Justice Department's move to
curb L.B.O. Corp.'s acquisitive and pervasive tactics before
Cranmore and its surrounding land become part of a huge New England
monopoly.
Sincerely,
Jean M. Lees.
Tech Works
June 30, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street, NW, Washington, DC 20530.
Re: LBO-SKI Ltd Acquisition--Cranmore Ski Resort.
[[Page 56012]]
Dear Sir: I write you to express my strong opposition to DOJ's
requirement that Cranmore Ski Resort be divested by LBO in order to
gain approval for the subject acquisition. My reasons are threefold.
Since I moved to Conway, NH four (4) years ago, Cranmore has
been a weak, sick ski area, recovering only since its acquisition by
LBO somewhat over a year ago. Even in its former weakened condition,
it was and continues to be vital to the winter time health of the
Mount Washington Valley. If Cranmore is again forced to struggle for
capital and marketing clout (or eventually fail for the lack of
them), this Valley and its some 20,000 residents will be irreparably
damaged. What assurance is DOJ giving that this will not happen?
Does the DOJ even care, or is the intellectual pursuit of
``competition'' more important?
Downhill skiing, while probably the most significant, is but one
of several wintertime sports that attracts people to The North
Country. Downhill skiing competes with cross country skiing,
snowmobiling, ice climbing, ice skating, etc. This raises the
following question: What is considered to be the ``relevant market''
on which this divestiture is being required? So what if American Ski
Company would own 25% of the downhill skiing in the Northeast! I
believe the relevant market is must broader than downhill skiing in
the Northeast. On occasions too numerous to count, I personally have
decided not to downhill ski in favor of a less expensive
alternative. Did DOJ take these other wintertime competitors into
account? What kind of market share would American Ski Co. have if
these directly competitive alternatives were taken into account? Far
less than 25%, and far less than the market share of many other
acquisitions that have been approved by DOJ.
Aside from the other sports that compete with downhill skiing,
winter vacation destinations compete on a worldwide basis.
Specifically, downhill skiing in the Northeast competes with skiing
in the West and in Europe. Again, based on personal experience when
I lived in Pennsylvania for 20 years, I used to take the family for
a ski week in the Northeast (Vermont, Maine and Canada). Later, I
began taking them to Colorado, Utah and the like as air travel
became cheaper and more convenient. We also once went to Europe. The
competition wasn't between ski areas in NH and VT; the competition
was between the West/Europe/Canada and the Northeast. In fact, I
believe statistics will show that the Northeast is losing this
battle in a bad way. Where is money being spent for expansion?
Certainly not in the Northeast.
Cranmore had become a new and wonderful place under LBO, in just
one year! A new hi-speed quad chair was installed; restaurants were
improved; grooming was made more exciting; and plans were underway
for additional slopes and lodging. Now we are back to the old
uncertainties, questionable supply of new money, only regional
marketing, if that--and this is supposed to compete with the likes
of Vail, Deer Valley, Telluride, Beaver Creek! Forget it. Cranmore
is finished if divested from LBO; our best hope is a marginal,
regional slope that may not even be able to pay the electric bill to
make snow as required (like before). The worst case would be
failure--would that foster competition?
Please reconsider your decision. Please give Cranmore a chance
to compete with the real players on a worldwide basis. Let them
remain part of an organization that can advertise nationwide, even
worldwide, to attract customers from afar who want to ski a variety
of slopes in the Northeast on a package basis of some sort. If their
prices rise too much, people aren't dumb with their discretionary
spending. They will ski the West, or Canada, or Europe. If they
can't afford places like that, they will ski cross country, ice
skate, or just build a snow man.
To think that LBO/American Skiing Co. would have the market
power to raise prices in an anti-competitive way is about like
saying they have the power to make it snow. They have neither. Let
them build New England skiing so that once again this region can
compete with the current powerhouses of skiing. Then we might see
some real competition!
Respectfully submitted,
David S. Urey.
cc: Congressman William Zeliff, Les B. Otten, The Conway Daily Sun.
Thomas A. Mulkern
Craig W. Conrath,
Antitrust Division, Dept. Of Justice, Washington, DC 20530.
Dear Mr. Conrath: Back in the 1930's, Harvey Gibson managed to
obtain the release of Hannes Schneider from a German concentration
camp and to introduce him to Cranmore Mt. in No. Conway, NH. It
marked the beginning of Alpine skiing in North America.
From that modest birth, skiing has become a mammoth industry
spawning giant areas like Vale, Aspen, Tahoe, Sun Valley, Jackson
Hole, et al. The tiny area of Cranmore Mt. remains eminent only as a
historical footnote.
Yet, despite its relative obscurity, it has somehow managed to
attract the attention of the Antitrust Division of U.S. Dept. of
Justice. As one who has spent a lifetime as a devotee of alpine
skiing and who owns property in the area involved I am writing to
you to protest this action.
In the New England ski industry whose past is strewn with
failures, Les Otten stands out like a beacon of light in a sea of
disaster. Until he arrived on the scene, Mt. Cranmore suffered
through a succession of inept performers to the point of imminent
bankruptcy. Let Otten comes to the rescue with a major infusion of
capital investment and operational know-how and not only breathes
new life in the resort but promises to expand it to a first class
ski area once again.
For this he gets not the applause he has earned for saving jobs,
restoring property values and insuring the future of the village of
No. Conway but instead, the attention of the Antitrust Division of
the U.S. Department of Justice.
Is it any wonder recent national polls reveal an alarming
portion of the American public becoming increasingly disenchanted
with the federal government because of what they perceive to be
intrusion in their private lives?
I see this as an example of such intrusion and I intend to use
all the support I can find to oppose it.
Sincerely,
Thomas A. Mulkern,
4 Cortland Lane, Lynnfield, MA 01940.
SURRETTE TRUCK CAPS
Craig W. Conrath,
U.S. Dept. of Justice, 1401 H. Street NW, Washington, DC 20530.
Dear Mr. Conrath: I think the Antitrust Division is making a big
mistake by asking LBO Enterprises to divest Mt. Cranmore for a
number of reasons.
The first reason is, we in the Mt. Washington Valley live on
tourism. With people not coming to Conway, it will hurt many small
business people.
Mt. Cranmore is a weak link in the ski business. By taking it
out you only make LBO's other holdings, Attiash, Bear Peak, and
Sunday River, stronger.
Many ski areas in N.H. have closed down. If LBO' prices get too
high, I am sure other areas will reopen.
Sincerely,
Richard Surrette.
Ronald K. ``JAZZID'' Moore
Craig W. Conrath,
Chief, Merger Task Force; Antitrust Division, U.S. Dept of Justice,
1401 H St NW, Washington, DC 20530.
Dear Mr. Conrath: I am writing in regard to the divesture of
Cranmore Mt Ski Area in North Conway, NH from LBO. I feel this is
the wrong decision, since the ski area has not done well in recent
years and almost went belly up! Until this the first year under LBO
when it turned a profit! Ski areas are a very iffy enterprise as it
is, what with depending on mother nature, the economy and the
consumer! Speaking of the consumer, we could always ski elsewhere if
LBO raised the prices at Cranmore, which I don't think he will. LBO
can run ski areas profitably, and provide jobs for people in the
community.
So, Craig, I beg you, do the right thing, which We seldom see
done in DC and let LBO continue as the ownership of Mt. Cranmore!
Thanks for listening.
Sincerely yours,
Ronald K. Moore.
Capt. David E. Bartlett
Mr. Craig W. Conrath,
Chief, Merger Task Force; Antitrust Division, US Department of
Justice, 1401 H. Street, NW, Washington, DC 20530.
Subj: Divestiture of Cranmore LBO/SKI Ltd merger.
Dear Sir: As a professional ski instructor at Mt. Cranmore for
the past 13 years. I have worked for at least 4 different owners/
managers. LBO was the first to bring stability and confidence. The
current ruling does not undermine but destroys both of those issues.
In the list of areas impacted by the merger, in my opinion Mt.
Cranmore is [``Physically'',] the ``runt of the litter''. I fail to
see how forcing the [seperation] of the smallest area breaks a
monopoly. If the
[[Page 56013]]
concern is regionally, due to its [proxcimity] to Attitash/Bar Peak,
the only entity that has openly voiced interest is another ski area
25 minutes up the road.
This divestiture is possibly the final nail in Mt. Cranmore's
coffin. The potential for Cranmore's growth, and consequently, the
growth of skiing in New England will only be enhanced by your review
and reversal of this decision.
Resp.
David E. Bartlett.
M/M Robert M. Fisher
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Dept. of Justice.
No doubt you have already received more than your share of
letters concerning the impending divestiture of Cranmore and
Waterville by LBO. And I am sure that you have heard Representative
Zeliff's arguments on behalf of the whole Mt. Washington Valley
whose economy depends so desperately upon the ski industry.
As a long-time resident, retired public school teacher and ski
coach, all of whose children have to a certain degree achieved their
academic objectives in part because of their skiing experiences here
in the valley, and whose livelihood has also been enhanced by skiing
opportunities here, I must argue strongly in favor of
reconsideration of the divestiture decision.
Cranmore was financially shakey when LBO rescued the operation
with a transfusion of capital and know-how which enabled the ski
area to function competitively for the first time in a number of
years of--dare I say?--modest management. Perhaps because our
youngest daughter was a two-time Olympian on the U.S. Ski Team and
has continued her career as a coach, as have all our other children
who got their start at the Junior Program on Cranmore, I am
particularly sensitive to the needs of the community. Even more so
because severe school budget cutting (in the order of 10%) threatens
that very junior program which has spawned so many local Olympians,
teachers, and coaches.
Thank you for reading these comments.
Sincerely yours,
M/M Robert M. Fisher,
615 Potter Road, Center Conway, NH 03813.
Robert A. McDaniel and Anita McDaniel
June 1996.
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Dept. of Justice,
1401 H Street NW, Washington, DC 20530.
Dear Mr. Conrath: I was very disappointed that the members of
the justice department's merger task force decided to exercise their
authority to limit the potential for monopolistic practices in the
New Hampshire ski industry. I emphasize the word potential for the
following reasons:
LBO would own only 25 percent of the New England ski market.
Competition from Massachusetts, Vermont and Maine, which abut
the small state of New Hampshire, is fierce.
The government has perfect price control mechanisms through Mt.
Sunapee and Cannon Mountain, which are both state-owned ski areas.
The fact that New England does not have a single destination ski
area to compete with areas such as Aspen, Breckenridge, Tahoe,
Snowbird, Jackson Hole, Steamboat or Sun Valley.
Many ski industry owners, with the exception of Les Otten, have
encountered a real struggle to remain solvent, much less make
significant expansion investments.
Perhaps the larger issue is not competition but employment in
New England ski towns. Government officials should take a look at
what the real conditions are before restricting the economy.
My disappointment stems from the over-reach of Washington
officials at a time when New England has fortunate to find someone
with the interest and commitment to turn it into a major player in
the ski industry.
Very truly yours,
Robert A. McDaniel,
Anita McDaniel.
19 Bellview Ave., Marehorn, MA 01752.
Gilbert G. Mahan
June 1996.
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street NW, Washington, DC 20530.
Dear Mr. Conrath: I was very disappointed that the members of
the justice department's merger task force decided to exercise their
authority to limit the potential for monopolistic practices in the
New Hampshire ski industry. I emphasize the word potential for the
following reasons:
LBO would own only 25 percent of the New England ski market.
Competition from Massachusetts, Vermont and Maine, which abut
the small state of New Hampshire, is fierce.
The government has perfect price control mechanisms through Mt.
Sunapee and Cannon Mountain, which are both state-owned ski areas.
The fact that New England does not have a single destination ski
area to compete with areas such as Aspen, Breckenridge, Tahoe,
Snowbird, Jackson Hole, Steamboat or Sun Valley.
Many ski industry owners, with the exception of Les Otten, have
encountered a real struggle to remain solvent, much less make
significant expansion investments.
Perhaps the larger issue is not competition but employment in
New England ski towns. Government officials should take a look at
what the real conditions are before restricting the economy.
My disappointment stems from the over-reach of Washington
officials at a time when New England has been fortunate to find
someone with the interest and commitment to turn it into a major
player in the ski industry.
Very truly yours,
Gilbert G. Mahan,
P.O. Box 278, Kearsarge, NH 03847.
Robert E. and Joan W. Billings
June 1996.
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street NW., Washington, DC 20530.
Dear Mr. Conrath: I was very disappointed that the members of
the justice department's merger task force decided to exercise their
authority to limit the potential for monopolistic practices in the
New Hampshire ski industry. I emphasize the word potential for the
following reasons:
LBO would own only 25 percent of the New England ski market.
Competition from Massachusetts, Vermont and Maine, which abut
the small state of New Hampshire, is fierce.
The government has perfect price control mechanisms through Mt.
Sunapee and Cannon Mountain, which are both state-owned ski areas.
The fact that New England does not have a single destination ski
area to compete with areas such as Aspen, Breckenridge, Tahoe,
Snowbird, Jackson Hole, Steamboat or Sun Valley.
Many ski industry owners, with the exception of Les Otten, have
encountered a real struggle to remain solvent, much less make
significant expansion investments.
Perhaps the larger issue is not competition but employment in
New England ski towns. Government officials should take a look at
what the real conditions are before restricting the economy.
My disappointment stems from the over-reach of Washington
officials at a time when New England has been fortunate to find
someone with the interest and commitment to turn it into a major
player in the ski industry.
Very truly yours,
Robert E. & Joan W. Billings.
David A. Pope
July 1, 1986.
U.S. Dept of Justice, 1401 H Street, NW, Washington, DC 20530.
ATT. Mr. Craig W. Conrath, Ch. Merger Task Force, Antitrust Div.
Subject: Forced Sale of Cranmore MT by Les Otten/The American Skiing
Co.
Dear Mr. Conrath: In your effort to be fair, you are about to
commit the all time miscarriage of justice by forcing the Amer.
Skiing Co/Les Otten to sell Mt. Cranmore in No. Conway for the
following reasons:
(1) By forcing the sale of Mt. Cranmore while it makes good
``Window Dressing'' for the Anti-Trust Div., it will be disastrous
for the town of No. Conway.
(2) When Les Otten bought Cranmore, his presence stabilized the
real estate market, and brought new confidence to the Mt. Washington
Valley.
(3) Les Otten spent (3) three million or more dollars and
rejuvenated the entire mountain and created great skiing.
(4) He started making snow in Nov 1995 and opened the earliest
season in 58 years. (No one else thought it could be done.)
(5) His combined ski ticket between Cranmore and Attitash-Bear
Peak gave the skier the best choice and the best value-saved money.
(6) Competition is everywhere--Wildcat, Bretton Woods, Black Mt.
Pleasant, Mt.
[[Page 56014]]
Franconia, Sunapee, Loon, Ragged Mt. Gunstock, Stone VT Okemo and
more.
(7) Les Otten (The American Skiing Co.) will always be strong
competitors because he knows how to run a ski area, how to make
snow, how to groom, how to feed people and how to listen to people's
complaints and then respond.
(8) Small areas like Cranmore and Waterville Valley need a
strong, financially sound owner who is not afraid to invest money
and then want to see the results build.
(9) If you rescind your push for the sale of Mt. Cranmore, you
can rest assured that it will stay viable and be expanded and the
entire valley will benefit. If it is sold to someone else, the
reverse will happen and skiers will be paying more and receiving
less. Please--Please rescind the Anti-Trust Div. actions in forcing
Les Otten to sell anything. The skiing industry does not need Anti-
Trust protection. People can keep prices and competition in line. It
costs too much, skiers go elsewhere--or not at all.
Thank you,
Very Truly Yours,
David A. Pope,
Box 120, Kearsarge, NH 03847.
PS. Thousands of people think the same way I do.
Mrs. Janet Cooper
Please vote to reverse the D.O.J.'s decision: Mt. Cranmore, N.
Conway N.H. needs LB Otten's expertise to operate the ski area
successfully.
It is most important for the economy of Mt. Washington Valley.
Thank you,
Mrs. Janet Cooper,
45 Plainfield St., Waban, MA 02168.
Jeff Barley
Dear Sir: Forcing LBO to divest itself of Cranmore ski area
makes no sense. Cranmore is the life blood of North Conway and North
Convey is the Keystone of the travel and tourist industry of
northern N.H. We have seen one owner after another come & go because
of limited capital. We finally have a stable owner and you're taking
them away. Ridiculous.
Jeff Barley
StoryLand
July 2, 1996.
Mr. Craig W. Conrath,
Chief of Merger Task Force, Antitrust Division, US DOJ, 1401 H
Street, NW, Washington, D.C. 20530.
Dear Mr. Conrath: I am the founder of Story Land, a children's
theme park and a museum depicting our state's 350 year history.
I grew up in this valley, and except for military service, have
lived here all my 76 years. I was part of the birth and growth and
investment needed to bring a winter industry into being. It is a
risky business wherever it exists anywhere in the world, but it is
the focal point of the economic activity in an area. Without the ski
area, the peripheral businesses don't sprout.
LBO has come at a very propitious time in the evolution of this
industry and his concept and monetary leverage bring this fragmented
industry into the 21st century. Will LBO be able to control the
skier market and pricing in this upper New England area? I don't
think so. Its share will provide the economics of scale necessary
for the huge capital expenditures and still leave \2/3\ of the
market to entrepreneurs to offer alternatives in composition and
pricing. This country was built on this concept.
I write in the hope that you will reconsider the proposed action
as a condition for the permanent merger with SKI.
Yours truly,
Robert S. Morrell,
Founder-Chairman.
cc: Congressman Zeliff,
Senator Judd Gregg,
Senator Bob Smith.
Roy A. Lundquist
July 2, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street NW, Washington, DC 20530.
Subject: Divestiture of Mount Cranmore and Waterville Valley.
Dear Mr. Conrath: I am writing this letter to express my
concerns regarding the recent decision that L.B. Otten and the
American Ski Company divest the Mount Cranmore and Waterville Valley
ski areas. I believe this decision to be contrary to the best
interests of the skiing public and the communities in which these
ski areas do business.
I have been an ardent skier for over 50 years. In my career I
was employed in the defense electronics business as an engineer,
program manager and marketing manager. Now retired, I still ski over
100 days a year. I have seen the ski industry grow from a fledgling
sport in the '40's and '50's through the growth years of the '60's
and '70's to the stagnation that began in the '80's and continues to
exist. It has been well documented by the industry publications that
the skiing population has remained constant for the last decade. It
is not, by any measurement, considered to be a growth industry. To
the contrary, it is an industry that is desperately trying to
survive. In New England alone, the number of ski areas that operate
today is only about one-half the number that were in existence 20
years ago.
The ski area business today is unique. It has become a business
that is extremely capital and energy intensive. Todays skier demands
much more of the ski areas than was the case several years ago. They
demand high speed lifts, both fixed and detachable, which cost
anywhere from $1 million to $2 million to install. They demand
extensive snowmaking to avoid the vagaries of normal winters, which
come at a very high cost to install and have a very high energy cost
to operate. And then they demand that all this snow be meticulously
groomed by a fleet of machines that cost around $200,000 each. In
addition, skiers want to have fine amenities in the lodges and
restaurants.
It is interesting to note that the ski areas that are the most
successful are those that have invested considerable capital in
providing what the skiers want: namely high speed lifts, good snow
making and good grooming, as well as good amenities. It is also
interesting to note that the successful ski areas not only draw the
greatest number of skiers by far, but they also charge the highest
lift ticket prices. One must conclude from this that the skier of
today is willing to pay the market price for a good product.
Certainly lower priced ski areas exist. But they do not provide the
quality ski experience that the major areas provide, and therefore
do not attract the number of skiers. Without the skier visits these
lower priced areas cannot generate enough revenue to make the
capital improvements necessary to attract more skiers. It is a
classic ``Catch 22'' situation. In the long run the lower priced
areas either continue on in a marginal profit situation catering to
a small niche of skiers, or, as has happened to so many small ski
areas, they go out of business. It appears that, because of the
capital intensive nature of today's ski business, that size and
economies of scale are essential not only to provide a quality
product, but to generate the necessary volume of skier traffic to
make a profit.
I would like to discuss the Mount Cranmore situation, as I live
in North Conway where Mount Cranmore is located. Cranmore is the
birthplace of American skiing. It is here that the legendary Hannes
Schneider came to from Austria in 1939 and began teaching skiing to
the ski hungry public. Cranmore grew as the sport developed in the
'40's and '50's. However, it did not follow the boom of the '60's
and '70's as newer ski areas came into existence. Cranmore did not
continue to reinvest in capital improvements. For years the
popularity of Cranmore declined, and even though it priced its
tickets lower than the newer areas, specifically Attitash, its skier
visits decreased. It went through a series of ownership changes, but
capital improvements were minimal or ill-conceived. Cranmore was on
the verge of bankruptcy and facing possible closure when it was
purchased (from the bank) by Les Otten. Otten did several things. He
marketed it in conjunction with Attitash and sold a combined
facility lift ticket. He made major capital improvements: addition
of a high-speed detachable chair lift, expansion and upgrading of
the snow making system, increasing the fleet of groomers, improving
the restaurants and amenities. He made snow earlier than ever
before, and not only opened for the season earlier than ever, but
extended the closing date to its latest ever. He announced plans for
a major expansion to an adjacent mountain. And yes, he increased the
price of lift tickets to the same as Attitash. And what happened?
Skier visits increased by 50% over the previous year. And this in
spite of the fact that lower priced ski areas continued to operate
within a 30 mile radius, namely Black Mountain, King Pine, Wildcat,
Shawnee Peak and Bretton Woods.
The Department of Justice ruling on the divestiture stated that
the primary reason was to prevent the American Ski Company from
creating a monopoly that would eliminate lower priced alternatives
from the skiing public. I find this reasoning to be flawed,
particularly with respect to Mount Cranmore, for the following
reasons:
There are five other ski areas within a 30 mile radius that
provide lower ticket pricing
[[Page 56015]]
than the Attitash/Bear Peak/Cranmore complex. These are Black
Mountain, King Pine, Wildcat, Shawnee Peak and Bretton Woods.
The quality of the product demanded by today's skier requires
large capital expenditures by the ski areas. The skier is willing to
pay the market price in order to get the ski experience that results
from the capital expenditures. The most successful ski areas, as
measured by skier visits, universally charge the highest prices for
lift tickets.
The skiers from the metropolitan areas of Boston, Hartford,
Portland and New York comprise the majority of the skiing population
in New England. They have many alternatives other than those owned
by the American Ski Company. They will be attracted to those areas
that provide a quality product at a reasonable market price. This
competition will provide stability to the price of lift tickets.
The size of the skiing population is constant, and is not
predicted to increase. In order to maintain or increase market
share, ski areas will have to continue to invest in capital
equipment. This requires that the areas increase the number of skier
visits, and/or expand their operations so as to provide efficiency
and cost improvements through economies of scale.
Small ski areas will continue to provide lower cost
alternatives, but at the expense of the quality of the ski
experience, i.e. slower lifts, less snowmaking, less grooming and
poorer amenities. If these smaller ski areas can not attract
sufficient skiers, they too, like so many have already, will go out
of business. It is very possible that Mount Cranmore will return to
this status as a marginal ski area with an uncertain future if the
divestiture is carried out.
I request that the Department of Justice reconsider its position
on the divestiture of Mount Cranmore and Waterville Valley. As I
have pointed out, this action will be detrimental to the skiing
public, and to the individual areas, and ultimately to the local
community. The capital needs of the two areas in question will best
be served by continuing their relationship as part of the American
Ski Company. Sufficient lower priced ski areas exist in the
immediate surrounding area to satisfy the Department of Justice
concerns.
Very truly yours,
Roy A. Lundquist.
cc: Rep. William Zeliff,
Sen. Judd Gregg,
Sen. Robert Smith.
Richard O. and Gloria Pinkham
July 3, 1996.
Craig W. Conrath, Chief,
Merger Task Force, Antitrust Division, U.S. Department of Justice,
1401 H Street NW, Washington, DC 20530.
Dear Mr. Conrath: We are very disappointed that the members of
the justice department's merger task force decided to exercise their
authority to limit the potential for monopolistic practices in the
New Hampshire ski industry. We emphasize the word potential for the
following reasons:
--LBO would own only 25 percent of the New England ski market.
--Competition from Massachusetts, Vermont and Maine, which abut the
small state of New Hamphire, is fierce.
--The government has perfect price control mechanisms through Mt.
Sunapee and Cannon Mountain, which are both state-owned ski areas.
--The fact that New England does not have a single destination ski
area to compete with areas such as Aspen, Breckenridge, Tahoe,
Snowbird, Jackson Hole, Steamboat or Sun Valley.
--Many ski industry owners, with the exception of Ies Otten, have
encountered a real struggle to remain solvent, much less make
significant expansion investments.
Perhaps the larger issue is not competition but employment in
New England ski towns. Government officials should take a look at
what the real conditions are before restricting the economy.
Our disappointment stems from the over-reach of Washington
officials at a time when New England has been fortunate to find
someone with the interest and commitment to turn it into a major
player in the ski industry.
Very truly yours,
Richard O. and Gloria Pinkham,
44 Powers Road, Concord, MA 01742 and Westside Road (P.O. Box 361,
Glen, NH 03838
cc. Rep. Bill Zellif.
Cynthia A. Feltch
July 3, 1996.
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H. Street, N.W., Washington, DC 20530.
Dear Mr. Conrath: This is regarding the forced divestment of
Mount Cranmore and Waterville Valley by LBO Enterprises and S-K-I
Ltd. prior to their merger forming The American Skiing Company.
Being a business person who resides in the Mount Washington Valley
of New Hampshire and an avid ski enthusiast, I feel compelled to
communicate my dismay with the decision which has been made.
Frankly, the logic of this decision by the Dept. of Justice
alludes me. This determination looks and feels an awful lot like
bureaucratic involvement in an area much less understood than bits,
bytes and proprietary software. This is a business of recreation. It
is not a life sustaining activity required for long term human
existence. Moreover, it involves a rather small segment of the U.S.
population which can afford the expenditure of discretionary
dollars. Skiing is not part of our daily allowance of vitamins.
I do not believe that the DOJ is looking at the true
demographics of the ski industry in the Northeast when it says that
Waterville, Cranmore and Attitash/Bear Peak garner a 90%+ ratio of
skier visits from Massachusetts and Rhode Island. The simple fact
is, you are not comparing apples to apples. Each of these area has
different terrain, amenities and accommodations to offer their
visitors. What one mountain may do well, another does not offer at
all. Cranmore is known as a family mountain. This means the terrain
is easier to ski and the area caters to small children. Attitash on
the other hand offers significantly more difficult terrain and
attracts skiers who do not want to ski with small children.
Waterville is so far removed from both of these areas in the winter
months due to access across the mountains that it does not share
skiers with either Cranmore or Attitash. Typically, visitors who are
skiing on the western slope (I-93 side of the mountains) do not
venture over to the eastern slope (Rt. 16/Mt. Washington Valley).
While visiting Waterville, they will avail themselves of the skiing
at Loon Mountain, Cannon Mountain or Gunstock, all of which are
owned and operated by other companies. Likewise, the same can be
said for skiers on the eastern slope who may choose from King Pine,
Black Mountain or Wildcat if they want a change from Cranmore or
Attitash.
To point to two specific mountains and contend that they create
an unfair trade advantage is ludicrous. With all the aforementioned
choices, skiers and their families are not being held hostage by one
company. This is a market driven industry. If the consumer does not
like what is being offered, they can go elsewhere and be satisfied.
No one is holding a gun to skier's heads and making them spend their
discretionary income on this sport. No one at LBO or S-K-I Ltd. has
given those of us who operate businesses within their geographic
areas reason to believe that they are anything less than savvy
entrepreneurs. Why should we assume the worst now that these two
companies are joining forces to bring the industry better skiing
experiences?
In closing, I believe that the forced divestment of Waterville
and Cranmore bodes very badly for the Camden, NH and North Conway,
NH areas. The capital investments made by LBO and S-K-I in the
preceding years marked an economic turning point for these two
towns. Prior owners and operators did not have the capital or the
vision to improve these two areas to any great extent. What LBO and
S-K-I did in their short tenures was remarkable and encouraging to
those of us who witnessed the improvements. To cut this
metamorphosis short is to blindly sever the opportunities of two
communities who were just beginning to make a comeback in the ski
industry.
Respectfully,
Cynthia A. Feltch,
PO Box 40, Bartlett, NH 03812.
Signature Breads
July 5, 1996.
Craig W. Conrath,
Merger Task Force, Antitrust Division, U.S. Department of Justice,
1404 H Street, Washington, D.C. 20530.
Dear Mr. Conrath: It is unfortunate that the members of the
justice department's merger task force have decided to exercise
their authority to limit the potential for monopolistic practices in
the New Hampshire ski industry. Please note emphasize on the word
``potential'' for the following reasons:
LBO would own only 25% of the New England ski market.
Competition from Massachusetts, Vermont and Maine which abut the
small state of New Hampshire is fierce.
[[Page 56016]]
The government has in place price control mechanisms through state
owned ski areas--Mt. Sunapee and Cannon Mountains.
The fact that there are no single destination ski areas in New
England to compete with areas such as Aspen, Breckenridge, Tahoe,
Jackson Hole, Snow Bird, Steamboat, SunValley, etc.
Many New England ski owners, Les Otten is an exception, have had a
very real struggle just to remain solvent and do not have the
resources to make significant investments.
Perhaps the larger issue is not competition but employment in
New England ski towns. Government officials should look at what the
real conditions are before taking actions which will restrict the
economy.
It is very disturbing to note the over reach of Washington
officials at a time when New England has been fortunate to find
someone with the interest and commitment to turn it into a major
player in the ski industry.
Sincerely,
Harold Berk,
300 Middlesex Avenue, Medford, MA 02155.
Boy Kyle
Dear Mr. Conrath: As an avid skier (not a rich one) I think the
decision on Cranmore in N.H. is not a very good one.
Les Otten bought Cranmore when it was down and out and brought
it back where it should be. To force him out makes no sense at all.
You must realize there are not to many people who can afford to
buy a ski area, much less someone who even wants one.
We'll take care of the price of lift tickets. When they get to
high we just won't buy any. Let the market dictate the price, not
the government. I'm sure you have bigger fish to fry!
Boy Kyle,
Bartlett, N.H.
James Lane
July 8, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Dept. of Justice,
1404 H Street NW, Washington, D.C. 20530.
Dear Sir: Your efforts to prevent LBO Holdings from maintaining
ownership of Cranmore Ski area in No. Conway, N.H. are
representative of ignorant government intervention in a business and
ultimately in the everyday lives of residents in this area. You need
a vision--a vision we all have up here in the Mt. Washington Valley
that what LBO Holdings has initiated is of benefit to EVERYONE.
The Antitrust Division decree is a disgraceful authoritarian
governmental punishment to a business venture that has been
successful. LBO Holdings' businesses have been a god-send for the
people here in the Valley and for all those who come here because of
LBO's business acumen. There is something radically awry in your
Merger Task Force activities. You need to be advised by people who
intuitively know that your directives in this matter are ill-
advised, ill-informed, ill-judged, and ill-willed toward anyone who
could possibly benefit from the business foresight of LBO Holdings.
If it is true that what is good for business, is good for the
Nation as a whole, then you are on the wrong track by depriving this
area of the benefits that have accrued from LBO Holdings' presence
in this Valley. You need to keep in the forefront of your mind, that
if LBO Holdings had not bought and nurtured Cranmore, there would
have been no Cranmore for you to squack about. Indeed, the
competition is not smashed by LBO's wizardry, there just isn't any
competition without his presence at Cranmore. Therefore, you need to
recind your interference now and we all look forward to your doing
so. Thank you.
Yours truly,
James Lane,
P.O. Box 485, Jackson, N.H. 03846.
William J. Denning
Mr. Craig Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Dept. of Justice,
1401 H Street NW, Washington, D.C. 20530.
Dear Mr. Conrath: A period of time has passed since the news of
forced divestiture of Mt. Cranmore was made public, with that in
mind, I have had adequate time to put together my thoughts on the
subject.
I have little knowledge on term ``monopoly.'' Certainly, I do
not qualify as an expert. Understanding says that the reasoning
behind the forced divestiture of Cranmore and Waterville, is to keep
one organization--LBO--from controlling too much of one business in
one area so prices remain competitive.
I would hope that the economic well-being of the people in a
small area of New Hampshire could be factored into the process.
If we look at Mt. Cranmore in particular, their recent and not
so recent past, it becomes quite obvious that they have had
troubles, which include bank take-over. These troubles may have been
due to a real misunderstanding of the ski industry; they may have
been due to economic times; they may have been due to a lack of
capital. I am unable to say with any degree of certainty. What I am
able to say with a degree of certainty is that since the LBO
organization has taken over, capital improvements have been made,
management with an understanding of the ski industry (and it is
unique) has been put in place, and the mountain is a viable area
once again.
This small N.H. valley needs this area in order to retain its
economic health. This ski area needs a strong, willing and capable
management in order to survive. The LBO organization has a track
record which proves it is the right one, in the right place at the
right time.
It has always been the prerogative of people to write to persons
in charge, voicing opinions which may or may not be contrary. We
would hope these letters are read and even considered in final
decisions. In this particular vein, the local media have published
remarks allegedly attributed to Mr. Charles Biggio. These concern
the statement or remarks about the Justice Department never has been
reversed on the subject of divestiture. If this is true, I think the
word infallible might apply to this person. If this is true, I think
the person in question should be working two or three planes above
where he/she now is.
It is quite obvious that Mt. Cranmore has been turned around. It
is also quite obvious that I cannot understand a forced divestiture
which would be so harmful to the people in a small area of New
Hampshire.
Very truly yours,
William J. Denning.
T.M. Egbert, Jr.
July 9, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street NW., Washington 20530.
Dear Mr. Conrath: Les Otten, with his American Skiing Company,
is trying to revitalize a large part of the U.S. ski industry which
has been flat for a number of years.
If there ever was a case that called for ``benign neglect'' on
the part of the Justice Department, this is it.
The agreement requiring divestiture of Cranmore Mountain in
North Conway, N.H. should be rethought. Cranmore is a small ski
area. For the past 15 years or so, small, independent ski areas have
either 1) grown bigger or 2) linked up with larger companies or 3)
gone out of business. There are no other alternatives.
Cranmore, as you certainly know, had been struggling for years
and was in the hands of its bankers. Otten bought it last year,
revived it with substantial new investment and would have been able
to keep it going as part of the Attitash Bear Peak complex.
Your divestiture decision takes Cranmore backwards.
If anyone can be found to buy it from Otten, Cranmore will be
faced with the same insurmountable problems that it had previously--
trying to compete with the larger ski operations in the North
Conway--Western Maine market. Cranmore is unable to stand alone.
This is an established fact.
Consequently, your well-intended efforts to preserve competition
will have exactly the opposite effect. Moreover, the demise of
Cranmore will cause serious economic hardship to dozens of
businesses in the area and to property-owners whose condominiums
next to a defunct ski hill will be next to worthless.
Moreover, your spokeswoman who laid great emphasis on the need
to preserve skier discounts, displayed a severe lack of expertise.
Discounts do not drive the ski business. Terrain, snowmaking,
grooming, skier services and amenities are what count with skiers
and what they are willing to pay for. Small ski areas are simply
unable to provide these at competitive levels.
It appears that the decision calling for divestiture is based on
outdated and unrealistic assumptions. I urge you to reconsider the
decision and to put it on ``hold''; then to dig deeply into the
facts of the ski industry. If you do, you will find that it makes
sense to rescind the divestiture agreement.
[[Page 56017]]
That would enable you to observe what happens in the next few
years. Then, if you find that the American Skiing Co. is, in fact,
hindering competition, you can take corrective action.
The action you have taken this year is, at best, premature. At
worst, it will kill Cranmore, not preserve it. It will lessen
competition, not promote it.
Sincerely,
T.M. Egbert, Jr.,
Former member, Board of Directors, Attitash Ski Lift Co.
Henry DiRico
July 10, 1996.
Craig W. Conrath,
Merger Task Force, Antitrust Division, U.S. Department of Justice,
1404 H Street, Washington, D.C. 20530.
Dear Mr. Conrath: It is unfortunate that the members of the
Justice Department's merger task force have decided to exercise
their authority to limit the potential for monopolistic practices in
the New Hampshire ski industry. Please note emphasis on the word
``potential'' for the following reasons:
LBO would own only 25% of the New England ski market.
Competition from Massachusetts, Vermont and Maine, which abut the
small state of New Hampshire, is fierce.
The government has in place price control mechanisms through state-
owned ski areas--Mt. Sunapee and Cannon Mountain.
The fact that there are no single destination ski areas in New
England to compete with areas such as Aspen, Breckenridge, Tahoe,
Jackson Hole, Snow Bird, Steamboat, Sun Valley, etc.
Many New England ski owners, Les Otten is an exception, have had a
very real struggle just to remain solvent and do not have the
resources to make significant investments.
Perhaps the larger issue is not competition but employment in
New England ski towns. Government officials should look at what the
real conditions are before taking actions which will restrict the
economy.
It is very disturbing to note the overreach of Washington
officials at a time when New England has been fortunate to find
someone with the interest and commitment to turn it into a major
player in the ski industry.
Sincerely,
Henry DiRico.
Fred and Milly Pereira
July 11, 1996.
Craig W. Conrath,
Chief of Merger Task Force, Antitrust Division, US DOJ, 1401 H
Street, N.W., Washington, D.C. 20530.
Dear Mr. Conrath: It is with deep concern that we write this
letter regarding the Department of Justice's recent divestiture
ruling on LBO's forced sale of Mt. Cranmore in North Conway, New
Hampshire. Hopefully, you are aware of the history of Mt. Cranmore
in the Mount Washington Valley. Not only is it of historic value,
but the financial history in recent years has not been the best. We
have skied the area for years and feel its impact in the Valley.
This mountain cannot stand on its own. The comparison of Mt.
Cranmore to the other areas is not an equal comparison. This
mountain is a small intermediate mountain, that until Les Otten, was
about to close. The package of including it with Attitash and Sunday
River as a combo ticket and as an advertising program during the
past year, has brought new life to the mountain and the valley.
We would greatly appreciate if you would reconsider your
decision regarding this mountain. It needs the strong and
knowledgeable leadership of LBO. Many of us who live in the Mass.
and Rhode Island area would rather have the opportunities to ski a
progressive area with a future than a discounted, old and perhaps
closed mountain.
For the communities of the area and the skiers of New England
please take a second look at this decision!!!
Thank you,
Fred and Milly Pereira,
392 Brenda Lane, Franklin, MA 02038 and Box 1054 Eidelweiss, NH 03849.s
Richard F. Hickey
July 11, 1996.
Mr. Craig Conrath, Chief,
Merger Task Force, Antitrust Division, U.S. Departments of Justice,
1401 H Street N.W., Washington, D.C. 20530.
Dear Mr. Conrath, I own a home in Bartlett, New Hampshire and
ski in the Mount Washington Valley nearly every winter weekend and
have done so for the past six years. I am concerned over the
Department's decision to permit the merger of Leslie Otten's
operations with those of Ski Ltd. only if the Mt. Cranmore and
Waterville Valley ski areas are divested. I don't see how this will
improve competition, such as it might exist in the ski industry. My
concern is that divestiture will be soon followed by the collapse of
both divestees resulting in fewer job opportunities in the region
and fewer reasons why people would come here to spend their dollars
and improve the economy.
I have no interest, financial or otherwise in Mr. Otten's
operations or in Ski, Ltd. I regularly ski at Wildcat Mountain and
ski at Cranmore and Attitash/Bear Peak infrequently. My observations
and opinions are only those of a part-time resident of the area and
as a citizen concerned with the financial well-being of the area's
residents who do not have a wealth of job opportunities.
It seems to me that ski areas in Northern New England compete
not only with each other but also with resorts closer to
Massachusetts and Connecticut and with ski areas in New York. Most
avid New England skiers also ski in the Rockies, many on an annual
basis. New England areas surely lose some local business to the
Western ski areas and get very little business from foreign skiers.
(If you have ever skied in Colorado, you surely noticed the large
numbers of skiers from all over the world who regularly take their
ski vacations in the Rockies).
Ski areas not only compete with one another but with other
attractions for the leisure dollar. Ski areas visits are declining,
not growing. Within the Mount Washington Valley area, the downhill
ski areas must compete with far less expensive cross-country skiing,
ice climbing, trekking, snowmobiling, etc. It seems to me that the
department may be overlooking these claims on the tourist dollar
when it tries to define competition. Downhill skiing is just one
winter activity in search of the available leisure expenditure.
Most New England areas, certainly Cranmore and Waterville
Valley, are small and find it difficult to invest in the essentials
of modern skiing--high speed lifts and technologically advanced snow
making equipment. Likewise they are unable to mount significant
advertising campaigns to attract patrons from near and far. Also,
these small areas do not have the lodging and restaurant facilities
that would add to their economic strength and which are expected by
tourists today.
It seems to me that Les Otten was trying to create that economic
mass necessary to lure tourists to the area and to expose the
attractiveness of this region to non-skiers. He was offering his
customers options to ski several different mountains on a convenient
ticket system. He has been willing to support his own marketing
concepts with his own money. An interesting by-product of his effort
has been developing an awareness of the necessity of changing the
way the ski business markets itself if it is going to continue to
compete for the consumer's leisure dollar.
The ski business brings business to this region which needs
employment opportunities for its residents. Needless to say, more
visitors to the Valley improve the economy for all the local
enterprises. Les Otten purchased Cranmore when, I believe, it was
all but bankrupt. He invested a lot of money in improving its
equipment and facilities. I can't imagine that in this day and age
there is someone who can run that mountain profitably as a stand-
alone facility.
The Mount Washington Valley has already lost some of its appeal
to families with the bankruptcy of Black Mountain. If Cranmore also
fails, it will take with it thousands of annual skier visits. Its
passing would be another reason why people don't have to come here
in the wintertime. This areas is not a casual drive from Boston or
Hartford. Maintaining the area's economic base requires convincing
people that there's lots of great activities awaiting them at the
end of a three, four, five or six hour drive.
I don't think the Department's decision really improves the
consumer's competitive options in as much as it takes a very narrow
view of the position of downhill skiing in the universe of
competitors for the consumer dollar. It seems to me that the ski
industry in this area and the economy of the Mount Washington Valley
needs operations with financial muscle and creativity. I don't think
they work in todays economy and I don't think the Department should
continue to support an antiquated concept of competition within the
industry.
[[Page 56018]]
Sincerely,
Richard F. Hickey,
9 Metacomment Road, Scituate, MA 02066.
cc: Hon. William Zeliff.
Miriam Regan
July 11, 1996.
Dear Ms. Bingaman: Please seriously consider the views of local
residents of Mt. Cranmore re the divestiture order against L.B.O.
We see no threat to competition in the N.H. ski industry. Mt.
Cranmore is a particularly historical mountain and employs hundreds
of local residents, offers school children free skiing and is
geographically convenient to the local town. SAVE Mt. Cranmore.
Miriam Regan,
Box 345, Intervale, NY 03845.
June 26, 1996.
Please reverse the decision re Mt. Cranmore in Kortle Conway.
LBO has helped the economy of this tourist valley and this antitrust
is a blow to all.
Miriam Regan.
Sally Hindson
July 11, 1996.
Craig W. Conrath,
Chief of Merger Task Force, Antitrust Division, US DOJ, 1401 H
Street, N.W., Washington, D.C. 20530.
Dear Mr. Conrath: It is with deep concern that we write this
letter regarding the Department of Justice's recent divestiture
ruling on LBO's forced sale of Mt. Cranmore in North Conway, New
Hampshire. Hopefully, you are aware of the history or Mt. Cranmore
in Mount Washington Valley. Not only is it of historic value, but
the financial history in recent years has not been the best. We have
skied the area for years and feel its impact in the Valley. This
mountain cannot stand on its own. The comparison of Mt. Cranmore to
the other areas is not an equal comparison. This mountain is a small
intermediate mountain, that until Les Otten, was about to close. The
package of including it with Attitash and Sunday River as a combo
ticket and as an advertising program during the past year, has
brought new life to the mountain and the valley.
We would greatly appreciate if you would reconsider your
decision regarding this mountain. It needs the strong and
knowledgeable leadership of LBO. Many of us who live in the Mass.
and Rhode Island area would rather have the opportunities to ski a
progressive area with a future than a discounted old and perhaps
closed mountain.
For the communities of the area and the skiers of New England
please take a second look at this decision!!!
Thank you,
Sally Hindson.
Dennis J. Holland and Marcia A. Burchstead
July 12, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street, NW, Washington, D.C. 20530.
Dear Mr. Conrath: Unlike many other letters you will be
receiving on the matter of the divestiture of Mt. Cranmore by LBO, I
am in full support of the action taken by you and other members of
the Merger Task Force.
I am the past president of the Innitou Ski Club located in Glen,
NH and since January 1993 a homeowner, property taxpayer and voter
in the town of Bartlett, NH. I along with the other members of the
ski club was opposed to Les Otten's purchase of Mt. Cranmore last
year.
Mt. Cranmore is a ski area full of history and heritage to the
area. It is a family ski area and has served the needs of the Mount
Washington Valley residents and school children since it opened in
1938. Hannes Schneider, Carroll Reed, Harvey Dow Gibson and others
made this ski area a landmark among ski areas in the United States.
I am afraid they would not be so proud of their mountain if they
could see what has happened all in the name of progress.
Prior to LBO purchasing the mountain, previous owners had
dismantled the Skimobile, a unique lift and a part of skiing
history. A modern base lodge was erected in place of the log
structure.
Last year LBO saw fit to take down the mid-station double chair
and replace it with a high-speed detachable quad. He also hiked the
price of lift tickets to $10, for both weekday and weekend tickets!
Quite a jump for families to absorb. Discount vouchers for ski club
members were eliminated His public relations flack said and I quote,
``Discount lift tickets are not in our vocabulary!'' What arrogance!
The long standing, tradition of the ``Mountain Meisters,'' racing
program for adults in the valley was also to be eliminated but this
caused such an uproar that it was quickly restored. The cost of the
ski program for area school children was also increased depriving
some of the experience of learning a new sport and getting exercise.
The children's ski school eliminated its practice of photo id tags
and security cards for parents to pick-up children at the end of the
day.
The previous year while under bank ownership, Mr. Ken Lydecker,
managed the area and brought renewed goodwill to the valley. He
donated and installed beautiful holiday wreath decorations to
downtown North Conway, hosted the NCAA national cross country races
at the mountain when nearby Jackson Ski Touring was flooded out and
the races almost had to be canceled, and provided artificial snow
for the snowmobilers ride-in in the valley which would have been a
bust due to a lack of natural snow.
This is the kind of ski area Mt. Washington Valley needs and
deserves, not a cookie cutter, mass produced, clone of Sunday River.
I know that several individuals have stepped forward and
expressed an interest in operating Mt. Cranmore. I hope that your
agency will give them the opportunity to restore Mt. Cranmore to the
adults and children of the valley and the skiers who come from
throughout New England to experience affordable family skiing.
Sincerely,
Dennis J. Holland and Marcia A. Burchstead,
35 Skyline Drive, P.O. Box 826, Intervale, NH, 03845.
July 13, 1996.
George J.R. Sauer
Dear Mr. Conrath: I am a property owner at #17 Old Bartlett Road
directly across from Mt. Cranmore Ski Area.
I am very upset by your divestiture order which forces Les Otten
to sell Mt. Cranmore. He is welcomed and needed by the community.
Please reconsider your decision.
Sincerely yours,
George J.R. Sauer,
45 Fuller St., Dedham, MA 02026.
John C. Conniff
July 13, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street, N.W., Suite 4000, Washington, DC 20530
Re: Ski Resort Merger
Dear Mr. Conrath: I am a retired businessman and an active skier
for sixty years. I skied at Mt. Cranmore, NH in the early days of
American skiing, and I still ski there today.
Please, I urge you to allow the American Skiing Company to
retain ownership of Mt. Cranmore. This would be in the best interest
of the Town of North Conway, the many commercial establishments that
depend on a successful ski area, and most important we the skiing
public in New England. This will not, in any way, lessen
competition. Mt. Cranmore needs The American Skiing Company if it is
to survive.
A few years ago the Mt. Cranmore Ski Area went into bankruptcy.
The ski company struggled for a long time and the facilities on the
mountain were run-down and obsolete. The management was in no
position to borrow the large amount of money it would take to
modernize the mountain. When LBO Enterprises purchased Mt. Cranmore
everyone cheered. Here was a company with skilled management and the
financial strength to put this modest size ski area back on its
feet. In just two or three years they invested in new equipment,
offered the public attractive programs, and started to turn things
around.
I am asking that you reconsider your decision about Mt. Cranmore
and allow the American Skiing Company to retain ownership. This will
in fact be good for competition, everyone in the Town of North
Conway, and we skiers.
You may call me anytime if you think I can be of assistance in
helping you with your final decision.
Sincerely,
John C. Conniff,
(413) 567-8767.
Charles Morse, Jr.
July 16, 1996
Mr. Craig W. Conrath,
Chief of Merger Task Force
[[Page 56019]]
Subject: D.O.J. divestiture order relative to LBO Cranmore Ski Area
Gentlemen: I respectfully request that you reconsider your
actions in ordering LBO Enterprises to divest of the Cranmore Ski
Area. As a senior citizen pass holder, my pass allowed me to ski at
either Attitash Bear Peak or Cranmore, since both are owned by LBO.
The opportunity to choose makes it possible for me to enjoy the
best conditions of the day. North facing Attitash may be
uncomfortable on a cold windy day, but the alternative, Cranmore
with its southern exposure can be a better choice. Conversely, on a
warm sunny day Attitash becomes the mountain of choice. Should these
two areas become owned by separate entities, I would no longer have
the luxury of choice and thus, my skiing pleasure would be damaged.
It should also be noted that LBO has done an outstanding job of
upgrading Cranmore's facilities and has consistently produced
outstanding snow conditions.
Apparently, the D.O.J. is concerned that LBO holdings will
lessen competition resulting in higher ski ticket pricing. In the
Mt. Washington Valley Area, there are six ski areas, Wild Cat, Black
Mtn, Shawnee Peak, Bretton Woods, Attitash and Cranmore. It would
seem that the existence of four independent competitors, within a
few miles of the subject areas, would exert pricing pressure which
would keep LBO area prices competitive.
I respectfully ask your reconsideration of your position and
allow Cranmore to remain a part of LBO Enterprises subject to your
review another year.
Sincerely,
Charles Morse, Jr.,
19 Green St., Newbury, Mass. 01951.
McLane, Graf, Raulerson & Middleton, Professional Association
July 16, 1996.
Anne K. Bingaman,
Asst. Atty. General, Antitrust Division, U.S. Department of Justice,
Constitution Avenue, NW., Washington, DC 20530
Dear Ms. Bingaman: I am writing to you with respect to the
recent newspaper articles that the Justice Department has required,
as a condition for acquisition of SKI Limited, that LBO sell its
interests in Mt. Cranmore in North Conway and Waterville Valley in
Campton, New Hampshire.
As a matter of introduction, please understand that for over
thirty (30) years, I served as General Counsel and as a Director of
Mt. Attitash Lift Corporation in Bartlett, New Hampshire. In July,
1994, LBO acquired the stock of Mt. Attitash. Since that time, the
acquirer has constructed two lifts and constructed several new
trails at Attitash. This represents the first substantial capital
investment in Attitash, and in any Mount Washington ski area, in
many years.
As someone who was vitally involved on a daily basis in the ski
industry over years, I understand that industry far better than
anyone from Washington, DC, no matter how well intentioned or well-
educated that person may be. I can tell you that as a Director and
officer of Attitash, it was a challenging task to keep that
operation out of the hands of the Bankruptcy Courts. We struggled,
and struggled, and struggled for years to survive. From time to
time, we made capital improvements and through good management, we
were able to survive. At the time that we sold our operation to LBO,
there was no other buyer on the horizon. We sold the property for
what we believed was a fair consideration for our shareholders.
As a purchaser, Mr. Otten and his corporation were under no
obligation to make any improvements at any particular time. We were
extremely pleased to see that in the first six months of his
ownership, he installed a quad-chairlift and constructed three new
trails. During the second twelve months of his ownership, Mr. Otten
installed a high-speed quad, three additional chairs, and a 10,000
sq. foot base building, parking area, etc. All of this was done in a
first-class manner.
The beneficiaries of these investments are not just the people
who ski in that area, but the entire population of that area.
Suddenly, people began to spruce up their motels and restaurants,
invest funds in those facilities, all in anticipation of the
additional passenger traffic that these investments would
undoubtedly generate. I don't think anyone has been disappointed in
these investments, at least until now. In the summer of 1995, Mr.
Otten acquired Mt. Cranmore in North Conway. This was a facility
which was one of the very first major ski areas in the United
States. Unfortunately, the ski area had long since lost its
attractiveness to the skiing public and had fallen on very bad
times. For the past several years, the ski area has been operated by
Bay Bank, which received a deed in lieu of foreclosure from its last
owners.
Similar to the experience at Attitash, Mr. Otten and his
corporation not only acquired the area, but immediately installed a
high-speed quad, made other improvements in the area, and began to
breathe life into what many believed to be a fatally ill ski area. I
can tell you as someone who lives in the Mount Washington Valley and
knows many individuals in that area, that this effort by Mr. Otten
was the most significant step in many, many years. New Hampshire was
extremely hard-hit by the recession of the late '80s. The area most
hard-hit was the real estate market and I believe the most hard-hit
geographical area was northern New Hampshire. Suddenly, Les Otten
came to town and started to invest in an area that everyone else
thought was fatally ill, if not dead. This was an extremely
important move psychologically.
As an attorney, I do not understand the position of the Justice
Department, but I am not well enough acquainted with the intricacies
of these issues to begin to comprehend the problems anticipated. All
I can tell you is that there are four major areas in the Mount
Washington Valley of New Hampshire, namely, Attitash, Black
Mountain, Cranmore and Wildcat. In addition, there is King Pine Ski
Area some 15 miles south. For a single operator to operate both
Cranmore and Attitash makes a lot of sense and provides an economy
of scale which makes this operation profitable. Standing alone,
Cranmore has not been able to make a profit or even survive.
The decision to require Mr. Otten and his corporation to
jettison Cranmore is simply a very bad decision, both from the point
of view of ski area operations and the point of view of the
community. The community desperately needs Les Otten to own and
operate Cranmore. Anything that could be done in this regard to
assure that that will continue to happen will be of great benefit to
this portion of the State of New Hampshire.
I would be more than pleased to answer any questions or supply
any specific information that you require.
Thank you very much for your kind cooperation.
Sincerely yours,
Jack B. Middleton.
cc: The Honorable Charles F. Bass, M.C., The Honorable William H.
Zeliff, Jr., Senator Judd Gregg, Senator Robert C. Smith
Robert & Kim Adair
July 16, 1996.
Craig W. Conrath,
Chief, Merger Task Force, U.S. Department of Justice--Anti-Trust
Division, 1401 H Street NW., Washington, D.C. 20530
Re: Ski Area Merger
Dear Mr. Conrath: I am writing in strong opposition to the
Justice Department's recent decision to require The American Skiing
Company (merger of LBO Holdings and SKI Limited) to divest two of
its ski areas.
Cranmore has been a vital part of the Mt. Washington Valley's
economic picture since the 1930s. In recent years, its financial
status, and to some degree, that of the Valley, has been strained.
Since LBO's acquisition of Cranmore in the summer of 1995,
significant improvements have been made to the resort, including
installation of a badly-needed high speed quad chairlift. As a
result, the Mt. Washington Valley as a whole has benefited from
these improvements.
LBO operated both Cranmore and Attitash/Bear Peak last winter
and offered fairly priced tickets that were interchangeable at both
mountains. The flexibility of being able to ski at two
characteristically different ski areas offered skiers an excellent
choice given the variable weather and snow conditions typical of New
England. The joining of these two mountains created a stronger,
better ski environment for locals and visitors alike. Many people,
including myself, bought tickets which were valid for a two year
period. The value of unused tickets has been diminished by your
decision.
The Department of Justice's claim that the LBO/SKI merger would
diminish competition is absurd, and hints of a decision made by
bureaucrats unfamiliar with our local area and the ski industry in
general. Ski area competition in the Mt. Washington Valley is very
healthy and currently consists of King Pine, Shawnee Peak, and Black
Mountain, all comparable in size to Cranmore; and Loon, Cannon,
Wildcat, and Bretton Woods, which are comparable to Attitash/Bear
Peak. The potential of higher prices as a result of this merger is
clouded by one simple fact--if prices are too high, people will ski
elsewhere. The quality and commitment LBO has made to producing the
[[Page 56020]]
best ski conditions is the reason no one wants them forced out.
Please reverse your decision regarding this merger. The
community has a much better handle on the value of LBO's ownership
of Cranmore--we live here and can understand and appreciate what
this organization has contributed to our area. Please don't ruin
this for us.
Sincerely,
Robert E. Adair.
William D. Quinn
July 18, 1996.
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Dept. of Justice,
1401 H Street NW., Washington, D.C. 20530
Re: Consent Decree Les Otten/LBO
Dear Sir: Your actions with regard to the above noted decree is
without a doubt the single best option in this case. Les Otten is no
less a preditor than Bill Gates, with concerns only for profit, not
for the quality of life. Your action will help maintain the quality
of life here, in particular, the blocking of the continuing downward
trend of wages brought on when one company controls the region.
Stick by your decision and do not let political parasites like
Zeliff, Gregg and Smith turn a great decision from good to bad.
Very truly yours,
William D. Quinn,
P.O. Box 21, Madison, N.H. 03849.
Alvin J. Coleman & Son, Inc.
July 18, 1996.
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H St., N.W., Washington, D.C. 20530
Dear Mr. Conrath: As a businessman located in the Mount
Washington Valley, I want to express my disappointment in the
Department of Justice' ruling concerning the divestiture of Mount
Cranmore from the American Skiing Company (formerly LBO
Enterprises).
The economy in the Valley has been very sluggish, to say the
least, in the past several years. We were all very excited about
LBO's plans for Mount Cranmore and were anticipating renewed growth
in the region. The decision by the Department of Justice is a hard
blow to an area which depends so heavily on year round tourism.
I urge you to reconsider the recent ruling and take into
consideration the impact on our local economy on the sale of an
entity which up until very recently has been struggling financially
for years.
Please feel free to call, if you would like to discuss this
matter.
Sincerely,
Calvin J. Coleman,
President.
cc: William H. Zeliff.
Tech Works
July 16, 1996.
John W. Van Lonkhuyzen,
Attorney, U.S. Dept. of Justice, City Center Bldg.--Room 4000, 1401
H Street NW, Washington, DC 20530
Re: U.S. v. American Skiing Co. & S-K-I, Ltd. (C.A. No. 96-1308)
Dear Mr. Van Lonkhuyzen: Thanks for all your time in our phone
conversation last week, and thanks for your letter of July 12, 1996,
including the enclosures on HHI and DOJ's 4/2/92 ``Horizontal Merger
Guidelines''. They should be very helpful in understanding Justice's
position on this matter.
For your information, I have enclosed my letter dated June 30,
1996 to Mr. Conrath. I imagine you would have seen this eventually,
but I wanted you to have a copy now in case we have further
conversations.
My letter was written before I had fully thought through the
pro-competitive aspects of this merger. As we discussed on Friday,
ASC's ability to draw from a much wider area by reason of offerings
including Cranmore along with its sister slopes, holds the
possibility of huge savings for the company. More skiers during mid-
week could do a lot to hold down prices for skiers of all types
(day, weekend and week long) from all locations. It is a potential
that may be unique to ASC (LBO) due to its ownership of other nearby
slopes. I'm not sure Justice properly focused on this aspect.
As you know, the Town of Conway has formed a committee to
respond to what has transpired. I believe that committee will expand
upon this and other matters of concern.
Yours truly,
David S. Urey,
cc: D.M. Laws.
Maryellen Maguire LaRoche
July 23, 1996.
Craig Conrath,
Chief, Merger Task Force: Anti-Trust Division, US Department of
Justice, 1401 H Street, NW., Washington, DC 20530.
Dear Mr. Conrath: I am a resident of Conway, NH and this letter
is in response to the US Department of Justice recent decision
regarding the American Skiing Company's acquisition of SKI Limited.
I am also an avid skier for over 30 years and a condominium owner at
Sunday River Ski Resort in Newry, Maine, a property built and
managed by LBO (nka American Skiing Company).
I am in full agreement with the Justice Department decision
regarding the American Skiing Company acquisition. It is my
understanding that the decision regarding the sale of Waterville
Valley and Cranmore Mountain was developed by LBO to meet Justice
Department concerns regarding antitrust. Cranmore is essentially
LBO's weak resort, purchased a year ago at a bargain basement price,
and was not a great sacrifice in terms of market share control and
the profit potential of the larger deal which was completed as
scheduled. The American Skiing Company could have chosen another ski
area, it was their option to offer the sale of Cranmore. Antitrust
issues continue to be an area of great concern, as well as the
tremendous debt ratio absorbed by the American Skiing Company to
acquire these other large ski areas in a volatile, weather
dependent, and often low profit margin industry. Ski areas drive the
winter economy of Northern New England and many of the acquired ski
areas have demonstrated major commitments to their communities
economic health and have also developed year round operations. It
remains to be seen if the American Skiing Company will be as
committed to the economic development of these communities as their
previous owners demonstrated. Their short attention span regarding
Cranmore is not a good example of a commitment to the Conway
community.
The amazing piece of this puzzle is the local press campaign
slamming the Justice Department for doing its job. It is well known
by skiers and owners at Sunday River Resort that LBO's major goal is
to control the New England market share, control ticket prices and
eliminate discounting. All other claims, such as potential lower
ticket prices due to economies of scale, are typical LBO marketing
hype. Just listen to their ski reports: LBO resorts always have 6
more inches of snow than your house at the base of the mountain; its
amazing how brazen a company they are in terms of marketing hype.
LBO only discounts when their competition is discounting and
impacting their skier visits and profit margin. Thank you for
preventing an LBO takeover of New Hampshire ski resorts. You were
right on target. I sincerely hope you will continue to monitor the
development of the American Skiing Company.
Sincerely,
Maryellen LaRoche.
Locust Hill
July 25, 1996
Craig W. Conrath,
Chief of Merger Task Force, Antitrust Division, US Dept. of Justice,
1401 H Street NW., Washington, DC 20530
Dear Mr. Conrath: I am writing in support of the continued
ownership of Mount Cranmore by Less Otten and LOB. Cranmore is an
important part of Conway's economic mix. It is the center point of
our winter business. As a tourist attraction it can be, as it has
been in past years, a major destination for our summer and winter
visitors.
Cranmore is, in the scheme of ski areas, a small area. It has a
limited base of skiers; families and beginning skiers. But along
with Attitash, it becomes part of a very attractive package. The
economics of a small area these days is not a rosy picture. With
high insurance costs, demands for bigger and better snowmaking, and
the costs of adverting, economics of scale can make an area a viable
business.
Cranmore has not had responsible management for many years and
has twice been on the brink of bankruptcy. Now, with an owner who is
a solid business man and understands skiing and the skier, Cranmore
finally has a chance to thrive.
The pricing of tickets, according to the papers, seems to be
your main concern. The money spent on tickets is discretionary
money. If people feel that the cost of tickets is too high they will
not buy them. A business needs purchasers of it's services in order
to survive. If people stop buying tickets LOB would have to lower
the ticket costs to lure the skier back.
[[Page 56021]]
Please leave along what appears to many in the town to be a
situation which benefits not only Conway but the entire Mount
Washington Valley.
Sincerely,
Cynthia B. Briggs,
Selectman, Town of Conway 1989-1995, Planning Board, Town of Conway,
1995-1999, School Board, Town of Conway 1975-1981, Budget Committee,
Town of Conway.
copies: Phil Gravink, Pres. Attitash, William Zeliff, U.S. Rep.,
Judd Greg, U.S. Senator, Robert Smith, U.S. Senator.
James H. Hastings
July 31, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H. Street NW, Washington, D.C. 20530
Re: Mt. Cranmore, Conway N.H.
Dear Mr. Conrath: As a resident of Massachusetts and one who
skies frequently in the North Conway area, I am submitting my
coments regarding the proposed divestiture of Mt. Cranmore. Unlike
other areas in the Country, North Conway has many ski areas in the
vicinity, all with ownership other than the one currently owning Mt.
Cranmore and Attitash. Within a one hour drive the following
independent ski areas are located: Bretton Woods, Cannon. Black,
Wildcat and King Pine. Additionally, skiers from eastern
Massachusetts have the option of travelling to the Route 93 side of
New Hampshire, eastern Maine or Vermont. This type of competition
does not, in my mind create a monopoly. What is clear however, is
that operating a ski area takes management expertise and capital,
both of which have been evident since the current ownership
purchased Mt. Cranmore.
During the winter of 1995-1996, I skied at Mt. Cranmore and was
very pleased with the changes incorporated. These changes made Mt.
Cranmore a pleasant place to ski, and more importantly contributed
to the economy of North Conway.
My concern is that if Mt. Cranmore is forced to be sold to less
experienced or less capitalized ownership, the mountain and the
town, would suffer. I ask that you seriously consider alternatives
to forcing divesture of Mt. Cranmore.
Very truly your,
James H. Hastings,
55 Stetson Street, Bradford, Massachusetts 01835.
John B. Pepper
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street, Washington, DC 20530
Re: Cranmore Mountain Ski Area, North Conway, NH
Dear Sir: Our family learned with great concern of the consent
decree to which LBO Enterprises was forced to agree in order to
accomplish the merger with S.K.I. Ltd. requiring the divestiture of
Cranmore and Waterville Valley.
We are not as familiar with the Waterville situation as to
whether it is possible for this area to be successful on its own or
under some other ownership.
We are very familiar with the Cranmore situation and have very
serious doubts that it can be successful without continuing the
enlightened management of LBO.
This area was on the verge of being unable to continue in
business and might well have gone the way of other small ski areas
in our area had not Les Otten come to the rescue with new management
and capital to rescue it from the brink.
It is not only capital that is required for a successful
operation of a ski area but also enlightened management and that
type of management is exactly what LBO brought to this area that had
been slowly dying over the last several years.
LBO also brought leadership in the important vacation industry
which is so important to New Hampshire but also financial strength
and marketing skills that are so much more successful when combined
with several other regional ski businesses.
The whole thrust of LBO marketing has been to bring more
vacationers to New England not only from the U.S. but also from
Europe.
There is no lack of other competition in Northern New England so
that any concern about the public suffering from multiple ownership
of areas is unfounded. Even in Mount Washington Valley this
competition exists but all local business is convinced that LBO will
benefit all business in the valley--even other ski areas not under
LBO ownership.
We emplore that you reexamine this unfair conclusion of the
Justice Department. We ask that every consideration be given to
reversing this decision involving Cranmore Mountain.
Sincerely,
John B. Pepper,
Alice W. Pepper.
Prescilla A. Morse
July 16, 1996.
Subject: D.O.J. divestiture order relative to LBO Cranmore Ski Area
Gentleman: I respectfully request that you reconsider your
actions in ordering LBO Enterprises to divest of the Cranmore Ski
Area. As a senior citizen pass holder, my pass allowed me to ski at
either Attitash Bear Peak or Cranmore, since both are owned by LBO.
The opportunity to choose makes it possible for me to enjoy the
best conditions of the day. North facing Attitash may be
uncomfortable on a cold windy day, but the alternative, Cranmore
with its southern exposure can be a better choice. Conversely, on a
warm sunny day Attitash becomes the mountain of choice. Should these
two areas become owned by separate entities, I would no longer have
the luxury of choice and thus, my skiing pleasure would be damaged.
It should also be noted that LBO has done an outstanding job of
upgrading Cranmore's facilities and has consistently produced
outstanding snow conditions.
Apparently, the D.O.J. is concerned that LBO holdings will
lessen competition resulting in higher ski ticket pricing. In the
Mt. Washington Valley Area, there are six ski areas, Wild Cat, Black
Mtn, Shawnee Peak, Bretton Woods, Attitiash and Cranmore. It would
seem that the existence of four independent competitors, within a
few miles of the subject areas, would exert pricing pressure which
would keep LBO area prices competitive.
I respectfully ask your reconsideration of your position and
allow Cranmore to remain a part of LBO Enterprises subject to your
review another year.
Sincerely,
Priscilla A. Morse,
19 Green St., Newbury, MA 01951.
Mr. Peter B. Edwards
August 1, 1996.
Mr. Craig W. Conrath,
Chief--Merger Task Force, Anti-Trust Division, US Dept. of Justice,
1401 H St. NW., Washington, D.C. 20530
Re: LBO Holdings, Inc./Ski, Ltd.
Dear Mr. Conrath: I am writing in regards to the requirement by
the Justice Dept. that LBO Holdings divest itself of Mt. Cranmore.
As a skier and consumer of the skier services that LBO provides in
the Mt. Washington Valley. I am firmly in opposition to the
divestiture requirement. I believe this opinion is shared by many
other skiers both in the valley, and outside.
LBO Holdings has been a skier's friend. They invest in the
mountains they run and provide a quality skiing experience. One need
only to observe what has happened at Mt. Cranmore in the year since
LBO has owned the business. They improved the mountain tremendously
and lift prices have not increased out of line with other areas.
It is my understanding that the anti-trust activities of the
Justice Department are to protect the consumer or other parties from
unfair competition. There is still plenty of competition in the Mt.
Washington Valley. There are 6 ski areas within a 20 mile radius of
North Conway. LBO owns only 2 of these. Additionally, LBO has not
exhibited any kind of predatory pricing practices. What is good for
one ski area in terms of traffic has benefits for other neighboring
ski areas.
I would be pleased to testify in this matter in support of the
effort to drop the Mt. Cranmore divestiture. Thank you for your
consideration.
Yours truly,
Peter B. Edwards
Glass Graphics, Inc.
August 1, 1996.
Mr. Craig W. Conrath,
Chief--Merger Task Force, Anti-Trust Division, US Dept. of Justice,
1401 H St. NW, Washington, D.C. 20530
Dear Mr. Conrath: Please add my name to the list of those
businesses in the Mt. Washington Valley who strongly oppose the
requirement that LBO Holdings sell Mt. Cranmore in order to complete
the merger with Ski, Ltd.
This makes absolutely no sense to me. LBO is hardly the kind of
business which the Anti-Trust regulations were meant to deal with.
Les Otten and his company have been a friend of consumers and
competitors alike.
[[Page 56022]]
He has invested heavily in Mt. Cranmore and this has benefitted all
the ski areas by bringing in more skiers to the Mt. Washington
Valley. Just ask them.
I would urge you to hold local hearings on this matter to hear
from consumers and competitors. The overwhelming opinion will be in
favor of allowing LBO to retain Mt. Cranmore.
Yours truly,
David Peterson,
Pres.
Miriam L. Regan
Craig W. Conrath,
Merger Task Force, Antitrust Div.
Dear Sir: Please use your influence to reverse the decision on
the divestiture of Cranmore in No. Conway, N.H.
The accessible location of the ski area to the town is
exceptional and all important to our local economy.
Sincerely,
Miriam L. Regan
Pam and Bob Fisher
3 August, 96.
Dear Craig Conrath: Grateful for your prompt reply to my earlier
letter and sympathetic with the flood of mail you are doubtless
receiving, I shall be brief. It is the economy of scale which
enables Les Otten to continue to provide quality skiing at the
lowest possible price. This we well know as 70+ skiers who can
afford to ski the Cranmore-Attitash-Bear P complex economically.
Having skied-raced-coached in this valley since the '40s, both my
wife and I, our children, and our grandchildren are intensely aware
of the roller-coaster character of ski area finances and how they
impact consumer quality experience. It is our non-expert opinion
that ``keeping Cranmore under the American Skiing Company's umbrella
(will best) protect and bolster the Valley's tourism dependent
economy.'' Again, thank you for attending.
Sincerely,
Pam & Bob Fisher,
615 Potter Road, Center Conway, NH 03813.
Christopher J. Cote
July 29, 1996.
Craig W. Conrath,
Chief of Merger Task Force, Antitrust Division, US DOJ, 1401 H
Street, NW., Washington, DC 20530
Dear Mr. Conrath: It is with deep concern that we write this
letter regarding the Department of Justice's recent divestiture
ruling on LBO's forced sale of Mt. Cranmore in North Conway, New
Hampshire. Hopefully, you are aware of the history of Mt. Cranmore
in the Mount Washington Valley. Not only is it of historic value,
but the financial history in recent years has not been the best. We
have skied the area for years and feel its impact in the Valley.
This mountain cannot stand on its own. The comparison of Mt.
Cranmore to the other areas is not an equal comparison. This
mountain is a small intermediate mountain that, until Les Otten, was
about to close. The package of including it with Attitash and Sunday
River as a combo ticket and as an advertising program during the
past year, has brought new life to the mountain and the valley.
We would greatly appreciate it if you would reconsider your
decision regarding this mountain. It needs the strong and
knowledgeable leadership of LBO. Many of us who live in the
Massachusetts and Rhode Island area would rather have the
opportunities to ski a progressive area with a future than a
discounted, old and perhaps closed mountain.
For the communities of the area and the skiers of New England,
please take a second look at this decision!!!
Thank you,
Christopher J. Cote,
29 Essex Street, Lowell, MA 01850.
Ronald F. Cote
July 29, 1996.
Craig W. Conrath,
Chief of Merger Task Force, Antitrust Division, US DOJ, 1401 H
Street, N.W., Washington, DC 20530
Dear Mr. Conrath: It is with deep concern that we write this
letter regarding the Department of Justice's recent divestiture
ruling on LBO's forced sale of Mt. Cranmore in North Conway, New
Hampshire. Hopefully, you are aware of the history of Mt. Cranmore
in the Mount Washington Valley. Not only is it of historic value,
but the financial history in recent years has not been the best. We
have skied the area for years and feel its impact in the Valley.
This mountain cannot stand on its own. The comparison of Mt.
Cranmore to the other areas is not an equal comparison. This
mountain is a small intermediate mountain that, until Les Otten, was
about to close. The package of including it with Attitash and Sunday
River as a combo ticket and as an advertising program during the
past year, has brought new life to the mountain and the valley.
We would greatly appreciate it if you would reconsider your
decision regarding this mountain. It needs the strong and
knowledgeable leadership of LBO. Many of us who live in the
Massachusetts and Rhode Island area would rather have the
opportunities to ski a progressive area with a future than a
discounted, old and perhaps closed mountain.
For the communities of the area and the skiers of New England,
please take a second look at this decision!!!
Thank you,
Ronald F. Cote,
Joyce A. Cote, 29 Essex Street, Lowell, MA 01850 & 31 Conway Road,
Madison, NH.
Maine Turf Co.
August 6, 1996.
Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, US. Department of
Justice, 1401 H Street NW., Washington, DC 20530
Dear Mr. Conrath: I am writing to express my disbelief and
concern over the ruling from the Justice Department forcing Mr.
Otten to sell-off Cranmore. I thought the Anti-Trust laws were no
longer in effect. It is difficult to understand why Otten's small
portion of the ski market is a threat to our free market economy
when so many companies control much larger portions in the market
place. I speak from experience; I raise potatoes for the potato chip
market. One of my past customers is the Frito-Lay Corporation; a
subsidiary of PepsiCo. In the mid eighties the Frito buyer
communicated the company's market strategy. He said Frito-Lay will
stabilize the chip industry. I asked what that meant. The buyer
divulged a plan to control the potato chip market. First large
plants were being built to reduce unit cost. Second, the better
growers (farmers) will be instructed to sell potatoes exclusively to
Frito-Lay. Finally, any amount of money would be spent to buy store
space and run promotions to apply financial pressure against smaller
manufacturers. Frito wanted my operation to be a part of their team.
That meant I would no longer sell to other manufacturers.
That's wrong and I stopped doing business with Frito-Lay. Today,
Frito-Lay controls at least 60% of the national market. Most of
their competition is no longer in business. A visit to our local
Shop & Save is proof; the chip isle is dominated by Frito products
and they still pay extra for end displays even though they have
little competition. Their plan worked.
This is why I find it absurd that the Justice Department is
going after Mr. Otten while looking the other way as large
corporations forage at will. Otten invested in vital improvements
and upgraded management at Cranmore. These improvements are a great
benefit to the whole community. I don't understand the logic of this
order to divest.
Respectfully,
Douglas C. Albert,
President, Albert Farms/Maine Turf Company.
Locust Hill
August 5, 1996.
Craig W. Conrath,
Chief of Merger Task Force, Antitrust Div., U.S. Dept. of Justice,
1401 H Street NW., Washington, D.C. 20530
Re: Mt. Cranmore and LBO merger
Dear Mr. Conrath: I strongly support the continued ownership of
Mt. Cranmore by LBO Inc.
I have owned and operated two tourist businesses in North Conway
over the past 40 years, owning each for 20 years. Until 1975, about
50% of our business was ski oriented. Since 1975, our winter tourist
business has steadily eroded--as the fiscal stability of Mt.
Cranmore has weakened.
With the purchase of Mt. Cranmore by LBO last year, North Conway
has been given new hope for its winter season in the future.
Many (most?) ski areas are marginal business enterprises at
best. Please leave us with one of the few successful operators--Les
Otten.
Sincerely,
Conrad Briggs,
Past President; North Conway Chamber of Commerce, Past President;
Eastern Slope Ski Club.
c. Phil Gravink
[[Page 56023]]
Hurricane Mtn. Farmhouse
5 August 1996
Mr. Craig W. Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street NW., Washington, D.C. 20530
Dear Mr. Conrath: I applaud the willingness of the Division to
gather additional information on the Mount Cranmore divestiture
order and have some hope that this will lead to a reconsideration.
My interest is that of a citizen who has lived summers and now
permanently within a mile of these slopes more than a decade before
they were purchased by Harvey Gibson. Cranmore is woven into the
history and present life of this Valley.
To date I have not seen a statement from your office that
explains why the action was required prior to approving the merger
sought by Mr. Otten. Do the data collected and analyzed support a
conclusion that Otten's share of the skiing market will produce
higher ticket prices? Does the analysis include the discretionary
nature of consumer spending for a recreational activity carried
forward under highly unpredictable and perishable conditions? Does
the Division consider skiing as an activity high enough in the order
of consumer importance (i.e., compared to food, fuel, telephone,
etc.) to make antitrust action necessary?
If Otten or American Skiing uses its 25% market share of New
England downhill skiing to boost prices beyond consumer willingness
to pay, there are many other slopes available in New England and
even further distant. Cranmore will immediately show a reduction in
ski runs. There can be no time for ``wait and see''; the snow must
be sold before it melts. Not only that but downhill skiing already
has lost its growth potential as other less expensive winter sports
have developed.
Has the Division examined the financial statements of Cranmore
for the last 10 years to determine its profitability? In how many
years were its property taxes in arrears? Were the electric power
bills paid on time? Was new and improved lift equipment installed?
How ``good'' was the snowmaking? Can Cranmore stand alone as a ski
operation or is it ``assisted'' by being tied to another operation
such as Attitash thus achieving economies? Isn't there an advantage
in one company marketing a Valley ski experience? Have the other
Otten ski operations in Maine and Vermont been checked for the kind
of conspiracy in restraint of ski recreation that the Division seems
to anticipate?
I suggest the Division take a ``second look'' and give greater
attention to the fragility of downhill ski resorts and of their
impact on the economic and social life of a mountain area not
especially known for its great wealth. The capital and business that
Otten has brought and will bring here can be felt by all residing in
the Valley.
Faithfully
Richard A. Ware
Stephen P. Camuso
July 5, 1996.
Craig W. Conrath,
Chief of Merger Task Force, Antitrust Division--US DOJ, 1401 H
Street NW., Washington, DC 20530
Dear Mr. Conrath: I am writing concerning the recent action
taken on the acquisition of Cranmore Mountain in No. Conway, New
Hampshire by LBO. As a visitor to the Mt. Washington Valley area
since 1959 and a landowner since 1981, I am very much concerned
about LBO having to divest themselves of the Mt. Cranmore property.
Since 1959, we have found skiing to be a great family sport and
one that is generally carried on by the next generation with their
families, Such is the case of both my wife and I and now our
children. We invested in a vacation home in the Valley because of
its proximity to our Boston area home and the ``family theme'' and
layout of Mt. Cranmore. In the years that we have skied exclusively
at Mt. Cranmore there have been three owners before LBO purchased
the property in 1995. Initially, each owner enthusiastically moved
forward with new projects to better the area only to run out of
money after a few years and allow the property to decline over time
until a new owner could be found.
It's apparent that the area will only survive with an owner who
can afford the ups and downs of such a seasonable business. Many of
us who have supported Mt. Cranmore through these ups and downs
realize this and were excited with the LBO takeover. They
immediately went back to basics and invested in such needed things
as a new septic system for the top of the mountain which allowed for
the reopening of the restaurant and bathroom facilities--something
the previous three owners had failed to do. They immediately
installed a new detachable quad chair which made the mountain
accessible for evening meals and use in the summer. What we saw was
a real commitment to bring Mt. Cranmore up to the standards of the
other LBO properties.
We find that each ski property has it's own attraction. For
example, in the 37 years that our family has been skiing in the Mt.
Washington Valley, we have only visited the other mountains a
handful of time. One mountain is no threat to another and the
strength of the whole valley is based on the success of all the
mountains. We are all aware of the risk involved in the ski
business. A firm the size of LBO is able to minimize this risk which
can only be a benefit to those living and working in the Valley as
well as the property values of second home owners who have invested
in the area. We look forward with enthusiasm to LBO's continued
investment in Mt. Cranmore.
Sincerely,
Stephen P. Camuso,
14 Cranmore Circle, No. Conway, NH 03818.
Alfred C. Peters, D.M.D., M.S.W., C.A.C
Dear Mr. Conrath: I have skied, climbed, and lived in the Mt.
Washington Valley for over \1/2\ century. The environmental and
economic integrity of this area is dependent on the viability of Mt.
Cranmore, Mt. Attitash and Sunday River in Maine.
Mr. Otten is the one person who is capable of enchancing the
well-being of our community by uniting these three areas for out
common well-being.
Please ``Reverse the Decision.''
Sincerely,
Alfred C. Peters
National Federation of Independent Business
August 14, 1996
Mr. Craig Conrath
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street, NW., Washington, DC 20530
Dear Mr. Conrath: NFIB is the largest small business advocacy
organization in the nation representing over 600,000 small and
independent business owners.
One of our members, Brain Hill of Intervale New Hampshire, has
sent us information regarding the divestiture order pending against
Les Otten of LBO Enterprises, Inc. If this order is carried out,
many NFIB members in New Hampshire will be adversely affected. The
profitability of their small businesses depend on the dollars spent
by Les Otten to advertise and draw tourists to Cranmore and
Waterville Valley.
On behalf of our members, we urge you to reverse your decision
and cancel the order to divest.
Thank you for your attention to our comments.
Sincerely,
Joan M. Moeltner,
Membership Liaison.
cc: Brian Hill.
New Hampshire Electric Cooperative, Inc.
August 26, 1996.
Craig W. Conrath,
Chief, Merger Task Force, Anti Trust Division, US Dept. of Justice,
1401 H Street, N.W. Washington, D.C. 20530
Re: United States v. American Skiing Co. and S-K-I Limited, Civil
Action No. 96-1308 TJP
Dear Mr. Conrath: I am writing you to express my strong concern
over your required divestiture of Mt. Cranmore by LBO. I believe
that your action will be detrimental to the citizens of the Mount
Washington Valley, the members of New Hampshire Electric
Cooperative, and the future of Mt. Cranmore.
New Hampshire Electric Cooperative is a member owned electric
distribution utility serving about half the towns in the State of
NH. We serve a number of ski areas including Mt. Cranmore,
Waterville Valley, Loon Mt., Attitash, Tenney Mt., Highland Ski
area, and Black Mountain. We have extensive experience dealing with
troubled or bankrupt ski areas. We have served on the creditors
committee for Tenney Mt. We have been chair of the creditors
committees for Waterville Valley and Black Mountain. We also have
followed closely the issues related to Mt. Cranmore's bankruptcy.
We were delighted when LBO (Now ASC) acquired Mt. Cranmore. They
injected life into a small market Mountain. Their investments
created jobs and opportunities to a ski area that was struggling.
Our concern is that your divestiture requirement sets Cranmore
floundering once again. Going back to the way things were just a few
short years
[[Page 56024]]
ago would be detrimental to business in the Valley, the employees of
Cranmore, this Cooperative and the skiers of New Hampshire, Maine
and New England.
Having been involved in the Black Mountain and Waterville
bankruptcies I know that there are limited serious buyers for ski
areas. There are fewer if any serious buyers with the financial
means to be successful with a mountain the size of Cranmore. The
fact is Cranmore was on the market for a long period of time before
being purchased by LBO. I believe your action amounts to a death
sentence for Cranmore. I question if a quality buyer will be found
who will continue with the plans that have already been laid out for
the mountain. In the long run this will have the opposite impact on
competition from what you are trying to achieve. One less mountain
to choose from.
I take exception with your justifications for this divestiture.
You focus on the impact on skiers from the states of Maine,
Massachusetts, Connecticut, and Rhode Island and ignore the impact
on New Hampshire's skiers. You taut the specter of higher prices,
but do not recognize that improved services and expanded facilities
are the important aspects of the merger. You fail to understand that
skiers do not make their decision on where to ski based on price
alone. Ski area conditions, terrain, lift capacity, and amenities
such as food, lodging, and shopping are all important factors.
In general, I question the need to divest at all, and especially
the need to divest of two New Hampshire ski areas. There has to be
another solution that satisfies your needs. I hope you will try to
find that solution and I ask you to reconsider your actions and not
require the divestiture of Mt. Cranmore.
Sincerely,
Fred C. Anderson,
General Manager/CEO.
cc: James Somerville, Conway Town Manager, PO Box 70, Center Conway,
NH 03813.
Ronald Barber
August 28, 1996.
Mr. Craig W. Conrath,
US. Dept. of Justice, Washington, DC 20503
Dear Sir: I am taking advantage of the extension of the Public
comment period to write the D.O.J. in opposition to its divestiture
order for American Skiing to sell Mt. Cranmore, of N Conway, NH.
I have been a resident of N Conway for 13 years, and have at
time worked part-time at Mt. Cranmore, but not within the past 3
years.
Mt. Cranmore is viewed almost as a public trust in our area and
provides employment and recreational opportunities at the core of
this community.
Membership in a marketing group such as Attitash-Bear Peak-
Cranmore can insure that Mt. Cranmore can maintain a competitive
position, and acquire capital and assets with economy of scale.
Standing alone, Mt. Cranmore doesn't have the size or terrain to
stack-up favorable against other ski mountain complexes in NH or
Western Maine, further, Mt. Cranmore's opportunities to expand its
facilities is fairly limited.
The overall Mt. Washington Valley region economy stands to gain
more if our tourism guest's entertainment options are viewed as
economically healthy enterprises.
Mt. Cranmore has always suffered boom and bust cycles coinciding
with ownership changes injecting fresh funds.
Membership in a corporation such as American Skiing seems to be
a more positive step towards steadier improvements, growth, and
financial outlook.
We oppose D.O.J.'s divestiture order.
Sincerely yours,
Ronald Barber,
Pamela A. Barber,
364 Thompson Rd, N Conway, NH 03860.
State of New Hampshire
August 30, 1996.
Mr. Craig Conrath,
Chief, Merger Task Force, Antitrust Division, U.S. Department of
Justice, 1401 H Street, NW., Washington, D.C. 20530
Dear Mr. Conrath: We are writing you to strongly request a
reversal of the order to LBO Enterprises, Inc., to divest itself of
ownership of Cranmore Mountain and Waterville Valley ski areas. As
we understand the intent of anti-trust laws, they are to protect
small business and the population in general. Your divestiture order
in fact creates a situation which the law intends to abate. Let us
explain in greater detail.
Both ski areas have been through bankruptcy proceedings within
the past 5 years and during this period of time have been a
detriment, not an asset, to their surrounding communities. Until Les
Otten and LBO Enterprises, Inc., obtained ownership, neither ski
area was operating in the black side of the ledger. Under his
guidance, both areas have returned again to their once profitable
position; and more importantly, the adjacent communities have seen a
tremendous increase in tourist dollars for their small businesses.
We believe that, based upon past experience, any new owner(s) would
not have the capital nor expertise to maintain Mr. Otten's marketing
programs, and the ultimate loss will be to the citizens of the north
country of New Hampshire. We cannot sit passively by and allow this
to happen.
We truly hope that you will re-consider your position, and at
the very least, advise us to the reasoning behind any decision to
continue the divestiture order.
Very truly yours,
William E. Williams, Jr.,
State Representative, Grafton District 3.
For: Howard C. Dickinson, Jr., Carroll District 2, Gene G. Chandler,
Carroll District 1, Henry P. Mock, Carroll District 3, Kipp A.
Cooper, Carroll District 2, Paul K. Chase, Jr., Grafton District 6,
Sid Lovett, Grafton District 6.
Mt. Washington Valley
September 5, 1996.
Craig W. Conrath,
Antitrust Division, U.S. Dept. of Justice, 1401 H. Street NW,
Washington, DC 205530
Dear Mr. Conrath: The Board of Directors of the Mt. Washington
Valley Chamber of Commerce with offices in North Conway, New
Hampshire, are in support of the Task Force set up in our region to
speak to the issue before you on the divestiture of Mt. Cranmore by
the American Ski Company.
We feel that the efforts of the Task Force will show that the
Ski Industry in general needs to be better understood and that this
is an industry which has reached a plateau in regards to pricing. It
has become unaffordable to the greater populace and therefore the
threat of over pricing is of greatest concern to the industry
itself. One of the best ways to control costs is to have companies
which can utilize economies of scale within their own design which
will solidify their own future. The American Ski Company is trying
to do just that.
The health of the Ski Industry is of critical importance to our
region. The ability for the owner of Cranmore to not only have the
financial resources for the long haul, but to have the experience in
the management, growth, and development of Skiing on a large scale
is also vital.
Because the Board of Directors of The Mt. Washington Valley
Chamber of Commerce represent a number of Ski Areas within our
membership ranks, it makes it difficult politically to promote one
area over the other, we can, however, wholeheartedly support this
local Task Force and their efforts to help the Justice Department
better understand the complexities of the Ski Industry and its
impact on this economic region.
Sincerely,
A.O. Lucy,
Executive Director, Mt. Washington Valley Chamber of Commerce.
cc: Board of Directors, Jim Sommerville.
September 7, 1996.
Mr. Craig Conrath,
Anti-Trust Division, U.S. Dept. of Justice, Washington, DC
Dear Mr. Conrath, I am writing about the DOJ order to have OTTEN
sell Cranmore and Waterville Valley. I have just read that other
probably will sell these ski areas to Gillett. However, in case that
sale does not materialize, I want to write you.
I fully support your decision to order Otten to sell Cranmore
and Waterville Valley. I live in Glen, halfway between Attitash and
Cranmore and thus am most familiar with the Cranmore situation. I am
not a businessman; I have no financial interest in Cranmore or
Attitash; I do not work for Cranmore or Otten, I am a PLAIN SKIER. I
believe that making Otten sell Cranmore will BENEFIT me, a plain
skier. With competition I believe I will get better and more skiing
for my money. I thank you for thinking of me.
The local businessmen, local officials, and Congressman
____________________ give arguments stating why Otten should keep
Cranmore. When carefully examined, the argument fall apart.
1. The pro-Otten business forces say that ``economies of scale''
will reduce or keep down ski prices. That's a bunch of baloney.
Perhaps they forget how Otten RAISED Cranmore prices after he took
over. Also the
[[Page 56025]]
business people seem to forget the NEAR-REVOLT of local people when
Otten charged more and restricted the skiing of the local Masters
skiing program.
2. The pro-Otten forces predict a possible disaster to our area
if Otten is forced to sell Cranmore. That is over-speculation and
pure nonsense. They mean PERHAPS not as many dollars in their
pockets. They DO NOT care about the individual skier. If Mr. Gillett
is typical of the possible ski area owners, than other ski area
owners have as much or more interest than Otten in running a good
ski area and in being a good neighbor with those of us who live in
the area.
We need more competition, not less competition, in this area.
On another matter, please be careful with the words that Otten
uses.
1. Otten builds Grand Summit Hotels but they are at the BASES of
mountains, not on the summits.
2. Otten advertises Cranmore-Attitash as ``Ski the
Presidentials.'' In reality the Presidentials are a series of
magnificent mountains some 15 miles from Cranmore-Attitash, in
ANOTHER COUNTY, and some 1000 feet higher than Cranmore-Attitash.
Moreover, it would be dangerous for a normal skier to ski these
above-tree-line peaks.
3. Otten and his people, when planning to build a huge new hotel
in our area, called local residents who expressed concern
``enemies.''
This is the kind of man you are dealing with. Again, I applaud
you for making Otten sell Cranmore. Do not bow to the many letters
that Otten supporters and local businessmen write.
As an individual skier I am glad that someone in our federal
government is trying to look after the interest of the skier.
Yours truly,
Richard M. Chrenko,
P.O. Box 913, West Side Road, Glen, NH 03838-0913.
United States of America v. American Skiing Company and S-K-I Limited
Civil Action No. 1:96CV01308; Filed: June 11, 1996; Comment Period:
September 10, 1996
Mt. Washington Valley Task Force Report: Divestiture of Mt. Cranmore;
Dated: September 5, 1996
Table of Contents
Forwarding Letter
Task Force Members
Opening Statement
Overview of Department of Justice Positions
Task Force Rebuttal:
Market
Monopoly
Competitive Pricing
Maine Day/Eastern New England Weekend Skier
Economic Impact
Overview of Ski Industry Survival
Infrastructure
Global Market
Mergers
Mt. Washington Valley--It's More Than Skiing
Herfindahl-Hirschman Index ``HHI''
Recapitulation of Economists' Input
The Maine Comparison
Conclusion/Recommendation
Have They (DOJ) Gone Out of Bounds?
Research References and New Statistical Information
Appendix
A: Selective Newspaper Articles
B: Selective Letters
C: Task Force Report Endorsements
D: History of Mt. Cranmore ``Flight Without Wings''
E: Marketing Brochures
Town of Conway
September 5, 1996.
Mr. Craig W. Conrath,
Chief, Merger Task Force, Anti-Trust Division, U.S. Department of
Justice, 1401 H Street, N.W., Washington, DC 20530
Dear Mr. Conrath: Enclosed herewith is the response report to
the Department of Justice's judgment order No. 1:96CV01308 requiring
the divestiture of Mt. Cranmore as a condition of the merger of
American Skiing Company and S-K-I Ltd. This report is the result of
many hours, involving meetings, collection of data, research,
interviewing, and discussions by a special Task Force that is
representative of the entire Mt. Washington Valley.
We urge you to read carefully and digest the report's contents.
You will find a considerable amount of current data not used in your
prior deliberations, unbiased professional opinion, feelings from
lay people who are the core and heart of the economic region, and
what we feel is a convincing collaboration of information which
clearly and overwhelmingly justifies a modification of the consent
decree not to require the divesting of Mt. Cranmore.
In the interest of thousands of individuals and families who
reside in Mt. Washington Valley, the hundreds of businesses
established in the Valley, the millions of U.S. and foreign visitors
who vacation-tour-recreate in the valley, we urge you to be open and
fair. If you are, your conclusion should be the same as ours in
recognizing that the divesting of Mt. Cranmore is not in the
public's best interest, there is strong and potentially devastating
adverse economic impact, the Maine day/weekend skier issue is a myth
not a reality, the market has been misunderstood and when properly
defined creates a favorable Herfindahl-Hirschman Index ``HHI'',
competitive pricing is market driven-self policing and not an issue,
the merger does not create a monopoly, and the merger creates a
natural geographic and economic marriage of two ski areas (Attitash
and Mt. Cranmore) assuring the viability and economic growth of Mt.
Cranmore and the region.
The U.S. Department of Justice's cooperation and patience over
the past few months is greatly appreciated.
Any questions you may have should be directed to James B.
Somerville, Town Manager, Conway, NH (603-447-3811), Task Force
Chairman and spokesperson.
With confidence and anticipation we look forward to the
Department of Justice's consent decree modification.
Respectfully submitted,
James B. Somerville,
Chairman, Mt. Washington Valley/Mt. Cranmore Task Force.
Task Force
------------------------------------------------------------------------
Name Position/Business
------------------------------------------------------------------------
William Bartlett, PO Box 1856, Concord, Commissioner--Dept. of
NH 03302-1856, 603-271-2411. Resources & Economic
Development, State of New
Hampshire.
Taylor Caswell, 1210 Longworth House Representative--Congressman
Office Bldg., Washington, DC 20515, Zeliff.
202-225-5456.
John Cavanaugh, 99 Pease Blvd., Representative--Senator Gregg.
Portsmouth, NH 03801, 603-431-2171.
Mark Aldrich, 50 Phillipe Cote Street, Representative--Senator Smith.
Manchester, NH 03101, 603-634-5000.
James B. Somerville, PO Box 70, Center Conway Town Manager, Chairman,
Conway, NH 03813, 603-447-3811. Mt. Cranmore Task Force.
William D. Paine, Esq., PO Box 40, Judge/Attorney.
Intervale, NH 03845, 603-345-5562.
William Cuccio, PO Box 372, North Restaurant Owner/Selectman.
Conway, NH 03860, 603-356-6041/5578.
[[Page 56026]]
Dewey Mark, Red Parka Pub, PO Box 173, Restaurant Owner, President of
Glen, NH 03838, 603-383-4344. Mt. Washington Valley Chamber
of Commerce.
John A. Cuddy, PO Box 235B, North Banker, Mt. Cranmore Ski
Conway, NH 03860, 603-447-3700. Instructor 17 years.
Tyler Palmer, Palmer Insurance, PO Box Insurance Agency Owner, Former
400, Intervale, NH 03845, 603-356-6926. Olympic Skier.
Arnold Blethen, PO Box 142, North Retired Business Owner/Mt.
Conway, NH 03860. Cranmore Ambassador.
David Urey, PO Box 337, Conway, NH Retired Corporate Lawyer.
03818, 603-447-6331.
Judy McGinty, PO Box 339, Intervale, NH New Hampshire Electric Coop.,
03845, 603-356-5762. Public Relations.
Gene Chandler, Rte. 302, Bartlett, NH NH State Representative,
03812, 603-356-2950. Bartlett Selectman, Real
Estate Sales.
------------------------------------------------------------------------
Opening Statement
1. This report concentrates on Mt. Cranmore with a position from
the outset that it should not be included for divestiture as a
condition of merger. Using the Department of Justice's (DOJ) documents
of decision as a base reference, the report is specific in addressing
what the Task Force considers to be ``flawed'' conclusions/
philosophies/assumptions and facts.
In each area of concentration, based on collected and researched
data, new facts, and professional opinion, the report substantiates why
the DOJ's premises are flawed and, in so doing, new conclusions and
opinions are drawn. The report does not attempt to definitively look at
every minute detail or issue.
Primary subject areas are fully covered as follows:
MARKET
COMPETITION/PRICING
MONOPOLY
ADVERSE ECONOMIC IMPACT
INFRASTRUCTURE/SKI INDUSTRY SURVIVAL
``HHI''
2. Because of developments as of August 31 with the announcement by
American Ski Co. of a potential buyer, a more universal comment section
which zeros in on the principal of DOJ's involvement in a leisure
industry which markets to the consumer's discretionary available dollar
has been added to this report, entitled ``Have They Gone Out-Of-
Bounds?''
3. All statistics and professional opinions are verifiable and
contained in the referenced resource documents or through contacting
the professional references used in preparing this report.
Overview of Dept. of Justice Positions
1. Selling of Mount Cranmore will preserve competition, the merger
will lessen competition substantially.
2. American Skiing Co. would have control of eight of the largest
ski resorts in eastern New England.
3. Merger would raise prices.
4. Merger would eliminate discounts to Maine residents for day
skiing trips and to residents of Maine, eastern Massachusetts, eastern
Connecticut and Rhode Island for weekend excursions.
5. About $400 million was spent last year on skiing in New England.
6. Weekend and day ski market is Maine, eastern Massachusetts and
Connecticut, and Rhode Island.
7. Eastern New England and Maine constitute a relevant geographic
market.
8. Provision of Skiing comprises all services related to providing
access to downhill and snowboarding, including ancillary services such
as food service, entertainment, and lodging.
9. Most skiers travel some distance to ski.
10. Pricing, discounts, ski packages vary and can be market
targeted.
11. Downhill skiing differs from other winter recreational
activities.
12. A small increase in prices for skiing would not cause a
significant number of downhill skiers to substitute other winter
recreational activities for skiing.
13. Skiers are not willing to travel an unlimited distance to ski.
14. ASC and S-K-I compete and both provide skiing to eastern New
England weekend skiers at each of their ski resorts.
15. There are a limited number of resorts with adequate services in
Maine, New Hampshire and Vermont for weekend skiers.
16. Smaller ski resorts located farther away cannot and, after
transaction, would not constrain prices charged to weekend skiers
living in eastern New England.
17. Skiing at smaller or more distant resorts is not a practical or
economic alternative for most eastern New England weekend skiers most
of the time.
18. ASC and S-K-I control the only resorts Maine residents can go
to for day skiing trips.
19. Mt. Cranmore can charge prices to Maine day skiers different
from prices they charge to other skiers.
20. Competition between ASC and S-K-I providing skiing to eastern
New England weekend skiers would be eliminated.
21. Discounting to eastern New England skiers by ASC and S-K-I
resorts would likely be reduced or eliminated.
22. Prices for skiing to eastern New England weekend skiers would
be likely to increase.
23. Competition, generally, in providing skiing to Maine day skiers
would be lessened substantially.
24. Actual competition between ASC and S-K-I in providing skiing to
Maine day skiers would be eliminated.
25. Discounting to Maine day skiers by ASC and S-K-I resorts would
likely be reduced or eliminated.
26. Prices for skiing to Maine day skiers would be likely to
increase.
27. The merger would substantially increase concentration in the
eastern New England weekend skier market and Maine day skier market
using the ``HHI'' as a measure of market concentration.
28. Post merger would increase the ``HHI'' to 2100 with a change of
900 pts. for eastern New England with a 43% market share. It would be
2900--up 1200 for Maine and eastern New Hampshire, with a 50% market
share.
29. Successful entry or expansion in skiing business would be
difficult, time consuming, costly and extremely unlikely, and not
sufficient to prevent any harm to competition.
30. The post merger, after divestitures, would show an ``HHI'' of
under 1800 and a market share less than 40% in eastern New England. For
Maine day skiers the ``HHI'' would be over 1900 and a market share of
less than 35.
Task Force Rebuttal
Market
Analysis of the relevant MARKET is imperative to the credibility of
DOJ's findings. We strongly feel and are convinced that what DOJ has
determined to be the relevant MARKET is seriously flawed. There are
three (3)
[[Page 56027]]
markets which affect Mount Washington Valley and the subject Mountain
of Cranmore.
The first is an ever growing global market. Since DOJ's judgment
places a strong emphasis on day trippers and weekend skiers, one only
needs to be aware that it exists and that it will cause a future
decline in the percent of day and weekend skiers as that number is
relatively stagnant, yet the total numbers will grow as successful
global marketing takes hold in New England.
The second market has unjustly been narrowed to Maine and eastern
New England (actually north eastern New England). The number of skiers
visiting NH from Rhode Island at 4.3% exceeds Maine's 3%, and
Connecticut at 2.8% isn't far behind. New England represents 82.8% plus
whatever visits occur from Vermont and even New York read in at 2.2%.
Mt. Washington Valley is definitely a New England market destination
and should be openly accepted as such by DOJ. The number for the HHI
should accordingly be reworked and we challenge the DOJ to seek a
second outside opinion and study to verify or refute the HHI. This will
be discussed in more detail later in the report.
The third market is the COMPETITIVE MARKET PLACE once the skier
arrives in Mt. Washington Valley. Within an hour and fifteen minutes
there are no less than fourteen (14) ski areas to meet the desires and
needs of every individual, family, skill level, diversity, weather
condition and consumer cost level. DOJ has made no recognition or
mention of this unique market place whose intensity probably cannot be
found anywhere else in the world. A day skier traveling from New
England's four (4) hour drive from market can, and does go to any one
of the ski areas, and the weekend or five day and longer skier will set
down in the Valley or another resort area with accommodations and
likely consider skiing more than one area during the visit. With this
type of market place, it is difficult to conceive how the DOJ cannot
understand and believe in the free enterprise system, the supply and
demand market place, the discretionary recreational dollar and that
competitive pricing and consumer services will be self monitoring.
Monopoly
There simply is no likelihood of monopoly. Leaving Mt. Cranmore in
the merged entity will have no significant impact on concepts of
monopoly. Mt. Cranmore represents only 3.7% of the merged entity skier
day volume (1996 data) and is by far the smallest entity. With
divestiture of Waterville, Mt. Cranmore is still only 4% of the merged
entity volume. Combining the skier visit volumes of Attitash/Bear Peak
and Mt. Cranmore, the volume is till only 10.5% of the merged entity
(without Waterville). They further represent a combined penetration of
only 14% of the New Hampshire skier visit volume. Figures have not been
obtainable to date which would show the percentage ratio of Sunday
River, Attitash and Mt. Cranmore to the 14 ski areas in the skier
destination market place which are:
Cranmore.................................. Sunday River
Attitash.................................. Balsams
Loon...................................... Shawnee
Waterville................................ King Pine
Cannon.................................... Gunstock
Black..................................... Mt. Abram
Wildcat................................... Bretton Woods
Common sense says that the numbers would be favorable and not
reflective of a monopoly positioning.
The Task Force feels it is important that the DOJ consider
Attitash/Bear Peak and Mt. Cranmore as a marriage and as one in the
market place. (See Appendix E) The DOJ should carefully weigh the
efficiencies and costs of operations that the prior merger created in
order to be competitive, creative and sustainable. The two areas offer
all the positive incentives for operational cost effective
efficiencies. The proposed order would undo the efficiencies already
achieved by the operational combination of Attitash/Bear Peak/Cranmore.
The two mountains are within 10 miles of each other, they offer a wide
diversity of skier skills, snow making, length of season, on site non
ski recreational and entertainment facilities, share the same off slope
amenities, and are closely connected by rail train (snow skier, tourist
run scheduling are being negotiated and highly probable). They are not
in competition with each other and the demographics make them a perfect
marriage. The efficiencies are self evident . . . marketing, staff,
planned diversity, economy of scale in such areas as electric rates,
equipment purchases, food purchases, etc. An example of the effect and
advantage of combined marketing is provided in Appendix E. The
brochures also highlight the Task Force's position that the two areas
are a natural marriage.
The inclusion of Mt. Cranmore in the merged entity is clearly not
the development of a monopoly. It is, instead, an example of
leadership, running a business with an innovative management style and
in a manner which will enhance the community, the sport, and the
current and future success and sustainability of Mt. Cranmore. There is
no other marriage that can come close and offer as much value. The need
is there, and the ``at risk'' financial history of Mt. Cranmore speaks
for itself. Based on Cranmore's pre LBO history over the past 10+ years
of being unable to pay its operating bills, foreclosure, lack of
credible buyers, etc., it may well qualify as a ``failing firm'' under
DOJ's Horizontal Merger Guidelines.
Competitive Pricing
The DOJ placed a lot of emphasis on pricing with a weighted concern
to the Maine day skier and eastern New England weekender. Packages of
lodging, food and skiing, discounts, season tickets, smart cards, etc.
are a way of life, part of marketing, supply and demand, and the free
enterprise system. However, several issues need to be made very clear
as the entire DOJ discussion reflects a possible lack of understanding
of the ski industry.
1. The sport of skiing is discretionary, absorbing available
discretionary dollars from persons earning an income where such dollars
exist. In the 1995-96 season 37% of New Hampshire skiers had a
principal income of $75,000 and 31% $50,000 to $75,000. That means 68%
of those skiing in New Hampshire had a principal income of over
$50,000. In 1994-95 37.3% had a household income in excess of $75,000.
2. Because there are 14 ski areas within the immediate area, if any
one or two or even five areas raised their prices too high, the
existing competitive market would seriously erode their consumer base.
3. Within the Valley's market area prices vary significantly, but
they also undoubtedly reflect conditions, skill levels, and
infrastructure aspects from which people in our society freely select.
Skiers, as in the case of most consumers, are very dollar/value
oriented.
4. No one on the Task Force is aware of any ski area which markets
to the day skiers with different rates dependent on the State in which
they reside.
5. The day skier to Mt. Cranmore, for example, who is normally a
frequent skier, has the option of a seasonal ticket. If they work for a
company in the Valley that is a member of the Chamber of Commerce (many
do from the Fryeburg, Maine area) they can purchase a discounted
employee ticket.
6. Because a combined Attitash/Bear Peak/Cranmore has and will
continue to cause cost effective operational efficiencies, it is more
probable that pricing will go down--not up--subject to labor and other
indexes or inflation. This will make enhanced qualitative
[[Page 56028]]
skiing more affordable to those with less discretionary dollars. The
combined efficiencies of Attitash/Bear Peak/Cranmore make these savings
and lower relative pricing a reality as evidenced at Attitash/Bear
Peak/Cranmore. The result satisfies the primary purpose stated in the
Horizontal Merger Guidelines which is ``the primary benefit. * * *
lower prices to consumers.''
7. Ski areas outside the merger will enjoy the benefits of the more
global marketing of the merged entity. Because the area can absorb and
entertain all levels, they will get a significant consumer spin off.
One must understand skiers are not going to visit and ski just one
mountain. The draw and excitement is to try others. Therefore, the more
people that come to the Valley, the more skiers all areas have, pricing
stays competitive and the remaining independent resorts have improved
opportunity to self sustain. Without Mt. Cranmore in the merger family,
fewer global marketing dollars will flow out to benefit the valley and
ski market area. It will be more selfishly oriented, the other ski
areas will not be the benefactors, fourteen (14) ski areas will decline
and Attitash, along with Sunday River, will be the big winners with a
greater share of the skier visit volume than if Mt. Cranmore remained
in the merged entity.
The Task Force unquestionably feels the DOJ's pricing theory and
approach are seriously flawed and are not a justifiable concern.
Maine Day/Eastern New England Weekend Skiers
(DOJ has not delineated geographical boundaries.)
The issue has already been partially discussed, however, facts and
figures require a close look.
1. In 1995-96 New Hampshire had 2,321,158 skier visits.
2. Of those visits only 4% (92,846) were from Maine. The data
available does not reflect how many of those skiers were day visits,
and it is not reliable to assume that the mass majority were. For
example, from December 1995 through April 15, 1996, the Mt. Washington
Valley Chamber of Commerce reported that 5.6% of lodging reservations
they made were from Maine, and that 5.7% of all inquiries were also
from Maine.
3. Available 1996 data further shows that Mt. Cranmore had 125,000
skier visits of which 6,500 (5.2%) were from Maine and Attitash had
201,000 skier visits of which 4,422 (2.2%) were from Maine.
4. This means that 93% of the 92,000 Maine skiers of
all categories did not ski Mt. Cranmore and 88.2% did not ski either
Attitash or Mt. Cranmore.
5. By DOJ's own admission, Waterville Valley would see an
insignificant number of Maine day skier visits.
6. The above, beyond a reasonable doubt, refutes the DOJ's theory
and assumptions that the merger would monopolize and cause prices to
increase for the Maine day skiers. 88.2% of the Maine skiers that come
to New Hampshire ski at other locations which are not part of the
merger makeup. No doubt most of them ski at one of the other eight ski
areas in NH located in the Mt. Washington Valley's market area.
Further, the monopoly and price issue at the Maine locations is moot as
the DOJ's findings reveal that the Maine's Attorney General negotiated
a pricing discount program for Maine residents which the DOJ is
apparently satisfied with. In the reverse, NH skiers going to Maine are
not concerned about price discounts as they are more apt to ski for the
experience. Also they recognize the cost relationship of qualitative
infrastructure, services and product. NH's local market with its many
ski areas and free enterprise competitive market place, offers
significant alternative pricing opportunities for those who desire it.
The state of Maine, by trying to discriminate, will be the loser as NH
residents will stay home. Remember that others will have to pay more to
offset discount tickets, especially if the prices are below the cost of
doing business.
According to the statistics compiled by the Institute for NH
Studies for the 1994-95 season, only 3% of NH's skiers were from Maine
for the entire season. Of those skiers surveyed, 68% were on a ``multi-
day trip,'' thus less than 1.5% of NH's skiers were on a ``day trip''
from Maine. This is even smaller than the 2.5% of NH skiers from
Florida, all of whom would have to have been on a multi-day trip. The
segment of the population which the DOJ purports to protect by the
proposed divestiture of Cranmore is nearly deminimus, and is a smaller
segment of the market than even the skiers from Florida. This indicates
to the Task Force Committee that the DOJ has chosen an inappropriate
``relevant market'' on which to base its order of divestiture.
7. Eastern New England Weekenders: With Maine out of the picture,
even though we do not agree with the DOJ's definition of market area,
the skier who comes to NH is narrowed down to eastern Massachusetts and
Rhode Island.
While statistics are confusing with so many variables, it is
difficult to create any meaningful data. What is known is:
An average travel group is 5.06.
Approximately 26% own property in the Valley.
Cranmore had 65% of its skiers from Massachusetts (not
known how many are eastern Mass).
78.2% stayed one night or more each visit--how many visits
unknown.
Available identified data on Rhode Island skiers is
limited.
Due to the density of population in Eastern Mass. and the financial
affluency of the market area, it is difficult to envision the DOJ's
concern. There are so many choices from great day skiing at Nashoba,
Wachusett and Temple to weekend alternatives from the Berkshires and
throughout northern New England. Many of the 2nd homeowners in the
Valley take advantage of seasonal tickets or enjoy the flexibility of a
14 ski area market for their growing families. Throughout the ski
season they are prone to try many of the different areas. If they, as
consumers, were surveyed or interviewed the DOJ would know how thrilled
they are with the merger, and the confidence they have that it is in
the public's best interest. There is little to no concern with the
weekender market about monopoly and prices.
Economic Impact
The DOJ's decision to require divestiture of Mt. Cranmore has
caused an alarm of concern to go off throughout the valley. Mt.
Cranmore has struggled too long and the Task Force does not believe it
can survive as a status quo stand alone operation. Economists we have
communicated with concur. We finally got the wheel fixed, why try to
tell us it has to be broken again?
The required action will have an immediate adverse economic impact
in Conway. Concerns are already being seen with properties adjacent to
Cranmore and confidence levels are depleting within the business
community.
1996 saw $80 per skier visit spent in New Hampshire which equates
to $10,000,000 being spent at Mt. Cranmore, plus an additional $110 or
$13,750,000 of secondary sales. Since Mt. Cranmore is not a self
contained resort, the actual secondary sales could be higher in Conway
and Mt. Washington Valley.
Mt. Cranmore is the center of Conway's economy. The mountain is
rapidly moving into year round recreate and entertainment which will
increase the economic stature, need and value in the Valley. As a major
destination resort
[[Page 56029]]
the well being of Mt. Cranmore is essential to our resort/tourism
economy.
The DOJ, prior to its decision, did not evaluate adverse economic
impact to Conway and the Valley. Placing it on the block and taking it
away from its positive management/ownership and direction puts the
mountain in jeopardy. Should history repeat itself, and the DOJ cannot
guarantee the end result of its decision, it would cause chaos and a
devastating economic blow which would seriously cause loss of jobs,
closure of businesses and negatively affect the Valley's reputation as
a quality family resort. Not enough can be said as to the importance of
Mt. Cranmore. The potential harm if DOJ is wrong, which we believe they
are, far outweighs the issues of monopoly and pricing. You are talking
about livelihoods, jobs, families, business investments, not $2-$4 on a
ski ticket. You are talking about the necessities of life not the
expenditure of discretionary income.
The struggles of Mount Cranmore to survive over the years have
slowly caused the ski area to be what it is today. Through time, the
separate entities of the ski area and tennis/recreation club merged
together and the ski development easement rights were created, and a
hotel site was approved. Regardless of the owner, these segments need
to remain bound together as the Mount Cranmore Recreation area. To
segregate them now or in the future endangers the probable well being
of the area and certainly its future expansion opportunities. The DOJ
expressed during its visit and meeting with the local Task Force that
it appeared the decision documents should have been more specific as
concerns what would be divested at Cranmore and that it should all stay
intact.
Overview of Ski Industry Survival
A. Infrastructure: The 1994/95 Kottke National End of Season Survey
and the National Ski Areas Association and Ski Industries of America
professional viewpoints strongly reflect that the industry is going
through a major change in order to survive. With a stagnant U.S. skier
consumer group, the only national upswing has been the market
development of snowboarding.
The costs to operate and maintain the state-of-the-art
infrastructure are increasing at a rate that far exceeds the ability
for the U.S. skier population to afford to sustain and are grossly
disproportionate. One result has been that over the past ten years ski
resorts have declined from 750 to 52 (30%)--ALMOST COMPARABLE TO THE
BANKING INDUSTRY.
To survive--ski resorts--are becoming a leading force in efficiency
of operations, cost effective management and creative operations. To do
this, mergers and special unique marketing and partnership deals have
rapidly become a way of life. Operating ski resorts acting alone
without sufficient leveraged capital are not surviving, and will not if
the DOJ is to position itself to disallow cost effective efficient
operational mergers. As clearly pointed out in the National Ski Areas
Association's letter to the DOJ, Mr. Otten has risen as an exemplary
leader in the industry from which all who want to survive are looking
to his methodology and example. The DOJ's decision on the subject
merger, if not modified, will be self destructive and lead toward the
potential decline and demise of a national industry which is extremely
important to the national resort and tourism economy. It is difficult
enough to have positive economic development. The industry certainly
does not need the DOJ's help in motivating failure.
Mt. Cranmore, as a stand alone ski area, does not have the skier
capacity to generate the revenues to maintain and enhance its
infrastructure, provide a qualitative experience, and market its
existence. Because of American Ski Co. holdings and capital leverage
abilities, the operational and infrastructure efficiencies took hold
immediately and, to a degree never before experienced at Mt. Cranmore,
such as pass through snowmaking equipment from Sunday River (light
years ahead of what Cranmore had), new detachable high speed quad lifts
affordable due to multiple site purchase needs, cost effective joint
location marketing, and the story goes on. This simply expands the area
of market draw, brings people for weekday skiing, pays overhead during
the week so they don't have to raise prices for day and weekend skiers.
Mt. Cranmore, after many years, literally leaped into the modern world.
The DOJ's decision will stagnate the ski area and it will rapidly
recede behind the times as a stand alone ski mountain and will not
survive in the future market. Reference is once again made to the
Horizontal Merger Guidelines of the DOJ.
B. Global Market: The need to develop a global market has been
touched upon throughout this report. One reason so many ski areas have
failed in the northeast has been an attitudinal problem that we do not
offer comparable quality and that we are DRIVE-TO resort destinations.
The ability to make ample snow, hold it on the slopes, properly groom
the snow, extend the season, are examples of change and quality. The
new challenge is to attract the more distant traveler to try the
experience and reach out into a market place which is foreign to New
England ski areas. To keep user costs down and maintain an affordable
sport, an expanded market is required both to those in the U.S. in warm
weather geographic regions and international markets. Foreign tourists
are the only import trade which is actually on the export side of the
trade deficit as they spend their money here. Mergers free up dollars
for global marketing which help many enjoy increased skier use they
would not ordinarily have.
C. Mergers: In the ski industry mergers are the current and future
wave. If they are disallowed, the industry will continue its decline.
The concerns of monopoly and pricing fly in the face of reality in a
recreational, non necessity, discretionary industry. The DOJ should not
jump to anti-trust assumptions. The Task Force is confident that by
letting Mt. Cranmore remain with the merged entity, the assumptions
made by DOJ will prove to be wrong. Instead, the DOJ should put TRUST
in the American Way. Whether right or wrong, Mt. Cranmore is so small
in the big picture that little harm will come of it and the DOJ will
have a documented experience to base future decisions on.
Mt. Washington Valley--It is More Than Skiing
The area is as close as a resort destination can be to being year
round. Surveys show an extremely high level of use (and growing) at
both Attitash and Cranmore. The mountains themselves are used for year
round recreation (biking, hiking, sledding, horseback riding, water
slide, dining, bird watching, foliage looking, X country skiing, snow
shoeing, snowmobiling, tennis, swimming, etc.). In addition, they are a
part of the whole which makes Mt. Cranmore and Mt. Washington Valley a
major New England destination family resort. If Mt. Cranmore is not
part of the merged entity, it will have a major negative impact on the
whole with its inability to maintain what it now offers and to grow
into the future as it responds to society's changes and demands.
Herfindahl Hirschman Index (HHI)
New Hampshire as a state and Mt. Cranmore as part of Mt. Washington
Valley, is the core in the New England market place. Sixty percent of
all NH vacationers and tourists come to the White Mountains. It is
estimated that over 8,000,000 come to or through Conway, NH. Based on
previous market
[[Page 56030]]
discussions, the DOJ's HHI is probably seriously flawed. It is unknown
which ski areas were used for the Index. However, it is obvious from
the data we have that all of the 14 ski areas identified should be
used. In addition the following should be used as a minimum: Ragged,
Temple, Whaleback, Sunapee, Saddleback in ME; all but Burke and Jay
Peak in VT, Wachusett, Blue Hills and Nashoba Valley in MA, with
possible consideration of the Berkshire ski areas as they are eastern
New England weekend accessible. If DOJ is determined to hold to its
vision of what Cranmore's market is, then they must also acknowledge
that the skiers from that same market place don't just come to Mt.
Washington Valley.
It is the opinion of the Task Force that the DOJ's methodology in
calculating the HHI is significantly flawed if the true market has not
been recognized and all ski areas were not used in making the
calculations. Day skiers in eastern Massachusetts can just as easily
frequent Nashoba, Wachusett and Temple, for example. Weekenders can
seek diversity and just as readily go to the Berkshires. The Task Force
recommends Prof. Bill Fischel, Economist, Dartmouth College, NH, who is
well versed in New England economy and the ski industry, be used as a
source by the DOJ for recalculating and developing the ``HHI'' to a
properly identified market area with specific concentration in relation
to Mt. Cranmore.
Recapitulation of Economists Input
1. The impact on New Hampshire's skiers was not addressed by DOJ.
Was the justification based at all on real skier data? What is the
number of Maine skiers that skied in NH versus the total number of
Maine skiers? What were the NH ski areas that were visited?
2. The government has not demonstrated that higher prices will
occur or that higher prices will be unacceptable to the skiing public.
What is the price elasticity of lift prices? At what price will skiers
choose another ski area? ASC & S-K-I will not control the whole market.
Higher prices are justified and acceptable to skiers when there is an
increase in the level of services, improvement/expansion of the ski
area or added amenities. Such improvements were being pursued at
Cranmore.
3. Skiers do not make their decision on where to ski based on lift
ticket price alone. Arguably, ski conditions at an area is the primary
decision factor. Other factors are ski area terrain, exposure to
weather conditions, lift facilities, lift lines, and proximity to the
skier. Ski area amenities such as food, lodging, shopping, etc., are
some additional factors.
4. As part of a Mt. Washington Valley resort complex, Cranmore
helps bring in tourists to the area.
5. The economies of scale that ASC/S-K-I merger brings, access to
capital and marketing synergy would benefit Cranmore, Cranmore will
find it much more difficult to ``compete'' as a stand alone ski area.
6. DOJ is not correct when it states that expansion of an existing
area by other parties is difficult to undertake and is not an option as
a response to the merger.
7. DOJ states that ASC and S-K-I together had 43% of the skier days
in northern New England. Correct current data shows that it was
actually 37% at all ski areas in the three states. Concentration
without divestiture would result with Maine at 47%, Vermont at 39%, and
New Hampshire at 25%.
8. Day trip skiers (on average) have lower average skill levels and
are more likely to ski at smaller (non resort) areas. These smaller
areas do not appear to have been included in DOJ's ``HHI''
calculations. It is not clear what ski areas in NH were used when the
index for Maine day skiers was calculated.
9. The DOJ assumes that Cranmore will be attractive to another
buyer at a fair market price. Ski areas of Mt. Cranmore's size have a
mixed record of viability as stand-alone areas. Successful marketing of
the ski area to day trippers is imperative if this area is to survive.
It would not be in the interest of the operator to raise prices to the
level that it would not attract a significant volume of day trip
skiers. There are many other ski areas competing with Mt. Cranmore for
this day trip skier market.
10. The nature of the skier market nationally and internationally
is changing. Ski areas in the region are increasingly attracting skiers
from the middle Atlantic states, eastern Canada, western Europe,
Florida and even Latin America. Only large marketing organizations can
compete with Rocky Mountain, Canadian and European ski areas to attract
skiers from these markets. The growth of the industry in New England
can occur only by attracting new skiers from outside the region. The
larger ski areas and organizations are a form of economic development
as they bring additional tourists into the region which would not
otherwise take place.
11. The list of ski areas used in measuring the HHI should be the
subject of further research. Massachusetts ski areas should be included
in the analysis of serving day trip skiers (and weekenders) in southern
New England, called eastern New England in the court filing. The
viability of small ski areas which do not have a nearby, related larger
area in today's economy is not evaluated by the DOJ. The economic
development component of the ability of a larger organization to
attract skiers from new, more distant markets is not considered at all
by the DOJ.
The Maine Comparison
The enclosed reference document, entitled ``Research Memorandum--
Profile of Visitors to Maine's Ski Resorts, Winter Ski Season 1994-
95,'' is worthy of the DOJ's review.
In all probability, the habits of skiers should be fairly
consistent regardless of the state they visit to ski. The greatest
differences between the skiers visiting New Hampshire versus Maine,
appear to be in dollars spent per ski visit and size of travel group.
This can be readily understood as the Maine report reflects that they
come to ski, while they seek a more broad based winter vacation
experience when they visit the likes of Mount Washington Valley.
Visitors simply do more crossover activities such as cross country
skiing, shopping, and dining, and the ski areas are more community
resort oriented.
The most significant aspect of the study is the confirmation that
the market is New England and not the Main day skier/eastern New
England weekender. This is documented by both the NH and Maine data
showing where the skiers come from, and providing interesting
statistics on where else those same skiers ski throughout the winter
season.
Skier visitors to Main ski often. 16.6 times in Maine, 6.7 times in
New Hampshire, 4.9 times in Vermont, and 8.4 times elsewhere. They are
very diverse and mobile. If similar data was collected on skier
visitors to New Hampshire, comparable figures would no doubt hold true.
29% (93-94) of visitors to Maine also skied in NH, and 21%
in VT.
78% of Maine's market is New England based.
5% of Maine's skier visitors come from NH versus 3% of New
Hampshire's skier visitors coming from Maine.
Conclusion/Recommendation
The Task Force, representing Mt. Washington Valley, concludes that
the Department of Justice has erred in its decision. Replacing dated
data, assumptions, and ski industry conceptions with current data,
reality, facts of life and a more informed
[[Page 56031]]
understanding of the ski industry should allow the Department of
Justice to modify, with clear conscience, its order. This report
provides the DOJ with concise, factual information which, if known or
available to DOJ during its evaluation and decision making process,
would have naturally led to a different order.
Mt. Cranmore, irrefutably, should remain in the merged entity.
There is absolutely no reason, logic, statistical data, economic
philosophy, formula of monopoly, or price control methodology that
supports the divestiture of Mt. Cranmore. To the contrary, what truly
serves the public's best interest and assures the success, viability
and future sustainability of Mt. Cranmore, and the entire well being of
the area's economy, is to modify your order and allow Mt. Cranmore to
stay under the ownership and management of American Skiing Co.
Have They (DOJ) Gone Out of Bounds?
Is the American public wrong? The Task Force has not found an iota
of public opinion which supports DOJ's decision. Whether lay persons,
consumers, ski resort operators, or professionals and associations why
live by the existence, success of the industry, it is evident the DOJ
is not welcome in the leisure industry. No one can understand why the
DOJ feels it is within the DOJ's purview to interfere in a market place
which attracts the consumer with available discretionary dollars.
The skier market, for example, is going through major ``survival''
transition as has been strongly touched upon in this report, and it is
the unanimous feeling of the Task Force that the DOJ is dead wrong in
considering that the ski resort market place is a self-contained market
place. The DOJ is acting like a trotter race horse wearing blinders--
they see the finish line, but move in a disciplined manner with no
peripheral vision--they simply don't see the whole field, the big
picture. The ski industry is not in competition with itself--through
mergers, it is learning to survive against a much bigger market place
commonly known as the Leisure & Sports Industry. The DOJ cannot close
its eyes to gambling resorts, the Disney Worlds, the massive growth of
cruise ships, the ever growing smaller world and access to warm weather
resorts, adventure/experience trips, shopping (the #1 leisure activity
in America), theater trips, arts-music, or simply paying equal to lift
ticket ski prices to go to an L.A. Lakers basketball game in the
upcoming season because they paid equal to the subject merger for one
player's salary and percs.
Because of the general economic condition of the ski industry, the
DOT must carefully reinvestigate its Horizontal Merger Guidelines and,
with open eyes and minds, recognize that the American Ski Co. decision
has universal impact and could be the first step in devastating an
American pastime, causing an adverse impact on an industry in a manner
opposite from the proposed purpose of its actions.
Should the consent decree not be reversed, the DOJ should seriously
consider a careful review of the anti-trust act in relation to today's
world.
Speaking not only for Conway, Mt. Washington Valley, and the State
of New Hampshire, but also for the entire ski industry and the
discretionary dollar leisure-sports market place, the DOJ has gone out
of bounds!
Research References and New Statistics and Information
1. Committee members
2. Dr. Larry Goss, Economist, Institute for NH Studies
3. National Ski Areas Associates, Colorado
4. Northern Economic Planners--Ski-NH, Inc. Skier Survey 1994-95 Season
5. The NH Ski Industry 1992-93--its contribution to the State's economy
6. Kottke National End-Of-Season Survey 1994-95 and Data from 95/96
Survey
7. American Skiing Company--Confidential--Offering Memorandum
8. Department of Justice from Discussions to releasable information and
base decision documents
9. Ski Area Management Magazine--July 1993 Articles by Jim Spring and
David Rowan
10. Sno engineering: Market Research results for 1995/96 Ski Season
11. Mt. Washington Valley Chamber of Commerce
12. National Skier Opinion Survey--1992-1996--Leisure Trends Group
13. Roland Vononlsen, Economist, NH Electric Cooperative, Inc.
14. Wall Street Journal
15. State of New Hampshire Dept. of Resources & Economic Development
16. Ski Industries of America
17. Davidson-Peterson Associations, Inc., Research Memorandum for Ski
Maine
18. US Department of Justice Horizontal Merger Guidelines
Kottke National End of Season Survey
It is the Task Force's understanding that the DOJ used the 1993/94
Kottke National End of Season Survey as a base professional reference.
We strongly urge the DOJ to carefully review both the 1994/95 and
the ``just off the press'' 1995/96 Kottke final reports prepared
through the National Ski Areas Association.
Significant changes and new areas of data and information have been
integrated into the reports as compared to the 1993/94 version.
Coping with infrastructure demands, capital needs, market trends,
rapid industry movement toward partnerships/mergers to avoid becoming a
historical statistic, and creative management are now all reflected in
the report. DOJ will find the material educational and informational
toward better understanding the ski industry of today. DOJ will find
that the consumer experts are very supportive of Mount Washington
Valley's Task Force position on Mount Cranmore and today's necessity
that Cranmore remain part of the merged entity to serve the public's
and the industry's best interest.
Industry Overview
The U.S. ski market is a fragmented industry, with 516 ski areas in
operation during the 1995-96 season. Over the past 15 years,
participation in the sport of skiing has remained relatively stable,
averaging approximately 50 million skier visits nationally. No single
ski area accounted for more than approximately 3% of 1994-95 skier
visits. The market is characterized by both regional and national
competition.
National Ski Areas Association Regions and Skier Visits
[In thousands]
----------------------------------------------------------------------------------------------------------------
Pacific
Season Northeast Southeast Midwest Rocky mtn West Total
----------------------------------------------------------------------------------------------------------------
1991/92........................... 12,252 4,425 6,535 17,687 9,936 50,835
1992/93........................... 13,217 4,660 6,978 18,602 10,575 54,032
[[Page 56032]]
1993/94........................... 13,718 5,808 7,364 17,503 10,244 54,637
1994/95........................... 11,265 4,746 6,907 18,412 11,346 52,676
1995/96*.......................... 13,830 5,274 7,144 18,007 8,861 53,116
Northeast: CT, MA, ME, NH, NY, VT,
RI
Midwest: IA, IL, IN, MI, MN, MO,
ND, NE, OH, SD, WI
Pacific West: AK, AZ, CA, NV, OR,
WA
Southeast: AL, GA, KY, MD, NC, NJ,
PA, TN, TN, VA, WV
Rocky Mountain: CO, ID, MT, NM,
UT, WY
----------------------------------------------------------------------------------------------------------------
Source: 1994/95 KOTTKE NATIONAL END OF SEASON SURVEY.
* Preliminarily reported by Kottke National End of Season Survey 1995/96.
The ski industry is presently experiencing a period of
consolidation and attrition, which is reflected in a significant
decline in the total number of areas over the last ten years.
Management believes that the driving forces behind both consolidation
and attrition are the need to gain access to capital to maintain state-
of-the-art facilities and the need to retain professional management,
and the inability of numerous resorts to keep pace with the competition
with respect to one or both of these market forces. The trend among
leading resorts is toward investing in improving technology and
infrastructure so as to deliver a more consistent, high quality
product.
The NSAA defines the Northeast ski resort market as encompassing
the New England states and New York, although the Company believes its
market extends as far as the Mid-Atlantic states and southeastern
Canada. The Northeast market has averaged approximately 12 million
annual skier visits over the last fifteen years. Within the Northeast
region, skiers can choose from among over 50 major resorts. The
region's major resorts are concentrated in the mountainous areas of New
England and eastern New York, with the bulk of skiers coming from the
population centers located in eastern Massachusetts, southern New
Hampshire, Connecticut, eastern New York, New Jersey and the
Philadelphia area. Data collected at Sunday River indicate that
approximately 43% of its weekend skiers reside in Massachusetts.
Similar data collected at Killington and Mt. Snow indicate that
approximately 23% and 35% of their weekend skiers, respectively, reside
in New York, with high concentrations from Massachusetts, Connecticut,
New Jersey and Vermont.
The Northeast ski market consists of essentially two segments: day
skiing and vacationers. The day skiing market is comprised of skiers
who live within a four hour driving radius of a particular resort. Day
skiers may stay for one to two days in a single trip. Approximately 35
million people lie within the Company's day skiing market, which
includes the New York and Boston metropolitan areas. The vacation
market is a national market for destination resorts. While the
Northeast does not draw significant numbers of vacationing skiers from
the Western regions of the country, it competes with the Rocky Mountain
and Pacific Northwest areas for Eastern vacationing skiers. Over the
last several years, the Company has begun to compete in certain
international markets, with the U.K. market historically producing the
highest levels of international skier visits.
Management believes that certain demographic trends and trends in
the U.S. ski industry will be favorable for the Company's business
outlook. The ``echo boom'' generation is of prime age for introduction
to skiing and snowboarding. The trend toward consolidation is expected
to permit larger, multiple resort companies to concentrate more of
their marketing efforts on attracting new participants to the sport.
Improved snowmaking technology and grooming techniques assure visitors
better quality and more consistent conditions. High speed chair lifts
also increase the quality of the experience by permitting more skiing
during a resort visit. As an active family sport, skiing benefits from
the special trends toward family vacationing and health consciousness.
Finally, management believes its success with the first Summit Hotel
program is directly related to the desire for affordable vacation
property ownership among a growing population of skiers.
American Skiing Company Resort Overview
--------------------------------------------------------------------------------------------------------------------------------------------------------
1994-95 1995-96
Skiable Vertical Snowmaking skier skier
Resort terrain drop Trails Lifts coverage Groomers Lodges visits visits
(acres) (percent) (000s) (000s)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Killington, Sherburne, Vermont........... 918 3,150 165 1 Gondola...................... 60 29 7 826 905
2 Detachable...................
15 Fixed Grip...................
2 Surface......................
Sunday River, Newry, Maine............... 640 2,300 120 3 Detachable................... 92 11 4 535 589
12 Fixed Grip...................
1 Surface......................
Mount Snow, Haystack, Dover, Vermont..... 751 1,700 130 1 Detachable................... 84 13 6 461 553
20 Fixed Grip...................
3 Surface......................
[[Page 56033]]
Sugarloaf Carrabassett, Valley, Maine.... 515 2,820 116 1 Gondola...................... 92 11 1 312 349
1 Detachable...................
11 Fixed Grip...................
1 Surface......................
Sugarbush, Warren, Vermont............... 413 2,600 111 4 Detachable................... 74 9 5 331 373
4 Surface......................
10 Fixed Grip...................
Attitash, Bear Peak, Bartlett, New 214 1,750 45 1 Detachable................... 100 5 2 182 201
Hampshire. 7 Fixed Grip...................
2 Surface......................
--------------------------------------------------------------------------------------------------------------
Subtotal--Retained resorts............... 3,451 ........ 687 2 Gondola...................... 80 78 25 2,647 2,970
12 Detachable...................
75 Fixed Grip...................
13 Surface......................
Waterville Valley, Waterville Valley, New 255 2,020 54 1 Detachable................... 96 6 3 207 257
Hampshire. 8 Fixed Grip...................
4 Surface......................
Mt. Cranmore, North Conway, New Hampshire 190 1,167 36 1 Detachable................... 100 3 2 95 125
4 Fixed Grip...................
1 Surface......................
--------------------------------------------------------------------------------------------------------------
Subtotal--Resorts to be divested......... 445 ........ 90 2 Detachable................... 98 9 5 302 382
12 Fixed Grip...................
5 Surface......................
==============================================================================================================
....... ........ ....... 2 Gondola...................... .......... ........ ....... ....... .......
....... ........ ....... 14 Detachable................... .......... ........ ....... ....... .......
....... ........ ....... 87 Fixed Grip................... .......... ........ ....... ....... .......
Total.............................. 3,896 ........ 777 18 Surface...................... 82 87 30 2,949 3,352
--------------------------------------------------------------------------------------------------------------------------------------------------------
Strategy
Invest in Ski Experience. Management believes that the most
efficient way to increase resort visitation is to provide the highest
quality skiing available. The Company intends to continuously improve
the infrastructure at each resort, emphasizing modernization and
introducing at the SKI resorts the snowmaking and grooming successfully
implemented at the Company's other ski areas. Management expects to
invest approximately $50 million in improvements in lifts, snowmaking,
grooming and trail design over the next three years, of which
approximately 70% is designated for SKI resorts.
Alpine Experience
The guests at Attitash/Bear Peak and Cranmore are very similar in
relation to alpine experience. At Attitash/Bear Peak 92.5% ski, with
40.1% intermediate, and 6.1% snowboard, with 33.3% advanced. At
Cranmore 94.3% ski, with 41.9% intermediate, and only 5.2% snowboard,
with 40% being intermediate (Refer to Tables 1 (sports) and 3 (ability
level) for comparison).
The average number of guests in a party at Attitash/Bear Peak and
Cranmore is 6 and 5, respectively. Cranmore's lower guest count can be
attributed to the higher percentage of their guests coming with their
family as compared to Attitash/Bear Peak. At Cranmore 37.2% come with
their family as compared to 30.1% at Attitash/Bear Peak. The guests at
both mountains are more likely to come with friends than with family,
groups or alone. A total of 39.0% of Attitash/Bear Peak and 34.0% of
Cranmore guests come with their friends (Refer to Tables 2 (guest's
party) and 4 (party size) for comparison).
More than half of the guests at both mountains are return
customers, with 65% at Attitash/Bear Peak and 61% at Cranmore (Refer to
Table 5 for comparison of return guests). Overall, the guests are using
the traditional lift ticket rather than the smart ticket or season
pass. The traditional lift ticket is being used more at Cranmore
(72.0%) than at Attitash/Bear Peak (64.3%) by the guests. Of the guests
that have been to Attitash/Bear Peak, the traditional lift ticket is
the choice by 62.6% of the guests as compared to only 24.8% choosing
the smart ticket. Of the guests that have never been to Attitash/Bear
Peak, 67.5% use the traditional ticket and 27.8% use the smart ticket.
Cranmore guests, whether return skiers/riders or not, are using the
traditional lift ticket more often than Attitash/Bear Peak guests.
A higher percentage of Cranmore guests decides on which ski area to
visit because of a positive past experience than did the Attitash/Bear
Peak guests, with 44% and 35%, respectively. The second important
reason was the convenience to where the guests lived, which represented
about a quarter of the guests at both mountains (Refer to Table 16).
The average number of times skied/rode last year was about thirteen
times for both Attitash/Bear Peak and Cranmore guests. Attitash/Bear
Peak guests skied/rode at Attitash a total of 280 times, followed by
Sunday River (159 times), Wildcat (109 times), Cranmore (94 times) and
Loon (83 times). On average, the guests skied/rode at Attitash/Bear
Peak 9 times, followed by Maine areas 6 times and Out West 5 times. The
guests at Cranmore skied/rode 86 times at Cranmore and 80 times at
Attitash/Bear Peak. Sunday River was skied/rode 62 times by the guests
and Wildcat 45 times. On average, Cranmore guests skied/rode 8 times in
Maine, 7 times at Cranmore and 6 times Attitash/Bear
[[Page 56034]]
Peak (Refer to Tables 6 (number of visits) and 7 (areas skied last
year) for comparison.
The guests at both mountains have similar music taste. Soft Rock
was the favorite format for guests at Attitash/Bear Peak (48.4%) and
Cranmore (46.3%). This was followed by Hard Rock, which represented
18.0% at Attitash/Bear Peak and 13.2% at Cranmore (Refer to Table 9 for
radio format comparison).
A total of 74.1% of Attitash/Bear Peak guests did not go night
skiing last year and only 12.8% went once. A total of 65.8% of Cranmore
guests did not go night skiing and even fewer, 9.8%, went only once
(Refer to Table 8 for comparison).
The Bear Peak experience for both Attitash/Bear Peak and Cranmore
guests was not satisfying. The guests were only satisfied with the ease
of riding the lift and all other respective categories received
satisfaction ratings less than 8 (Refer to Table 10 for comparison of
Bear Peak experience).
Guest Experience
In comparing the guests' experience at Attitash/Bear Peak with
Cranmore, many similarities occur. However, a number of differences
also appear. The percentage of guests staying overnight is higher at
Attitash/Bear Peak than at Cranmore, 86.1% compared to 78.2%,
respectively (Refer to Table 11). The guests that are staying overnight
are primarily staying at a friend's home/condominium or either at a
home/condominium they rent. A total of 32% of Attitash/Bear Peak guests
stay at a friends and 29% stay in a home/condominium they rent. A total
of 29% of Cranmore guests stay with friends and 27% stay in a home/
condominium they rent (Refer to Table 12 for where visitors are
staying). A higher percentage of Attitash/Bear Peak guests (55%) stay
over for two nights than Cranmore guests (47%) (Refer to Tables 13 for
length of stay and 14 for days skied/rode during trip).
The best way to reach the Attitash/Bear Peak and Cranmore guest is
through direct mail, followed by the radio. A total of 44.5% of the
Attitash/Bear Peak guests and 50.8% of Cranmore guests believed that
direct mail was the best way to reach them. This compares to radio,
which represents 30.9% of Attitash/Bear Peak guests and 25.4% of
Cranmore guests (Refer to Table 15). Ski magazine was the most
frequently read magazines for guests at both mountains, but it was only
rarely read (Refer to Table 17).
Program Participation
A high percentage of Attitash/Bear Peak and Cranmore guests do not
have an Edge Card (68.5% and 69.8%, respectively). In addition, a high
percentage of the guests at both mountains are not familiar with the
Edge Care (Refer to Table 18 and Table 19).
The primary reason why Attitash/Bear Peak and Cranmore guests did
not shop at CriSports was because they did not need anything (Refer to
Tables 20 and 21).
The traditional lift ticket is used more at Cranmore (72.4%) than
at Attitash/Bear Peak (64.3%). As would be expected, the smart ticket
is used more at Attitash/Bear Peak (26.1%) than at Cranmore (19.8%).
Over half (52.6%) of the Attitash/Bear Peak guests and 43.6% of
Cranmore guests selected their ticket because of the better perceived
value (Refer to Tables 22, 23a and 23b for comparison of lift ticket
and explanation for lift ticket).
Only 37.3% and 31.8% of Attitash/Bear Peak and Cranmore guests,
respectively, visit Attitash/Bear Peak during the summer (Refer to
Table 24). Cranmore guests use the Alpine Slide and Water Slide 86% and
80% of the time, respectively. Attitash/Bear Peak guests use the Alpine
Slide and Water Slide only 56% and 45% of the time, respectively (Refer
to Table 25 for a comparison of activities participated in).
A high percentage (85%) of the guests at both mountains have not
taken more than 1 or 2 lessons in the past five years. This might be
attributed to the high percentage of intermediate and advanced skiers/
riders at both mountains. Roughly 40% of the guests at both mountains
would take a lesson if special rates were offered (Refer to Tables 26
and 27 for comparison of lessons and motivations for taking lessons).
Guest Information
The gender distribution at Attitash/Bear Peak is 60.7% male. This
compares to Cranmore, where 53.6% of the guests are males.
Approximately half of the guests at Cranmore are married with children
and 31.9% are single with no children. Of the Cranmore guests that have
children, 47.8% have two children and 33.7% have only one child. A
lower percentage (42.1%) of guests at Attitash/Bear Peak are married
with children than at Cranmore, but a higher percentage (39%) are
single with no children. Of the Attitash/Bear Peak guests that have
children, 53.5% of guests have two children and 24.1% have one child.
The average age for children at both mountains is ten years old. The
average age of guests at Attitash/Bear Peak is 36 years old as compared
to 38 at Cranmore (Refer to Tables 30 and 31 for comparison of
children's age and visitor's age).
The average household income for Cranmore guests is higher than
Attitash/Bear Peak guests. A total of 26.5% of Cranmore guests have an
income of $50,000 to $75,000 as compared to 21.6% of Attitash/Bear Peak
guests. A total of 27.0% of Attitash/Bear Peak guests have an income of
$20,000 to $50,000 as compared to 24.7% of Cranmore guests (Refer to
Table 32 for comparison of household income).
There is a higher percentage of Attitash/Bear Peak guests that own
vacation property than Cranmore guests (30.8% and 25.8%, respectively)
(Refer to Table 33). A total of 31.8% of the Attitash/Bear Peak guests
that own vacation property have a household income of $125,000 and
more. Approximately a third of Cranmore guests have a household income
of $75,000 to $100,000. A higher percentage (56.9%) of Cranmore guests
owns a single family home than Attitash/Bear Peak guests (45%). Thirty-
three percent of Attitash/Bear Peak guests own a condominium compared
to only fifteen percent of Cranmore guests (Refer to Tables 34 for
comparison of type vacation property owned and 35 for where vacation
property is located and 36 represents the interest of obtaining
information pertaining to vacation ownership). Approximately a quarter
of the guests at both mountains are interested in information about
vacation ownership.
Guests that are skiing/riding at Attitash/Bear Peak and Cranmore
are primarily traveling from Massachusetts, with 69% and 65%,
respectively. Cranmore attracts more guests from New Hampshire (16%)
than Attitash/Bear Peak (7%). Also, more guests are going to Cranmore
from Maine (5%) than to Attitash/Bear Peak (2%) (Refer to Table 37 for
comparison of the states where guests are coming from).
Table 38 and Table 39 represent the likelihood of returning and the
potential of recommending the ski area to a friend. Over half of the
guests are likely to return next year and most every guest will
recommend the ski area to a friend.
BILLING CODE 4410-01-M
[[Page 56035]]
[GRAPHIC] [TIFF OMITTED] TN30OC96.000
[[Page 56036]]
[GRAPHIC] [TIFF OMITTED] TN30OC96.001
[[Page 56037]]
[GRAPHIC] [TIFF OMITTED] TN30OC96.002
[[Page 56038]]
[GRAPHIC] [TIFF OMITTED] TN30OC96.003
[[Page 56039]]
[GRAPHIC] [TIFF OMITTED] TN30OC96.004
BILLING CODE 4410-01-C
A total of 71.1% are not interested in learning more about vacation
ownership at Attitash/Bear Peak. Of the percent of guests that do not
want information,
[[Page 56040]]
70.1% currently do not own vacation property (Refer to Crosstab
15:Interested in learning more about vacation ownership and Own
vacation property).
The majority of Cranmore guests are traveling from Massachusetts
followed by New Hampshire (15.6%), Rhode Island (8.3%) and Maine
(5.2%).
Frequency of Where Guests Are Coming From
----------------------------------------------------------------------------------------------------------------
Valid Cum.
Value label Value Frequency Percent percent percent
----------------------------------------------------------------------------------------------------------------
MA....................... 117 60.9 60.9 60.9
NH....................... 30 15.6 15.6 76.6
RI....................... 16 8.3 8.3 84.9
Missing.................. 12 6.3 6.3 91.1
ME....................... 10 5.2 5.2 96.4
CT....................... 2 1.0 1.0 97.4
NJ....................... 2 1.0 1.0 98.4
NY....................... 2 1.0 1.0 99.5
OH....................... 1 .5 .5 100.0
---------------------------------------
Total...................... ......................... 192 100.0 100.0
----------------------------------------------------------------------------------------------------------------
16.7% of the guests come from the Boston area and 12.5% come from
Northern Massachusetts
Frequency of 3-digit Zip Codes of Where Guests Are Coming From
----------------------------------------------------------------------------------------------------------------
Valid Cum.
Value label Value Frequency Percent percent percent
----------------------------------------------------------------------------------------------------------------
Boston Mass...................... 021...................... 32 16.7 16.7 16.7
NE Mass.......................... 019...................... 24 12.5 12.5 29.2
SE N.H........................... 038...................... 19 9.9 9.9 39.1
Missing.................. 13 6.8 6.8 45.8
Providence R.I................... 028...................... 13 6.8 6.8 52.6
SE Mass.......................... 020...................... 9 4.7 4.7 57.3
NE R.I........................... 027...................... 9 4.7 4.7 62.0
NE Mass.......................... 018...................... 8 4.2 4.2 66.1
SE Mass.......................... 023...................... 8 4.2 4.2 70.3
South N.H........................ 030...................... 7 3.6 3.6 74.0
Cape Mass........................ 026...................... 6 3.1 3.1 77.1
Worcester Mass................... 015...................... 5 2.6 2.6 79.7
Central Mass..................... 017...................... 5 2.6 2.6 82.3
South M.E........................ 039...................... 5 2.6 2.6 84.9
040...................... 4 2.1 2.1 87.0
014...................... 3 1.6 1.6 88.5
029...................... 3 1.6 1.6 90.1
010...................... 2 1.0 1.0 91.1
016...................... 2 1.0 1.0 92.2
025...................... 2 1.0 1.0 93.2
031...................... 2 1.0 1.0 94.3
022...................... 1 .5 .5 94.8
032...................... 1 .5 .5 95.3
033...................... 1 .5 .5 95.8
041...................... 1 .5 .5 96.4
064...................... 1 .5 .5 96.9
069...................... 1 .5 .5 97.4
086...................... 1 .5 .5 97.9
088...................... 1 .5 .5 98.4
148...................... 1 .5 .5 99.0
380...................... 1 .5 .5 99.5
451...................... 1 .5 .5 100.0
---------------------------------------
Total...................... ......................... 192 100.0 100.0
----------------------------------------------------------------------------------------------------------------
Refer to Appendix B for the location of Cranmore guests by 3-digit
zip codes.
BILLING CODE 4410-01-M
[[Page 56041]]
[GRAPHIC] [TIFF OMITTED] TN30OC96.005
BILLING CODE 4410-01-C
[[Page 56042]]
The NSAA ECS 1995/96 chart was not able to be reprinted in the
Federal Register, however, it may be inspected in Suite 215, U.S.
Department of Justice, Legal Procedures Unit, 325 7th St., N.W.,
Washington, D.C. at (202) 514-2481 and at the Office of the Clerk of
the United States Court for the District of Columbia.
95-96 Ski Season Study is not complete per Larry Goss. 7/17/96.
Items with an asterisk are from 95-96 study, all other information
is from 94-95 study.
* 2,310,000 Skier Days
State of Origin:
86% residents of New England
55% residents of Massachusetts
21% residents of New Hampshire
4% residents of Rhode Island
3% residents of Maine/Connecticut
* Decision Maker:
1. Male age 35-45
2. Joint decision male/female
3. Female
Principal Income:
37% $75,000 & above
31% $50-75,000
Skill level:
42% considered themselves Intermediate
33% considered themselves Advanced
9% considered themselves Expert
Travel Party Characteristics:
41% Families
40% Families/Friends
Most Popular Activities:
85% Alpine skiing
31% Shopping
* Spending:
Total spending on ski trips to the State, $185,000,000
Key Words Used to Describe New Hampshire Skiing:
1. Beautiful
2. Scenic
3. Friendly
The chart on page 38 of the National Skier Opinion Survey was not
able to be reprinted in the Federal Register, however, it may be
inspected in Suite 215, U.S. Department of Justice, Legal Procedures
Unit, 325 7th St., N.W., Washington, D.C. at (202) 514-2481 and at the
Office of the Clerk of the United States Court for the District of
Columbia.
SKI-NH, Inc., Skier Survey Results, 1994-5 Season
October 1995
The Institute for New Hampshire Studies, Plymouth State College,
Plymouth, NH 03264
Northern Economic Planners, Concord, NH 03301
Introduction
SKI-NH, Inc. retained The Institute for New Hampshire Studies at
Plymouth State College to undertake a study of the impact of the ski
areas in New Hampshire on the state's economy. This economic impact
study included two surveys: a survey of the skiers and a survey of the
ski areas. This report evaluates the compilations of the returned skier
survey forms and is intended to help SKI-NH with its marketing program.
There also will be a separate economic impact report that will make use
of both surveys and additional information.
During the 1994-5 skiing season, seven alpine ski areas agreed to
provide attendance information on a monthly basis. This information is
the basis for the estimate that 72 percent of all skier days during the
1994-5 season occurred between November 1994 and February 1995 and 28
percent were during the months of March and April 1995. When this
monthly attendance data is compared with the compilation of the
returned survey forms, it became obvious that Gunstock Ski Area was
over represented among the returned forms.
The information which follows in this report is based on the
assignment of smaller weights to Gunstock returned forms versus those
for other ski areas and larger weights for the winter season forms
versus the spring season forms. As a result, the information which
follows will be somewhat different from the compilation of all the
returned survey forms which has been provided to SKI-NH.
Plymouth State College provided SKI-NH with 3,000 survey forms to
distribute to skiers by the ski areas during the months of December
through April. There were 461 useable forms returned, for a 15.4
percent return rate. This overall return rate was lower than
anticipated. Almost 40 percent of the returned forms were from skiers
who visited the state during the months of March and April. Over 44
percent of the forms were from skiers who had visited Gunstock, far
higher than that ski area's share of the state's market. The skiers who
visited Gunstock had somewhat different characteristics than those who
skied at areas farther north. The spring season skiers also have
slightly different characteristics than the winter season skiers. It
was for these reasons that the returned forms were weighted, as
outlined above, so that the reported results are more representative of
the skiers who did visit the state's ski areas. Also, the U.S. Travel
Data Center winter 1995 survey of travelers to New Hampshire has been
used to adjust the ratio of day trip to overnight skiers and to
increase average spending per day and per trip in both this report and
in the impact study.
Attendance at Ski Areas
The information provided monthly by the seven ski areas as the
season progressed, plus additional information on the entire season
from other ski areas, currently indicates that there were 1.88 million
alpine and cross-country skier days during the 1994-5 season. This is
about 16 percent below the record setting 1993-4 season which had 2.24
million skier days. Month to month comparisons between these two
seasons show that there was great variation in the rate of decrease
among these months, with the greatest percentage declines for the
months of January and April. Overall, the winter months were down about
14 percent from the previous year, but the spring months (March and
April) were down by 20 percent from the previous year, due to the
relatively warm and rainy spring weather.
The skier survey forms, state traffic count data and rooms and
meals tax information indicate that skiers who own second homes and
condominiums near ski areas had only a very small decline in visits to
ski areas. Other skiers on overnight trips appear to have declined by
about eight percent in number during the winter, with a larger decrease
during the spring. The largest decrease appears to have been for day
trip skiers when the 1993-4 and 1994-5 skiing seasons are compared. The
U.S. Travel Data Center survey of winter 1995 visitors to New Hampshire
indicates a 6.8 percent increase in visitors to New Hampshire during
winter 1995 in comparison with winter 1994, but with a 21 percent
decrease in visitors on one day trips. New Hampshire DOT traffic
counters show a 1.8 percent decrease for the those counters near ski
areas, but a 4.1 percent increase for all counters state-wide.
State of Origin
Skiing in New Hampshire is primarily an activity for residents of
New England. About 86 percent of all skiers are residents of the six
New England states. An additional five percent came from the three Mid-
Atlantic states and three percent came from Canada. Almost six percent
of the ski parties came from the other 41 states and just over one
percent came from outside North America. Canadian skiers are far more
likely to come during the spring than the winter. It was a surprise
that as many Canadians came this year, due to the unfavorable currency
exchange rate. The second surprise was the relatively large number of
ski parties from Florida
[[Page 56043]]
in both the winter and the spring. As in other years, spring skiers are
more likely to be from outside the Northeastern United States than
winter skiers.
Table 1 shows the states and provinces which provide at least one
percent of all skiers visiting New Hampshire. The other states from
which skiers returned forms during the winter months included: Alabama,
Arizona, Maryland, Michigan, Ohio, Pennsylvania and Virginia. The other
states from which skiers returned forms during the spring months were:
Michigan, North Carolina, Ohio, Virginia and Vermont. Each of these
states had less than one percent each of the returned forms. The U.S.
Travel Data Center survey of winter 1995 visitors to New Hampshire
found 82 percent were from New England and 11 percent from the three
Middle Atlantic States. Canadians and other foreigners were not
surveyed.
Table 1.--Percent of Skiers by State of Origin
----------------------------------------------------------------------------------------------------------------
Winter months Spring months Entire season
State/province (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Connecticut..................................................... 3.1 2.2 2.8
Florida......................................................... 2.7 2.1 2.5
Maine........................................................... 3.8 1.0 3.0
Massachusetts................................................... 51.7 63.2 54.9
New Hampshire................................................... 22.2 16.4 20.6
New Jersey...................................................... 1.3 3.1 1.8
New York........................................................ 2.7 1.0 2.2
Rhode Island.................................................... 5.4 1.4 4.3
Nova Scotia..................................................... 0.4 2.1 0.9
Ontario......................................................... 0.5 5.2 1.8
Other states.................................................... 4.6 2.3 4.0
Outside N Am.................................................... 1.6 0.0 1.2
-----------------------------------------------
Total..................................................... 100.0 100.0 100.0
----------------------------------------------------------------------------------------------------------------
The Trip Decision-Maker
The decision-maker for the skiing trip was most often male and
between the ages of 35 and 45. Table 2 shows the age break-out for the
trip decision-maker and Table 3 shows the sex of the decision-maker.
Table 4 shows the household income of the trip decision-maker. The trip
decision-maker during the winter months was slightly younger in average
age, in comparison with the spring months' decision-maker. This may
reflect the fact that younger skiers appear to be more likely to take
day trips at the more southerly ski areas, which are not open as long
during the spring months as the more northerly ski areas. A joint
decision regarding the ski trip appears to be more common for the
spring months than for the winter months, but mostly due to a reduction
in the proportion of females who make the trip decision in the spring.
Table 2.--Age of Trip Decision-Maker
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Age group (percent (percent) (percent)
----------------------------------------------------------------------------------------------------------------
18-24........................................................... 7.5 6.5 7.2
25-34........................................................... 14.5 17.5 15.3
35-44........................................................... 43.3 43.5 43.4
45-54........................................................... 27.1 23.6 26.1
55-64........................................................... 5.7 5.7 5.7
65+............................................................. 1.9 3.2 2.3
----------------------------------------------------------------------------------------------------------------
Table 3.--Sex of Trip Decision-Maker
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Sex (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Male............................................................ 40.3 38.7 39.9
Female.......................................................... 28.2 21.4 26.3
Joint........................................................... 31.5 39.9 33.9
----------------------------------------------------------------------------------------------------------------
The share of all skiers in the income groups over $75,000 was
higher for the spring skier than for the winter skier. Household income
for skiers are higher (on-average) than visitors to New Hampshire
during the other seasons of the year and are significantly higher than
the average household income for the state's residents.
Table 4.--Household Income
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Income group (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
<$20,000........................................................ 4.7 2.8 4.2
$20-35,000...................................................... 9.7 9.9 9.8
35-50,000....................................................... 15.9 22.9 17.9
[[Page 56044]]
50-75,000....................................................... 34.0 23.9 30.8
75-100,000...................................................... 16.5 20.1 17.5
100,000+........................................................ 19.2 21.2 19.8
----------------------------------------------------------------------------------------------------------------
The level of capability for skiers appears to be different for the
winter and the spring. The spring months skier is more likely to be an
expert and less likely to be a novice or beginning skier in comparison
with the winter months skier. Table 5 shows the level of capability of
the trip decision-maker.
Table 5.--Skiing Capability Level
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Level (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Novice.......................................................... 19.3 9.2 16.5
Intermediate.................................................... 40.7 44.1 41.6
Advanced........................................................ 33.5 32.4 33.2
Expert.......................................................... 6.5 14.3 8.7
----------------------------------------------------------------------------------------------------------------
The trip decision-maker takes an average of 7.0 skiing trips to New
Hampshire if they returned a survey form during the winter and 7.3
skiing trips to New Hampshire if they returned the form during the
spring. Those skiers who returned the forms indicated that 65 percent
of them plan to visit the state on vacation during the summer and 53
percent of them plan to visit during the fall. These relatively high
percentages may reflect the fact that a significant share of those who
returned the forms have a second home, condominium or time-share unit
or friends or relatives in New Hampshire, as will be discussed later in
this report.
Travel Party Characteristics
Most people usually ski with their family members and/or friends.
Only a small share of skiers in New Hampshire are part of a group party
(such as a ski club), probably about four percent of all skiers. Very
few people are on a skiing trip by themselves--less than two percent.
Table 6 shows the make-up of ski parties based on the returned survey
forms. The average size of the travel party in 1994-5 is 14 percent
larger than was reported in the 1992-3 season survey. As noted above, a
large share of those parties which returned forms were on overnight
trips than is estimated for all ski trips. Overnight ski parties have
larger sized travel parties (on average) than do those on day trips.
When U.S. Travel Data Center information is considered, the average
travel party size is estimated to be 4.79 for the winter, and 4.62 for
the spring and 4.74 for the season. This is because day trip parties
are usually smaller in size and are less likely to be clubs and
organizational trips.
Table 6.--Travel Party Characteristics
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Party make-up (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Family only..................................................... 42.2 37.6 40.9
Friends only.................................................... 12.4 15.4 13.2
Family & Friends................................................ 40.1 41.0 40.4
Clubs & Groups.................................................. 3.5 4.2 3.7
Alone........................................................... 1.3 1.4 1.3
Other........................................................... 0.5 0.4 0.5
Average size.................................................... 5.14 4.87 5.06
----------------------------------------------------------------------------------------------------------------
Activities While on This Trip
The forms for this skier survey were handed out at both alpine and
cross country ski areas. Alpine skiing was both the most important
activity and the most common activity undertaken while on this trip.
Table 7 shows the most important activity which was undertaken on the
trip, while Table 8 shows the second most important activity. It
appears that alpine skiers engaged in a variety of other outdoor
activities, shopping and entertainment while on their trip, with
shopping ranked highest of the second most important activities (see
Table 8). Those who indicated that visiting friends and relatives or
attending business meetings or a conference as the most important
activity were very likely to have alpine skiing as their second most
important activity.
Table 7.--Most Important Activity
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Activity (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Alpine ski...................................................... 82.0 92.8 85.0
Snowboard....................................................... 1.5 1.1 1.4
X-country ski................................................... 4.0 0.5 3.0
Snowmobiling.................................................... 0.0 0.0 0.0
Other Outdoor................................................... 1.1 1.1 1.1
[[Page 56045]]
Shopping........................................................ 1.1 0.0 0.8
Indoor Rec/Ent.................................................. 0.9 0.0 0.6
Visit Frnd/Rel.................................................. 7.9 4.0 6.8
Business trip................................................... 1.5 0.5 1.2
----------------------------------------------------------------------------------------------------------------
Table 8.--Second Most Important Activity
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Activity (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Alpine ski...................................................... 17.1 11.0 15.4
Snowboard....................................................... 8.0 19.2 11.1
X-country ski................................................... 9.3 4.1 7.8
Snowmobiling.................................................... 2.9 0.3 2.2
Other Outdoor................................................... 8.6 5.4 7.7
Shopping........................................................ 27.2 40.5 30.9
Indoor Rec/Ent.................................................. 12.1 9.5 11.4
Visit Frnd/Rel.................................................. 14.2 10.1 13.1
Business trip................................................... 0.7 0.0 0.5
----------------------------------------------------------------------------------------------------------------
Table 9 shows the activities which those completing the survey
forms indicated that they participated in while they were on this trip.
Alpine skiing, cross country skiing, snowboarding and other outdoor
recreation (hiking, skating, snowmobiling, ice fishing, etc.) were all
important outdoor activities. Shopping, indoor entertainment and
visiting friends and relatives were other important trip activities.
Cross country skiing and other outdoor activities were more common as
important activities during the winter months than for the spring, most
likely due to the lack of snow at cross country ski areas and a lack of
safe ice on lakes during the spring months of 1995.
Table 9.--Participated in This Activity
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Activity (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Alpine ski...................................................... 92.6 98.6 94.3
Snowboard....................................................... 8.8 11.1 9.2
X-country ski................................................... 17.5 9.5 15.3
Snowmobiling.................................................... 4.4 6.4 5.0
Other Outdoor................................................... 22.5 14.3 20.2
Shopping........................................................ 53.6 52.8 53.3
Indoor Rec/Ent.................................................. 28.2 21.2 26.2
Visit Frnd/Rel.................................................. 24.9 21.0 23.8
Business trip................................................... 2.9 3.1 3.0
----------------------------------------------------------------------------------------------------------------
Accommodations for Multi-Day Trips
Ski parties which responded to the skier survey were very likely to
be on a multi-day trip. It appears that 67 percent of all winter ski
trip parties responding were on a multi-day trip and that 71 percent of
the spring season parties responding were on such a trip. This averages
out to 68 percent for the season, for those parties that responded.
These percentages are estimated as this section of the survey form was
not completely filled out by all respondents.
For those parties which did stay overnight, the average stay was
relatively lengthy. Winter month overnight ski parties stayed an
average of 5.24 nights, compared to an average of 3.72 nights in the
1992-3 season and spring overnight ski parties stayed an average of
6.24 nights, compared to an average of 3.03 nights in the 1992-3
season. The average for the entire season was 5.52 nights for overnight
ski parties, compared to an average of 3.49 nights in the 1992-3
season. While the largest number of parties on overnight trips stayed
for only two nights, a significant share of ski groups stayed for seven
nights or longer. The average stay for all ski parties (including day
trips) for those responding to the survey was 3.53 nights during the
winter months and 4.43 nights for the spring months. This produced an
average of 3.78 nights for all trips for the season.
The U.S. Travel Data Center information for New Hampshire indicates
that skiers on overnight trips were far more likely to complete the
INHS survey form than skiers on day trips. As a result, it is estimated
that overnight trip skiers were 58 percent of all skiers days, up from
47 percent during the 1992-3 season, but below the 68 percent figure
for those parties which returned the forms. When this assumption of 58
percent of all skiers days by overnight visitors is used, then the
average stay increases to 3.63 nights for the winter, 5.59 nights for
the spring and 4.18 nights for the season. These averages for 1994-5
compare with 1.72 nights for winter 1992-3; 1.90 nights for spring 1993
and 1.78 nights for the 1992-3 season--when a larger share of all
skiers were on day trips.
Table 10 shows the percentage of overnight ski parties staying at
each different type of accommodation. In contrast, Table 11 shows the
share of length of stay spent at each type of accommodation. A
comparison of Tables 10 and 11 shows that the shortest visits were by
those who stayed at motels, hotels and resorts and at inns and bed and
breakfast establishments. This is the case as the percentage share
[[Page 56046]]
of length of stay in Table 11 is less than the percentage staying at
this type of accommodation as shown in Table 10. Those parties which
stayed the most nights were in second homes or camping in RV's. Parties
staying in a condominium (owned or rented) or staying at a place owned
by a friend or relative were near the average in terms of length of
stay. Spring season skiers were more likely to be attracted to stay at
a hotel, motel, resort, inn and bed and breakfast and less likely to be
camped in an RV than the winter season skier. Spring skiers were more
likely to stay longer than winter skiers.
Table 10.--Stayed at This Type of Accommodation
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Type (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Motel/resort.................................................... 25.2 33.8 27.6
B&B/Inn......................................................... 5.6 8.8 6.5
Second home..................................................... 14.9 11.8 14.0
Condominium..................................................... 22.4 17.8 21.1
Friend/Rel...................................................... 26.8 24.6 26.2
Other *......................................................... 5.1 3.2 4.6
----------------------------------------------------------------------------------------------------------------
* Most in the ``Other'' category were camping.
Table 11.--Share of Length of Stay at This Type of Accommodation
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Type (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Motel/resort.................................................... 15.4 27.4 18.5
B&B/Inn......................................................... 2.8 3.2 2.9
Second home..................................................... 20.2 25.5 21.7
Condominium..................................................... 23.8 18.3 22.6
Friend/Rel...................................................... 25.2 23.3 24.5
Other *......................................................... 12.6 2.3 9.8
----------------------------------------------------------------------------------------------------------------
* Most in the ``Other'' category were camping.
Compared with the 1992-3 season, those on overnight trips in 1994-5
were far more likely to be staying in a second home, property of a
friend or relative or to be camping. Stays at motels, resorts and
rented condominums were fewer during the 1994-5 season than for the
1992-3 season. The U.S. Travel Data Center information for winter 1995
on type of accommodations used was consistent with the information
provided by the skiers. As those who stay at hotels, motels and resorts
stay for a shorter period of time than other overnight visitors, their
decrease in number is a second reason (after the reduction in day
trips) for the increase in the average length of stay by skiing parties
during the 1994-5 season in comparison with the 1992-3 season.
Travel Party Spending
The average spending per travel party from those parties which
responded is shown in Table 12, but has been adjusted upward to reflect
travel spending reported for all winter 1995 visitors to New Hampshire
by the U.S. Travel Data Center. Even with this adjustment, average
spending per visitor day may appear to be low. The reason for this is
that 54.3% fewer visitor days by ski parties were spent in paid
overnight accommodations than was the case in 1992-3. This was because
49.3% of overnight visitors stayed in second homes, condominium or time
share units and/or accommodations owned by friends and relatives.
Spending at the ski area (Recreation in Table 12) was a relatively
large share (31%) of all spending. Spending at grocery stores is also
relatively high (5%) and reflects the relatively large share of
overnight visitors who stayed in accommodations with kitchens.
Table 12.--Average Travel Party Spending
----------------------------------------------------------------------------------------------------------------
Category Winter Spring Season
----------------------------------------------------------------------------------------------------------------
Lodging......................................................... $384.34 $517.58 $421.65
Restaurants..................................................... 406.50 529.76 441.01
Groceries....................................................... 82.39 103.52 88.31
State Liquor.................................................... 19.25 27.40 21.53
Transportation.................................................. 82.05 121.78 93.17
Recreation...................................................... 545.18 707.26 590.56
Shopping........................................................ 203.94 299.89 230.81
Services & Other................................................ 33.27 24.36 30.78
-----------------------------------------------
Total....................................................... 1756.92 2331.55 1917.82
Per person trip................................................. 366.79 504.66 404.60
Per visitor day................................................. 79.22 76.58 78.48
----------------------------------------------------------------------------------------------------------------
As noted previously, the average length of the spring skiing trip
was longer than the winter trip. Thus, spending per party trip and per
visitor trip was higher for the spring season, even though spending per
visitor day is
[[Page 56047]]
lower during the spring months than for the winter months.
Obtaining and Using Travel Information
The skiers were asked several questions to determine how they
obtained and used information in order to plan and undertake the ski
trip. Table 13 shows the single most important source of information
used to plan and undertake the ski trip. Previous trips and advice from
friends and relatives were the two most important sources. Snow phone
information, ticket promotions and ski area brochures were also very
important.
Table 13.--Most Important Information Source Used
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Source (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Prior trips..................................................... 36.1 31.2 34.7
Friends/Rel..................................................... 20.8 9.6 17.7
Snow phone...................................................... 13.3 7.6 11.7
Ticket promotion................................................ 3.9 17.5 7.7
Ski area brochures.............................................. 3.8 6.9 4.7
Newspaper story................................................. 3.8 3.5 3.7
NH Winter Vis. G................................................ 3.2 2.7 3.1
Weather report.................................................. 2.5 4.4 3.0
Magazine story.................................................. 3.3 0.5 2.5
TV ad........................................................... 2.5 1.7 2.3
Regional Guides................................................. 2.5 1.7 2.3
Newspaper ad.................................................... 0.6 4.2 1.6
TV story........................................................ 0.7 2.7 1.3
Radio ad........................................................ 1.2 0.7 1.1
Radio story..................................................... 1.3 0.4 1.0
SKI-NH Mag...................................................... 0.6 1.5 0.9
Ski Show........................................................ 0.0 1.7 0.5
Travel Agents................................................... 0.0 1.3 0.4
Magazine ad..................................................... 0.0 0.2 0.1
Billboard ad.................................................... 0.0 0.0 0.0
----------------------------------------------------------------------------------------------------------------
Table 14 shows the second most important source of information used
in planning and undertaking the skiing trip. Previous trips and advice
from friends and relatives are still the two most important sources of
information used, but are relatively less important proportionally
among the second most important sources. Those who selected one of
these two as the most important source of information were very likely
to name snow phones, weather reports, ski area brochures and ticket
promotions as their second leading source of information.
Table 14.--Second Most Important Information Source Used
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Source (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Prior trips..................................................... 12.1 20.8 14.5
Friends/Rel..................................................... 11.8 14.6 12.6
Snow phone...................................................... 10.9 9.2 10.4
Weather report.................................................. 12.5 4.6 10.3
Ski area brochures.............................................. 12.5 4.2 10.2
Ticket promotion................................................ 10.4 7.0 9.4
Newspaper story................................................. 6.0 7.1 6.3
Radio ad........................................................ 6.1 6.2 6.1
NH Winter VIS.G................................................. 2.9 2.1 2.7
TV ad........................................................... 2.3 3.2 2.6
Radio story..................................................... 2.3 3.2 2.6
Magazine story.................................................. 1.4 4.2 2.3
Ski Show........................................................ 1.6 2.6 1.9
SKI-NH Mag...................................................... 1.6 1.9 1.7
Regional Guides................................................. 0.8 2.8 1.4
TV story........................................................ 1.5 1.3 1.4
Magazine ad..................................................... 1.4 1.5 1.4
Newspaper ad.................................................... 0.8 3.0 1.4
Travel Agents................................................... 1.5 0.2 1.1
Billboard ad.................................................... 0.8 0.0 0.6
----------------------------------------------------------------------------------------------------------------
Table 15 shows the percentage of responding parties which said that
they made use of each of the various sources of information. Previous
trips remained the most important source of information used. However,
a much wider range of sources of information were used which may not
have been the most important or second most important sources of
information as listed in Tables 13 and 14. There were also differences
between the winter and spring months in the importance of some of the
types of information used, as in the previous tables. The largest
differences between the winter and spring months in Table 15 for ticket
promotions and SKI-NH Magazine, both
[[Page 56048]]
of which were used more frequently during the spring months.
Table 15.--Used This Information Source
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Source (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Prior trips..................................................... 69.6 77.4 71.8
Ski area brochures.............................................. 36.6 36.6 36.6
Friends/Rel..................................................... 38.0 30.4 35.9
Snow phone...................................................... 34.8 34.3 34.7
Ticket promotion................................................ 19.2 31.5 22.6
Weather report.................................................. 22.8 21.9 22.5
Newspaper story................................................. 19.1 22.4 20.0
NH Winter Vis. G................................................ 20.3 16.9 19.3
Newspaper ad.................................................... 18.2 20.2 18.8
SKI-NH Mag...................................................... 14.1 27.9 18.0
Magazine story.................................................. 16.5 18.7 17.1
Radio ad........................................................ 13.5 18.9 15.0
Regional Guides................................................. 12.9 19.7 14.8
Magazine ad..................................................... 14.9 13.5 14.5
TV ad........................................................... 13.9 15.2 14.3
TV story........................................................ 12.3 16.3 13.4
Radio story..................................................... 10.4 13.5 11.3
Billboard ad.................................................... 5.8 6.7 6.1
Ski Show........................................................ 3.0 5.6 3.7
Travel Agents................................................... 2.1 3.2 2.4
----------------------------------------------------------------------------------------------------------------
The ``information source use index'' score in Table 16 is obtained
by multiplying the most used source percentage by three, the second
most used source percentage multiplied by two and the information
source used percentage by one; then adding these scores and dividing by
six. This provides a weighted score for each of the information sources
used by winter and spring months and for the season.
The results of this process indicate that prior trips remain the
most important/used source of information. During the winter months the
second most important/used source is advice from friends and relatives,
followed by snow phones. However, during the spring months the second
most important/used source is ticket promotions, followed by advice
from friends and relatives. There are other differences between winter
and spring in the importance and use of the various information
sources, although weather reports and ski area brochures tend to rank
high for both winter and spring. SKI-NH Magazine, regional guides and
radio advertisements were more frequently used during the spring months
than during the winter months. The three lowest ranking sources for
both winter and spring were: ski shows, billboard advertising and
travel agents.
Table 16.--Information Source Use Index
------------------------------------------------------------------------
Winter Spring Season
Source index index index
------------------------------------------------------------------------
Prior trips.................................. 33.7 35.4 34.2
Friends/Rel.................................. 20.7 14.7 19.0
Snow phone................................... 16.1 12.6 15.1
Ski area brochures........................... 12.2 11.0 11.9
Ticket promotion............................. 8.6 16.3 10.8
Weather report............................... 9.2 7.4 8.9
TV ad........................................ 9.2 4.5 7.9
Newspaper story.............................. 7.1 7.9 7.3
NH Winter Vis.G.............................. 6.0 4.9 5.7
Radio ad..................................... 4.9 5.6 5.1
Magazine story............................... 4.9 4.8 4.9
Newspaper ad................................. 3.6 6.5 4.4
Regional Guides.............................. 3.7 5.1 4.1
SKI-NH Mag................................... 3.2 6.0 4.0
Radio story.................................. 3.2 3.5 3.3
TV story..................................... 2.9 4.5 3.3
Magazine ad.................................. 3.0 2.9 3.0
Ski Show..................................... 1.0 2.7 1.5
Billboard ad................................. 1.2 1.1 1.2
Travel Agents................................ 0.9 1.3 1.0
------------------------------------------------------------------------
The following table (Table 17) reorganizes the information shown in
Table 16 by grouping the information sources by the level of control
that the ski areas have over the design and use made of this
information and its distribution. The average index score for the
entire season is used to rank the information sources within these
categories. For most of the information categories the ski areas either
provide or produce the information directly or have other organizations
provide it or distribute it on their behalf. This includes various
types of media in which advertising occurs.
Skiers do make significant use of information which is produced
directly by the ski areas in making trip decisions. Most day trip
skiers also want up-to-date information as part of the trip decision
process, as indicated by the importance of snow phones, weather reports
and TV and radio advertising. Advice from friends and relatives and
regional guides were also more likely to be sued by those on day trips.
The information sources more likely to be used by skiers on overnight
trips than those on day trips were: prior trips, ticket promotions, NH
Winter Visitors Guide, SKI-NH Magazine and travel agents.
Table 17.--Control of Information Source and Importance/Use by Ski Area
------------------------------------------------------------------------
Season use
Source index
------------------------------------------------------------------------
No Control Over Information Source:
Prior trips............................................. 34.2
Friends/Relatives....................................... 19.0
Weather report.......................................... 8.9
Indirect/Limited Control Over Information Source:
Snow phone.............................................. 15.1
Newspaper story......................................... 7.3
Magazine story.......................................... 4.9
TV story................................................ 3.3
Radio story............................................. 3.3
Travel Agent............................................ 1.0
Direct/Significant Control Over Information Source:
[[Page 56049]]
Ski area brochures...................................... 11.9
Ticket promotion........................................ 10.8
TV ad................................................... 7.9
NH Winter Visitors Guide................................ 5.7
Radio ad................................................ 5.1
Newspaper ad............................................ 4.4
Regional Guides......................................... 4.1
SKI-NH Magazine......................................... 4.0
Magazine ad............................................. 3.0
Ski Show................................................ 1.5
Billboard ad............................................ 1.2
------------------------------------------------------------------------
The skiers were asked how they used the above sources of
information to make trip decisions. Table 18 summarizes how this
information was used. Almost one-third noted that they did not make any
use of the information sources listed, although it is very likely that
this group did make use of their knowledge from previous trips.
Selecting the ski area(s) was the major use made of this information.
Table 18.--Information Were Sources Used to Select
----------------------------------------------------------------------------------------------------------------
Winter Spring Season
Activity (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Ski Areas....................................................... 47.3 39.5 45.1
Lodging......................................................... 14.7 19.1 15.9
Dining.......................................................... 16.7 18.5 17.2
Itinerary....................................................... 9.2 10.0 9.4
Shopping Areas.................................................. 13.6 8.7 12.2
Did not use information......................................... 25.9 37.1 29.0
----------------------------------------------------------------------------------------------------------------
The skiers were asked to provide three key words that best
described New Hampshire. In Table 19 the top ten words mentioned are
ranked with the most weight if the word was listed first, less weight
if second and no weight if listed third. There was some variation among
the winter and spring months in the ranking of these words, but only 13
different words appeared on the top ten lists for the winter and spring
months. The three words which made either the winter or spring top ten
list, but did not make the top ten list for the season (shown in Table
19) are: ``rural,'' ``natural'' and `'safe.'' ``Beautiful'' was listed
three times as often as the second place word: ``scenic.'' These two
words plus ``friendly'' and ``clean'' are very often used to describe
other seasons of the year. ``Relaxing'' and ``peaceful'' are very
common words which appear in other spring season surveys. ``Great,''
``fun,'' ``mountains'' and ``cold'' are words which must be associated
with skiing as they have not been found to be highly ranked in other
surveys of New Hampshire visitors.
Table 19.--Key Words
------------------------------------------------------------------------
Winter Spring Season
Word rank rank rank
------------------------------------------------------------------------
Beautiful.................................... 1 1 1
Scenic....................................... 2 2 2
Friendly..................................... 3 5 3
Relaxing..................................... 4 2 4
Great........................................ 5 7 5
Fun.......................................... 7 4 6
Clean........................................ 6 8 7
Mountains.................................... 8 9 8
Cold......................................... 9 9 9
Peaceful..................................... 10 6 10
------------------------------------------------------------------------
Conclusion
The returned survey forms skiers during the 1994-5 season indicate
that the core group of skiers were those who stay at their own (or a
friend's) second home, condominium or time share unit. There was little
change in the numbers of this group who skied in comparison with the
1992-3 season. Those skiers who pay to stay overnight at a resort,
motel, inn or bed and breakfast were less likely to visit a ski area
during the 1994-5 season. The day trip skier also appeared to be
smaller in number than in recent seasons.
The survey results show that skiers do use information in deciding
whether or not to go skiing, what ski areas to visit, where to stay and
dine and where to shop during their ski trip. The winter and spring
skiers have slightly different demographic and trip characteristics.
The winter skier is more likely to be a beginner and to be from New
England. The Canadian skier is more likely to visit during the springs,
as has been found in other surveys. Skiers who come to New Hampshire
make very little use of ski shows, bill board advertising and travel
agents in making ski trip decisions. Snow phones, ski area brochures,
special ticket promotions, weather reports and television advertising
are important advertising and information sources for skiers.
Davidson-Peterson Associates, Inc.
Research Memorandum
Profile of Visitors to Maine's Ski Resorts, Winter Ski Season 1994-
95
Presented to: Ski Maine
Presented by: Davidson-Peterson Associates, Inc., P.O. Box 350/18
Brickyard Court, York, Maine 03909-0350
A. Introduction
Davidson-Peterson Associates, Inc. was commissioned by Ski Maine to
conduct a visitor profile and expenditure study for the State's ski
destinations during the 1994-95 ski season.
In order to complete this task, Ski Maine acquired the cooperation
of the Ski Industries Department at the University of Maine at
Farmington. Between December 17, 1994 and February 26, 1995, a team of
students visited all 13 Ski Maine members and collected and coded a
total of 896 completed questionnaires. These questionnaires were then
processed by Davidson-Peterson Associates, Inc. staff.
Using confidential industry information, the data were weighted to
represent the total universe of visitors to Maine's ski areas during
the past ski season.
Now let's take a look at who skis in the state of Maine.
B. Who Visits Maine's Ski Areas?
1. Region of Residence
Maine's skiers live nearby. Most of Maine's skiers are residents of
the United States (96%). Nearly eight in 10 reside within New England
(78%), and fully two in five are Mainers (40%). One quarter are
residents of Massachusetts (25%), and one in 20 resides in New
Hampshire (5%). Fewer are residents of
[[Page 56050]]
Connecticut (4%) or Rhode Island (3%). Less than one half of one
percent are from Vermont.
One Maine skier in 20 is a resident of the Middle Atlantic states
(6%).
One in eight reports that he/she is a resident of the United States
but chose not to specify.
Of the few international skiers, half are Canadian residents (2%).
2. How Old Are They?
Visitors to Maine's ski areas are all ages. Not surprisingly,
Maine's skiers tend to be middle-aged or younger, with an average of
37.1. More than half are between the ages of 35 and 54 (54%). Nearly
one quarter are 25-34 (23%). One in six is a young adult 18-24 (16%).
Very few of Maine's skiers are 55 or older (5%). Of course, respondents
had to be at least 18 years old to complete the survey.
3. Gender
More than half of the visitors to Maine's ski areas are male (54%).
While fewer than two in five are female (39%), one in 12 chose not to
respond (7%).
4. How Much Do They Make?
Maine's skiers tend to be affluent. More than two in five report
their annual pretax household income to be more than $60,000 (41%).
Fewer report earning less than $30,000 (15%), while one in ten chose
not to answer (9%).
The average reported annual pretax household income is $57,600.
Now let's examine the detailed findings of this study.
C. Detailed Findings
1. Reason For This Ski Trip
Visitors to Maine's ski areas are there for one main reason--to
ski. Fully seven responders in 10 report that the one main reason for
their trip was to visit that particular ski resort (70%). One in 10
reports taking the trip for rest and relaxation--a change of pace
(11%).
Slightly more than one in ten reports the main reason for the trip
being either to visit several ski areas or to visit friends and
relatives (6% each). One in 20 is either seeing an area not yet seen or
attending a special event (3% and 2%, respectively).
2. Number of Nights Spent In Maine
Visitors to Maine's ski areas spend an average of 4.1 nights away
from home in Maine during a ski trip. One in five spends 1-2 nights
away from home in Maine (19%). Slightly fewer spend 3-4 nights away
from home in Maine (15%). However, fully one in five spend at least
five nights away from home in Maine (20%).
Two Maine skiers in five spend no nights away from home during
their ski trip (41%).
Residents of Maine staying overnight away from home stay an average
of 3.6 nights, while non-residents stay an average of 4.2 nights.
3. Type of Overnight Accommodations
Maine's skiers are equally likely to stay in paid accommodations or
accommodations with no fee. One half of those visitors who stayed
overnight in Maine stayed in paid accommodations (49%). Nearly one
quarter stayed in a rented home/condominium/cabin (23%). One in five
stayed in a hotel/motel/resort (19%). Many fewer stayed in either a
historic inn (4%) or a bed and breakfast (3%).
Therefore, one half of those visitors staying overnight in Maine
also stayed in accommodations with no fee (51%). One quarter stayed in
an owned or borrowed home/condominium/cabin (23%). One in seven stayed
at the home of friends or family (14%). One in seven also chose not to
specify (15%).
4. Travel Party Size
Visitors to Maine's ski areas do not travel alone. The average
travel party size of visitors to Maine's ski resorts is 3.5 persons.
The average party size for non-residents is 3.8, compared to an
average of 3.0 for residents.
5. Presence of Children in Party
Perhaps surprisingly, there do not tend to be children in Maine's
ski travel parties. Fully three visitors to Maine's ski areas in five
report that there are no children younger than 13 in their travel party
(60%).
Of those who are traveling with children younger than 13, the
average number of children per travel party is 1.9.
6. Type of Skiing Participated In By Party
Maine's skiers do just that--downhill ski. Nearly all of the
respondents reported that someone in their travel party was going to
participate in downhill skiing (95%). One in seven reported that
someone would cross-country ski or snowboard (15% and 14%,
respectively). Very few reported that someone would telemark ski (3%).
Not surprisingly, due to its increasing popularity with young
adults, those visitors 18-24 are less likely to participate in downhill
skiing (89% vs. 97%) and far more likely to participate in snowboarding
(27% vs. 11%).
7. Reason For Skiing In Maine
Not surprisingly due to the region of residence of Maine's skiers,
they are skiing in Maine because of its location and reputation. Nearly
two visitors in five to Maine's ski resorts say they are skiing in
Maine because they live either in Maine or nearby (38%). Slightly fewer
are skiing in Maine because of the reputation of the area and the
facilities (34%). One in eight is visiting family or friends (12%). One
in 20 is taking advantage of a special package (6%).
Interestingly, one half of the non-residents are visiting Maine due
to the reputation of the facilities (52%), and nearly one in five is
visiting family and friends (17%).
8. Type of Transportation Used
Another unsurprising characteristic due to Maine's skiers' region
of residence, they drive their own vehicles to the ski areas. More than
nine Maine skiers in 10 used their own vehicles to get to the ski area
(92%). One in 20 either rented a vehicle or took a bus (3% each). Fewer
still flew (2%--1% to Boston and 1% to Portland).
1% reported taking a train--more than likely the Silver Bullet
Express to Sunday River.
9. Experience on Maine's Roadways
Overall, visitors to Maine's ski areas rate the State's roadways
above average. On the Maine Turnpike, more than three visitors in five
rated the road conditions either very good or good (65%), and another
one in 10 rated them average (11%). Traffic was reported to be very
good or good by fully three in five visitors (60%). Slightly fewer
ranked signage and traffic at toll booths the same (58% and 57%,
respectively).
Aside from the Turnpike, traffic on the other roadways within the
State was rated very good or good by more than three visitors in five
(63%). Fully three in five also rated the road conditions and signage
the same (60% each).
Maine residents tended to give the State's roadways a lower grade
than non-residents.
10. Most Important Factor in Timing of Trip Home
When deciding what time to head home, the majority of Maine's
skiers cite the distance they have to travel as the most important
factor. More than three visitors to Maine's ski areas in five reported
that the single most important factor used in determining the time they
head home is the distance that they have to travel (64%). Another one
in six report the reason to be fatigue (16%). One in 10 say he/she
decides when to leave depending upon the weather
[[Page 56051]]
(11%). One in 20 either make this decision depending on traffic or did
not respond (5% each).
11. How Downhill Ski Trips Are Planned
Maine's skiers like to ski whenever they have the opportunity to do
so. One half of the Maine skiers plan their ski trips whenever time and
finances allow them to do so (50%). One third say they try to plan a
ski vacation with at least one overnight each ski season (36%). Three
in 10 report taking day ski trips several times each ski season (28%).
One in 10 says that they do not plan their downhill ski trips (9%).
Non-residents are more than twice as likely as residents are to
plan a ski vacation with at least one overnight each ski season (46%
vs. 21%).
12. Pattern of Overnight Ski Vacations
Not surprising due to the response found in the previous section,
visitors' trips to Maine's ski areas tend not to follow a pattern. More
than one third of the visitors to Maine's ski areas report that their
overnight ski vacations do not follow a pattern (35%). One visitor in
five says he/she plans overnight trips for President's Week--February
18 through February 26 during 1995--each year (22%). One in six says
he/she takes a ski vacation between January 2 and February 17 (16%).
Slightly fewer take a ski vacation between February 27 and the end of
the ski season (12%) or during Christmas Week--December 25 through
January 1 (11%). Very few Maine skiers take a ski vacation prior to
Christmas each year (7%).
One in five visitors chose not to respond to this question (19%).
13. Activities Participated in During Ski Trip
Besides skiing, visitors to Maine's ski areas are there to relax.
Nearly three visitors in five say they are going to participate in
relaxing ``quiet time'' during their trip (58%). Two in five say they
are going to enjoy fine dining (38%). One quarter report seeking
nightclub entertainment (26%) or fitness activities (23%). One in six
reports sightseeing (16%). Very few say they will go snowmobiling (7%),
snowshoeing (3%), skating or cross-country skiing (2% each), or
shopping (1%).
Non-residents are far more likely to participate in relaxing
``quiet time'' (64% vs. 47%), as well as sightseeing (18% vs. 12%).
14. Bring Lunch or Purchase Lunch
The cost of food at Maine's ski areas causes visitors to bring
their own lunches with them to the mountain. Slightly more than half of
Maine skiers bring their lunches with them (52%). One third bring their
lunches from home (34%). Many fewer bring their lunches from non-paid
overnight accommodations or a retail establishment (6% each), or from
paid overnight accommodations (4%).
Of course, residents are more likely to bring their lunches with
them (58% vs. 48%).
Of those who brought their lunches with them, nearly two-thirds
report doing so because the price of food at the ski areas is too high
(64%). Other reasons given were the quality of food available at the
ski areas (17%), the selection/variety available (14%), and the fact
that they did not want to wait in line (11%). Only slightly more than
two in five purchase lunch at the ski area (44%).
15. Where Do Maine's Skiers Ski?
Visitors to Maine's ski areas also visit ski destinations in other
states. Nearly three quarters of those who skied in Maine during this
past ski season also skied in Maine during the previous ski season--
1993-1994 (72%). More than two in five skied at Sunday River (43%),
while slightly fewer skied at Sugarloaf (37%).
Three visitors in 10 visited a New Hampshire ski area during 1993-
'94 (29%). One in five skied in Vermont (21%).
Of course during this past ski season--1994-1995--all of those
visitors responding skied in Maine (100%). Two-thirds skied at Sunday
River at least once during the past ski season (64%), while one half
skied at Sugarload (49%). One in five visited Shawnee Peak (20%).
Three Maine skiers in 10 also skied at least once at a New
Hampshire area this past season (28%). Slightly fewer visited a Vermont
ski area (22%).
16. Average Number of Days Skied
Visitors to Maine's ski areas ski often. Maine's skiers skied an
average of 16.6 times in Maine during the past ski season--up slightly
from an average of 16.3 in 1993-'94.
They skied an average of 6.7 times in New Hampshire (vs. 6.0 the
previous season), and 4.9 times in Vermont (down slightly from 5.2 the
previous season). They also skied 8.4 times at other destinations (down
from 9.3 the previous season).
D. How Much Do They Spend?
1. Hotel/Motel/Resort/Bed & Breakfast/Historic Inn
Visitors to Maine's ski areas who stay overnight in a hotel, motel,
resort, bed & breakfast or historic inn have the highest daily
expenditures. These visitors spend an average of $111.82 per person per
day.
One third is spent on lodging (35%, or $39.13). Slightly less is
spent on sports fees such as lift tickets and equipment rental (27%, or
$30.75). One fifth of the daily expenditure is for food (19%, or
$20.84). Less than one tenth is spent on shopping (7%, or $7.89). Other
expenditures total $13.21.
BILLING CODE 4410-01-M
[[Page 56052]]
[GRAPHIC] [TIFF OMITTED] TN30OC96.006
2. Rented Condominium/Cabin
Slightly less is spent by Maine skiers who rent a condominium or
cabin during their stay in the state. These visitors spend $110.57 per
person per day.
More than two-fifths of this expenditure is for lodging (42%, or
$46.70). Nearly one third is spent on sports fees (30%, or $33.37). One
eighth is spent on food (14%, or $15.19). Very little is spent on
shopping (6%, or $6.93). Other expenditures total $8.38.
BILLING CODE 4410-01-M
[GRAPHIC] [TIFF OMITTED] TN30OC96.007
[[Page 56053]]
3. Daytrippers
Not surprisingly, visitors to Maine's ski areas who do not spend
any nights away from home spend far less than those who do. These
visitors spend an average of $56.44 per person per day.
Two thirds of their expenditures are for sports fees (67%, or
$38.08). They spend one sixth on food (15%, or $8.64). They also spend
very little on shopping (6%, or $3.22). Other expenditures total $6.52.
BILLING CODE 4410-01-M
[GRAPHIC] [TIFF OMITTED] TN30OC96.008
4. Visiting Friends and Relatives
Those visitors who are staying at the home of friends or relatives
spend nearly the equivalent of daytrippers. These visitors spend an
average of $56.15 per person per day.
More than two fifths of their expenditures are for sports fees such
as lift tickets and rental equipment (43%, or $24.05). One quarter is
for food (24%, or $13.34). They spend more on shopping than others do
(15%, or $8.60). Other expenditures total $10.15.
BILLING CODE 4410-01-M
[GRAPHIC] [TIFF OMITTED] TN30OC96.009
[[Page 56054]]
5. Condominium/Cabin Owned or Borrowed
Visitors to Maine's ski areas who stay overnight in a condominium
or cabin that they either own or borrowed have spent the least during
their trip. Those visitors on average spend $46.63 per person per day.
Two thirds of this expenditure is for sports fees (41%, or $18.99).
Much like those visitors staying with friends or relatives, those
staying in an owned or borrowed condo/cabin spend one quarter of their
expenditures on food (26%, or $12.04). One eighth is spent on shopping
(13%, or $6.11). Other expenditures total $9.49.
BILLING CODE 4410-01-M
[GRAPHIC] [TIFF OMITTED] TN30OC96.010
1. Reason For This Ski Trip
------------------------------------------------------------------------
Non-
Total Resident resident
------------------------------------------------------------------------
Base.................................... (888) (357) (523)
percent percent percent
Visiting this ski resort................ 70 72 68
Rest and relaxation--a change of pace... 11 16 7
Visiting several ski resorts............ 6 2 9
Visiting friends and relatives.......... 6 3 9
Seeing an area I have not seen.......... 3 1 4
Attending a special event............... 2 1 2
Other................................... 2 4 1
------------------------------------------------------------------------
2. Total Number of Nights Spent in Maine
------------------------------------------------------------------------
Non-
Total Resident resident
------------------------------------------------------------------------
Base.................................... (888) (357) (523)
percent percent percent
None.................................... 9 2 13
One..................................... 5 6 4
Two..................................... 14 6 20
Three................................... 9 2 14
Four.................................... 6 2 8
Five or more............................ 20 7 28
Resident................................ 32 73 .........
Second home............................. 2 ......... 7
No answer............................... 4 2 5
Mean.................................... 4.1 3.6 4.2
------------------------------------------------------------------------
Note: Columns of figures may not add to totals shown due to rounding.
[[Page 56055]]
3. Type of Overnight Accommodations
------------------------------------------------------------------------
Non-
Total Resident resident
------------------------------------------------------------------------
Base: those who stayed overnight........ (632) (216) (409)
percent percent percent
Paid Accommodations..................... 49 23 62
Hotel/motel/resort.................... 19 9 24
Bed and breakfast..................... 3 1 4
Historic inn.......................... 4 1 5
Rented home/condominium/cabin......... 23 11 29
Accommodations/No Fee................... 51 77 38
Owned or borrowed home/condominium/
cabin................................ 23 30 19
Home of family or friends............. 14 12 15
No answer............................. 15 36 4
------------------------------------------------------------------------
Note: Columns of figures may not add to totals shown due to rounding.
4. Travel Party Size
----------------------------------------------------------------------------------------------------------------
Non-
Total Resident Resident
----------------------------------------------------------------------------------------------------------------
Base........................................................................... (888) (357) (523)
percent percent percent
One............................................................................ 10 12 8
Two............................................................................ 29 35 25
Three.......................................................................... 18 21 16
Four-five...................................................................... 28 23 32
Six-eight...................................................................... 12 8 15
Nine or more................................................................... 3 (*) 4
Mean........................................................................... 3.5 3.0 3.8
----------------------------------------------------------------------------------------------------------------
Note: Columns of figures may not add to totals shown due to rounding.
*Less than 0.5%.
5. Presence of Children in the Party
------------------------------------------------------------------------
Non-
Total Resident resident
------------------------------------------------------------------------
Base: those who answered................ (798) (313) (479)
percent percent percent
None.................................... 60 59 60
One..................................... 16 18 16
Two..................................... 16 14 17
Three................................... 5 6 3
Four or more............................ 3 2 3
Mean (excluding none)................... 1.9 1.9 1.9
------------------------------------------------------------------------
6. Type of Skiing Participated In by Party
------------------------------------------------------------------------
Non-
Total Resident resident
------------------------------------------------------------------------
Base.................................... (888) (357) (523)
percent percent percent
Downhill ski............................ 95 94 96
Cross-country ski....................... 15 20 11
Snowboard............................... 14 14 14
Telemark ski............................ 3 5 1
------------------------------------------------------------------------
Note: Multiple responses allowed.
7. Reason For Skiing in Maine
------------------------------------------------------------------------
Non-
Total Resident resident
------------------------------------------------------------------------
Base........................................ (888) (357) 523)
Nearby/live in Maine (percent).............. 38 81 8
Reputation of area/facilities (percent)..... 34 8 52
Visit family/friends (percent).............. 12 4 17
[[Page 56056]]
Special package offered (percent)........... 6 5 8
Recommendation (percent).................... 3 1 5
Location of vacation home/condo (percent)... 3 1 4
No answer (percent)......................... 3 (*) 5
------------------------------------------------------------------------
Note: Columns of figures may not add to totals shown due to rounding.
* Less than 0.5%.
8. Type of Transportation Used
------------------------------------------------------------------------
Non-
Total Resident resident
------------------------------------------------------------------------
Base.................................... (888) (357) (523)
percent percent percent
Own vehicle............................. 92 94 90
Rented vehicle.......................... 3 1 4
Bus..................................... 3 3 3
Fly..................................... 2 1 3
Into Portland......................... 1 (*) 2
Into Boston........................... 1 (*) 1
Train................................... 1 2 1
------------------------------------------------------------------------
Note: Columns of figures may not add to totals shown due to rounding.
* Less than 0.5%.
9. Experience on Maine Roadways
------------------------------------------------------------------------
Non-
Total Resident resident
------------------------------------------------------------------------
Base.................................... (888) (357) (523)
percent percent percent
Maine Turnpike
Road Conditions:
Good*............................... 65 54 72
Average............................. 11 13 10
Traffic:
Good*............................... 60 48 69
Average............................. 13 16 10
Signage:
Good*............................... 58 49 64
Average............................. 15 17 13
Traffic at Toll Booths:
Good*............................... 57 47 64
Average............................. 12 12 12
Maine's Other Roadways
Road Conditions:
Good*............................... 60 53 64
Average............................. 26 26 26
Traffic:
Good*............................... 63 54 69
Average............................. 25 30 21
Signage:
Good*............................... 60 55 63
Average............................. 26 32 23
------------------------------------------------------------------------
* Those responding to ``very good'' or ``good'' on a five-choice scale.
10. Most Important Factor in Timing of Trip Home
------------------------------------------------------------------------
Non-
Total Resident Resident
------------------------------------------------------------------------
Base:................................... (888) (357) (523)
percent percent percent
Distance to travel...................... 64 51 73
Fatigue................................. 16 25 9
Weather................................. 11 13 10
Traffic................................. 5 4 5
[[Page 56057]]
Other................................... (*) ......... (*)
No answer............................... 5 7 3
------------------------------------------------------------------------
Note: Columns of figures may not add to totals shown due to rounding.
* Less than 0.5%.
11.--How Downhill Ski Trips Are Planned
------------------------------------------------------------------------
Non-
Total Resident resident
------------------------------------------------------------------------
Base.................................... (888) (357) (523)
percent percent percent
Whenever time and finances allow........ 50 55 46
I try to plan a ski vacation each ski
season................................. 36 21 46
I plan day trips several times each ski
season................................. 28 32 25
I do not plan my downhill ski trips..... 9 11 8
No answer............................... 4 6 2
------------------------------------------------------------------------
Note: Multiple responses possible.
12. Pattern of Overnight Ski Trips
------------------------------------------------------------------------
Non-
Total Resident Resident
------------------------------------------------------------------------
Base.................................... (888) (357) (523)
percent percent percent
Start of season-December 24............. 7 8 6
December 25-January 1................... 11 8 13
January 2-February 17................... 16 10 20
February 18-February 26................. 22 12 29
February 27-end of season............... 12 11 12
Every weekend........................... (*) ......... 1
My overnight ski trips do not follow a
pattern................................ 35 39 33
No answer............................... 19 28 13
------------------------------------------------------------------------
Note: Multiple responses possible.
* Less than 0.5%.
13.--Activities Participated In During Trip
------------------------------------------------------------------------
Non-
Total Resident Resident
------------------------------------------------------------------------
Base.................................... (888) (357) (523)
percent percent percent
Relaxing/``quiet time''................. 58 47 64
Fine dining............................. 38 34 41
Nightclub entertainment................. 26 30 23
Fitness activities...................... 23 26 22
Sightseeing............................. 16 12 18
Snowmobiling............................ 7 10 5
Snowshoeing............................. 3 4 2
Skating................................. 2 1 3
Cross-country skiing.................... 2 2 1
Shopping................................ 1 1 1
Other................................... 1 1 1
No answer............................... 16 24 10
------------------------------------------------------------------------
Note: Multiple responses possible.
14.--Type of Lunch
------------------------------------------------------------------------
Non-
Total Resident Resident
------------------------------------------------------------------------
Base.................................... (888) (357) (523)
percent percent percent
Purchase lunch at ski area.............. 44 37 48
Brought a lunch--....................... 52 58 48
From home............................. 34 43 28
[[Page 56058]]
From paid overnight accommodations.... 4 1 6
From non-paid overnight accommodations 6 3 8
From retail establishment............. 6 9 5
Unspecified........................... 1 2 1
No answer............................... 5 5 4
------------------------------------------------------------------------
Note: Columns of figures may not add to totals shown due to rounding.
15. Reason For Bringing Lunch
------------------------------------------------------------------------
Non-
Total Resident Resident
------------------------------------------------------------------------
Base: those who brought lunch........... (461) (237) (225)
percent percent percent
Price................................... 64 60 68
Quality of food......................... 17 16 18
Selection/variety....................... 14 14 12
Didn't want to wait in line............. 11 12 10
No answer............................... 28 31 26
------------------------------------------------------------------------
Note: Multiple responses possible.
16. Where Maine's Skiers Did Ski During 1993-94
------------------------------------------------------------------------
Non-
Total Resident Resident
------------------------------------------------------------------------
Base.................................... (888) (357) (523)
percent percent percent
Maine................................... 72 88 61
Sunday River.......................... 43 48 40
Sugarloaf............................. 37 55 25
Shawnee Peak.......................... 15 24 9
Mt. Abrams............................ 15 27 6
Saddleback............................ 11 20 4
Lost Valley........................... 8 14 3
Other Maine areas..................... 15 29 5
New Hampshire........................... 29 18 36
Vermont............................... 21 12 27
Other New England..................... 6 1 10
Other U.S. destinations............... 10 4 14
Canada destinations................... 1 (*) 2
Other international destinations...... 1 1 1
------------------------------------------------------------------------
Note: Multiple responses possible. Columns of figures may not add to
totals shown due to rounding.
* Less than 0.5%
17. Where Maine's Skiers Did Ski During 1994-1995
------------------------------------------------------------------------
Non-
Total Resident Resident
------------------------------------------------------------------------
Base.................................... (888) (357) (523)
percent percent percent
Maine................................... 100 100 100
Sunday River........................ 64 55 71
Sugarloaf........................... 49 63 40
Shawnee Peak........................ 20 27 15
Mt. Abrams.......................... 14 25 6
Saddleback.......................... 13 24 5
Lost Valley......................... 8 16 3
Camden Snowbowl..................... 6 10 2
Other Maine areas................... 14 26 5
New Hampshire........................... 28 16 36
Vermont................................. 22 15 27
Other New England....................... 7 1 12
Other U.S. destinations................. 10 5 13
Canada destinations..................... 3 2 4
[[Page 56059]]
Other international destinations........ 1 1 (*)
------------------------------------------------------------------------
Note: Multiple responses possible.
Columns of figures may not add to totals shown due to rounding.
* Less than 0.5%
18. Average Number of Days Skied During 1993-1994
------------------------------------------------------------------------
Non-
Total Resident Resident
------------------------------------------------------------------------
Base:*.................................. ........ ......... .........
Maine................................... 16.3 21.5 11.2
Sunday River.......................... 9.8 11.6 8.5
Sugarloaf............................. 9.1 10.7 6.9
Shawnee Peak.......................... 6.1 5.4 7.4
Saddleback............................ 5.5 6.2 3.4
New Hampshire........................... 6.0 4.9 6.4
Vermont................................. 5.2 4.7 4.9
Other................................... 9.3 15.8 8.2
------------------------------------------------------------------------
* Bases vary.
19. Average Number of Days Skied During 1994-1995
------------------------------------------------------------------------
Non-
Total Resident Resident
------------------------------------------------------------------------
Base:*.................................. # # #
Maine................................... 16.6 25.5 10.6
Sugarloaf............................. 12.1 15.3 8.7
Sunday River.......................... 9.0 13.8 6.5
Shawnee Park.......................... 6.6 6.0 7.4
Saddleback............................ 5.9 6.4 4.6
New Hampshire........................... 6.7 3.4 7.6
Vermont................................. 4.9 4.5 5.1
Other................................... 8.4 6.7 8.8
------------------------------------------------------------------------
* Bases vary.
20.--Region of Residence
------------------------------------------------------------------------
Total
------------------------------------------------------------------------
Base......................................................... (888)
percent
United States................................................ 96
New England................................................ 78
Maine.................................................... 40
Massachusetts............................................ 25
New Hampshire............................................ 5
Connecticut.............................................. 4
Rhode Island............................................. 3
Vermont.................................................. *
Middle Atlantic............................................ 6
Other U.S./unspecified..................................... 13
Canada....................................................... 2
Other international........................................ 1
No answer.................................................. 1
------------------------------------------------------------------------
21.--Demographic Profile
------------------------------------------------------------------------
Total
percent
------------------------------------------------------------------------
Base......................................................... (888)
Age:
18-24...................................................... 16
25-34...................................................... 23
35-44...................................................... 36
45-54...................................................... 18
[[Page 56060]]
55-64...................................................... 3
65 and older............................................... 2
No answer.................................................. 2
Mean................................................... 37.1
Gender:
Male....................................................... 54
Female..................................................... 39
No answer.................................................. 7
Annual Household Income:
Less than $30,000.......................................... 15
$30,000-$44,999............................................ 17
$45,000-$60,000............................................ 17
More than $60,000.......................................... 41
No answer.................................................. 9
Mean................................................... $57,600
------------------------------------------------------------------------
Appendixes A-E of the Mt. Washington Valley Task Force Report could
not be reprinted in the Federal Register, however, they may be
inspected in Suite 25, U.S. Department of Justice, Legal Procedures
Unit, 325 7th St., N.W., Washington, D.C. at (202) 514-2481 and at the
Office of the Clerk of the United States Court for the District of
Columbia.
[FR Doc. 96-26995 Filed 10-29-96; 8:45 am]
BILLING CODE 4410-01-C