In the two short years since taking the helm at Vail Resorts Inc., chief executive Rob Katz hasn’t shied away from making bold and sometimes controversial changes at the ski-resort operator.
Katz, 41, made headlines and shocked many in the ski industry late last month when he pulled the company’s membership in the trade group representing the state’s ski areas, taking with him a huge share of its membership dues and the clout of some of Colorado’s busiest resorts.
Early in his tenure, he uprooted the company from its Avon home, moving it downhill to Broomfield. Over the same period, Katz has increased Vail Resorts’ holdings in the lodging sector, seen its stock hit a historic high, introduced several environmental initiatives and debuted the latest season-pass product, the Epic Pass.
Such moves have engendered praise and criticism.
Analysts and associates describe him as sharp, smart, innovative and aware. They say his ability to both be detail-oriented and manage the big picture has created success for the company.
Others say he is inexperienced in the ski industry and is simply a Wall Street suit focused on driving up the share price. His decision to pull Vail Resorts’ membership in Colorado Ski Country USA has heightened the tone of such criticism, prompting some industry insiders to say that Katz is turning Vail Resorts — which owns Vail, Beaver Creek, Breckenridge and Keystone — into a monopoly that doesn’t play well with others.
Katz says his commitment is to drive financial results and to do so in an environmentally responsible way.
He said Vail has the utmost respect for Colorado Ski Country, but he wanted to see the group focus more on lobbying than marketing. “We felt that the Colorado Tourism Office and their efforts should be the primary point of contact for consumers looking to come to Colorado,” he said.
It isn’t his job, analysts and supporters say, to please the rest of the industry.
“I’m sure it was a painful decision for him because he does care about relationships and the reactions,” said lawyer Tom Strickland, a two-time U.S. Senate candidate who is a mentor, friend and legal consultant to Katz. “But, most importantly, he is looking out for the shareholders of Vail Resorts.”
A letter to Katz from the Colorado Ski Country executive committee details the group’s efforts to comply with his requests for deep cost-cutting measures. According to the letter, the group convened a series of meetings and trimmed its budget from $3.6 million to $2.8 million by cutting back on various marketing efforts.
Pullout “unfortunate”
According to the letter, dated May 22, Katz continued to push for cuts.
“Vail wanted to shrink the organization so drastically that all of us agreed that it was worse for the state of skiing in Colorado to shrink Ski Country to the level they wanted than to have Vail Resorts pull out of the organization,” said Dave Bellack, vice chairman of Colorado Ski Country and senior vice president of Aspen Skiing Co.
Nonetheless, Bellack described Vail’s withdrawal as “negative for the ski industry in Colorado and bad for all the member resorts.”
Rob Perlman, outgoing president of Colorado Ski Country, refused to comment about Katz, e-mailing only a statement in which he described Vail Resorts’ move as “unfortunate.”
“He is very focused on increasing shareholder value; that is his job as a CEO,” Will Marks, an analyst at JMP Securities in San Francisco, said of Katz. “The direction he takes is not always going to please everyone.”
Katz, who worked on Wall Street for 14 years, moved his family to Colorado after 9/11 because he and his wife did not want to raise their sons in New York. At that time, he was an executive with Apollo Management, a Wall Street firm that held a stake in Vail Resorts. He continued as a consultant to Apollo and as a board member of Vail Resorts. He became chief executive in 2006.
“What Rob brought to the business world was a combination of intellect and judgment and the ability to basically play at the highest levels of business very quickly,” Strickland said.
Marks, who has been following Vail Resorts for six years, credits Katz for cutting costs by moving the company from Avon to Broomfield; for focusing on and growing the lodging business through RockResorts without investing too much capital; and for not rushing into any ski-resort or hotel acquisitions.
In an industry once dominated by local skier-owners, the switch to corporate ownership has been a struggle.
“His limited experience with being on the board with Apollo may qualify him for some experience, but he’s never run a ski resort in his life or a hotel in his life,” said former ski executive Jerry Jones of JD Jones & Associates.
Slowdown fears affect stock
Jones and Katz have a long history of going head to head on industry issues, and they are not on friendly terms.
“What he has done is separated Vail Resorts from the ski industry and made it just another typical public company,” Jones said.
But Jones admits that Katz is “probably the best possible CEO for Vail Resorts’ stock that they could have.”
Under Katz’s watch, Vail’s stock climbed to a peak of $65 a share before settling back to $44, a decline analysts say is due to concerns about a slowdown in leisure travel.
Strickland met Katz 13 years ago, when Katz was a fledgling at Apollo and Strickland was doing legal work for the firm.
He called Katz “an exacting client.”
“You always want to be prepared for Rob. He would ask the hardest, toughest questions, and he’d know in an instant if you weren’t doing your job.”
Elizabeth Aguilera: 303-954-1372 or eaguilera@denverpost.com
Robert Katz
Chief executive, Vail Resorts Inc.
Age: 41
Born: New Rochelle, N.Y.
College: University of Pennsylvania, 1988
Career: Katz was one of thousands laid off from Drexel Burnham Lambert Inc., the firm led by junk-bond king Michael Milken, in 1990 when the company declared bankruptcy.
He went on to become a senior partner at Apollo Management, the New York buyout firm that owned a controlling stake in Vail Resorts from 1990 to 2002. He has been on the Vail Resorts board since 1996.
He became CEO of Vail Resorts in late February 2006 and is a director of the Vail Valley Foundation.
Family: Wife, Elana Amsterdam, and sons Jacob, 9, and Ethan, 8.
Admires: Whole Foods and “Good to Great” author Jim Collins.
Drives: Lexus hybrid (sedan)
