Podcast #163: Red Mountain CEO & Chairman Howard Katkov

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You can also subscribe to the free tier below: Who Howard Katkov, Chairman and CEO of Red Mountain Resort , British Columbia Recorded on Feb. 8, 2024 About Red Mountain Click here for a mountain stats overview Owned by: Red Mountain Ventures Located in: Rossland, British Columbia, Canada Year founded: 1947 (beginning of chairlift service) Pass affiliations: * Ikon Pass: 7 days, no blackouts * Ikon Base Pass and Ikon Base Pass Plus: 5 days, holiday blackouts * Lake Louise Pass (described below) Closest neighboring ski areas: Salmo (:58), Whitewater (1:22), Phoenix Mountain (1:33), 49 Degrees North (1:53) Base elevation: 3,887 feet/1,185 meters Summit elevation: 6,807 feet/2,075 meters Vertical drop: 2,919 feet/890 meters Skiable Acres: 3,850 Average annual snowfall: 300 inches/760 cm Trail count: 119 (17% beginner, 34% intermediate, 23% advanced, 26% expert) Lift count: 8 (2 fixed-grip quads, 3 triples, 1 double, 1 T-bar, 1 carpet) View historic Red Mountain trailmaps on skimap.org . Here are some cool video overviews: Granite Mountain: Red Mountain: Grey Mountain: Rossland: Why I interviewed him It’s never made sense to me, this psychological dividing line between Canada and America. I grew up in central Michigan, in a small town closer to Canada (the bridge between Sarnia and Port Huron stood 142 miles away), than the closest neighboring state (Toledo, Ohio, sat 175 miles south). Yet, I never crossed into Canada until I was 19, by which time I had visited roughly 40 U.S. states. Even then, the place felt more foreign than it should, with its aggressive border guards, pizza at McDonald’s, and colored currency. Canada on a map looks easy, but Canada in reality is a bit harder, eh? Red sits just five miles, as the crow flies, north of the U.S. border. If by some fluke of history the mountain were part of Washington, it would be the state’s greatest ski area, larger than Crystal and Stevens Pass combined. In fact, it would be the seventh-largest ski area in the country, larger than Mammoth or Snowmass, smaller only than Park City, Palisades, Big Sky, Vail, Heavenly, and Bachelor. But, somehow, the international border acts as a sort of invisibility shield, and skiing Red is a much different experience than visiting any of those giants, with their dense networks of high-speed lifts and destination crowds (well, less so at Bachelor). Sure, Red is an Ikon Pass mountain, and has been for years , but it is not synonymous with the pass, like Jackson or Aspen or Alta-Snowbird. But U.S. skiers – at least those outside of the Pacific Northwest – see Red listed on the Ikon menu and glaze past it like the soda machine at an open bar. It just doesn’t seem relevant. Which is weird and probably won’t last. And right now Shoosh Emoji Bro is losing his goddamn mind and cursing me for using my platform focused on lift-served snowskiing to hype one of the best and most interesting and most underrated lift-served snowskiing operations in North America. But that’s why this whole deal exists, Brah. Because most people ski at the same 20 places and I really think skiing as an idea and as an experience and as a sustainable enterprise will be much better off if we start spreading people out a bit more. What we talked about Red pow days; why Red amped up shuttle service between the ski area and Rossland and made it free; old-school Tahoe; “it is the most interesting mountain I’ve ever skied”; buying a ski area when you’ve never worked at a ski area; why the real-estate crash didn’t bury Red like some other ski areas; why Katkov backed away from a golf course that he spent a year and a half planning at Red; why the 900 lockers at the dead center of the base area aren’t going anywhere; housing and cost of living in Rossland; “we look at our neighborhood as an extension of our community of Rossland”; base area development plans; balancing parking with people; why and how Red Mountain still sells affordable ski-in, ski-out real estate; “our ethos is to be accessible for everybody”; whether we could ever see a lift from Rossland to Red; why Red conducted a crowd-funding ownership campaign and what they did with the money; Red’s newest ownership partners; the importance of independence; “the reality is that the pass, whether it’s the Epic or the Ikon Pass, has radically changed the way that consumers experience skiing”; why Red joined the Ikon Pass and why it’s been good for the mountain; the Mountain Collective; why Red has no high-speed lifts and whether we could ever see one; no stress on a powder day; Red’s next logical lift upgrades; potential lift-served expansions onto Kirkup, White Wolf, and Mt. Roberts; and the Powder Highway. Why I thought that now was a good time for this interview My full-scale assault of Canada, planned for 2023, has turned into more of an old-person’s bus tour. I’m stopping at all the big sites, but I sure am taking my time, and I’m not certain that I’m really getting the full experience. Part of this echoes the realization centuries’ of armies have had when invading Russia: damn this place is big. I’d hoped to quickly fold the whole country into the newsletter, as I’d been able to do with the Midwest and West when I expanded The Storm’s coverage out of the Northeast in 2021. But I’d grown up in the Midwest and been skiing the West annually for decades. I’d underestimated how much that had mattered. I’d skied a bit in Canada, but not consistently enough to kick the door down in the manner I’d hoped. I started counting ski areas in Quebec and stopped when I got to 4,000*, 95 percent of which were named “Mont [some French word with numerous squiggly marks above the letters].” The measurements are different. The money is different. The language, in Quebec, is different. I needed to slow down. So I’m starting with western Canada. Well, I started there last year, when I hosted the leaders of SkiBig3 and Sun Peaks on the podcast. This is the easiest Canadian region for a U.S. American to grasp: Epic, Ikon, Mountain Collective, and Indy Pass penetration is deep, especially in British Columbia. Powdr, Boyne, Vail, and Pacific Group Resorts all own ski areas in the province. There is no language barrier. So, Red today, Panorama next month, Whistler in June. That’s the way the podcast calendar sets up now, anyway. I’ll move east as I’m able. But Red, in particular, has always fascinated me. If you’re wondering what the largest ski area in North America is that has yet to install a high-speed lift, this is your answer. For many of you, that may be a deal-breaker. But I see a time-machine, an opportunity to experience a different sort of skiing, but with modern gear. Like if aliens were to land on today’s Earth with their teleportation devices and language-translation brain chips and standard-issue post-industro-materialist silver onesies. Like wow look how much easier the past is when you bring the future with you. Someday, Red will probably build a high-speed lift or two or four, and enough skiers who are burned out on I-70 and LCC but refuse to give up their Ikon Passes will look north and say, “oh my, what’s this all about?” And Red will become some version of Jackson Hole or Big Sky or Whistler, beefy but also busy, remote but also accessible. But I wanted to capture Red, as it is today, before it goes away. *Just kidding, there are actually 12,000.^ ^OK, OK, there are like 90. Or 90,000. Why you should ski Red Mountain Let’s say you’ve had an Ikon Pass for the past five or six ski seasons. You’ve run through the Colorado circuit, navigated the Utah canyons, circled Lake Tahoe. The mountains are big, but so are the crowds. The Ikon Pass, for a moment, was a cool little hack, like having an iPhone in 2008. But then everyone got them, and now the world seems terrible because of it. But let’s examine ye ‘ole Ikon partner chart more closely, to see what else may be on offer: What’s this whole “Canada” section about? Perhaps, during the pandemic, you resigned yourself to U.S. American travel. Perhaps you don’t have a passport. Perhaps converting centimeters to inches ignites a cocktail of panic and confusion in your brain. But all of these are solvable dilemmas. Take a deeper look at Canada. In particular, take a deeper look at Red. Those stats are in American. Meaning this is a ski area bigger than Mammoth, taller than Palisades, snowy as Aspen. And it’s just one stop on a stacked Ikon BC roster that also includes Sun Peaks (Canada’s second-largest ski area), Revelstoke (the nation’s tallest by vertical drop), and Panorama. We are not so many years removed from the age of slow-lift, empty American icons. Alta’s first high-speed lift didn’t arrive until 1999 (they now have four). Big Sky’s tin-can tram showed up in 1995. A 1994 Skiing magazine article described the then-Squaw Valley side of what is now Palisades Tahoe as a pokey and remote fantasyland: …bottomless steeps, vast acreage, 33 lifts and no waiting. America’s answer to the wide-open ski circuses of Europe. After all these years the mountain is still uncrowded, except on weekends when people pile in from the San Francisco Bay area in droves. Squaw is unflashy, underbuilt, and seems entirely indifferent to success. The opposite of what you would expect one of America’s premier resorts to be. Well that’s cute. And it’s all gone now. America still holds its secrets, vast, affordable fixed-grip ski areas such as Lost Trail and Discovery and Silver Mountain. But none of them have joined the Ikon Pass, and none gives you the scale of Red, this glorious backwater with fixed-grip lifts that rise 2,400 vertical feet to untracked terrain. Maybe it will stay like this forever, but it probably won’t. So go there now. Podcast Notes On Red’s masterplan Red’s masterplan outlines potential lift-served expansions onto Kirkup, White Wolf, and Mount Roberts. We discuss the feasibility of each. Here’s what the mountain could look like at full build-out: On Jane Cosmetics An important part of Katkov’s backstory is his role as founder of Jane cosmetics, a ‘90s bargain brand popular with teenagers. He built the company into a smash success and sold it to Estée Lauder, who promptly tanked it. Per Can’t Hardly Dress : Lauder purchased the company in 1997. Jane was a big deal for Lauder because it was the company’s first mass market drugstore brand. Up until that point, Lauder only owned prestige brands like MAC, Clinique, Jo Malone and more . Jane was a revolutionary move for the company and a quick way to enter the drugstore mass market. Lauder had no clue what do with Jane and sales plummeted from $50 million to $25 million by 2004. Several successive sales and relaunches also failed, and, according to the article above, “As it stands today, the brand is dunzo. Leaving behind a default Shopify site, an Instagram unupdated for 213 weeks and a Facebook last touched three years ago.” On Win Smith and Sugarbush Katkov’s story shares parallels with that of Win Smith, the Wall-Streeter-turned-resort-operator who nurtured Sugarbush between its days as part of the American Skiing Company shipwreck and its 2019 purchase by Alterra . Smith joined me on the podcast four years ago, post-Alterra sale, to share the whole story. On housing in Banff and Sun Peaks Canadian mountain towns are not, in general, backed up against the same cliff as their American counterparts. This is mostly the result of more deliberate regional planning policies that either regulate who’s allowed to live where, or allow for smart growth over time (meaning they can build things without 500 lawsuits). I discussed the former model with SkiBig3 (Banff) President Pete Woods here , and the latter with Sun Peaks GM Darcy Alexander here . U.S. Americans could learn a lot from looking north. On not being able to buy slopeside real estate in Oregon, Washington, or California The Pacific Northwest is an extremely weird ski region. The resorts are big and snowy, but unless you live there, you’ve probably never visited any of them. As I wrote a few weeks back : Last week, Peak Rankings analyzed the matrix of factors that prevent Oregon and Washington ski areas, despite their impressive acreage and snowfall stats, from becoming destination resorts. While the article suggests the mountains’ proximity to cities, lousy weather, and difficult access roads as blockers, just about every prominent ski area in America fights some combination of these circumstances. The article’s most compelling argument is that, with few exceptions, there’s really nowhere to stay on most of the mountains. I’ve written about this a number of times myself, with this important addendum: There’s nowhere to stay on most of the mountains, and no possibility of building anything anytime soon . The reasons for this are many and varied, but can be summarized in this way: U.S. Americans, in thrall to an environmental vision that prizes pure wilderness over development of any kind, have rejected the notion that building dense, human-scaled, walkable mountainside communities would benefit the environment far more than making everyone drive to skiing every single day. Nowhere has this posture taken hold more thoroughly than in the Pacific Northwest. Snowy and expansive British Columbia, perhaps sensing a business opportunity, has done the opposite, streamlining ski resort development through a set of policies known as the B.C. Commercial Alpine Ski Policy. As a result, ski areas in the province have rapidly expanded over the past 30 years… California is a very different market, with plenty of legacy slopeside development. It tends to be expensive, however, as building anything new requires a United Nations treaty, an act of Jesus, and a total eclipse of the sun in late summer of a Leap Year. Perhaps 2024 will be it. On “Fight The Man, Own the Mountain” Red ran a crowd-funding campaign a few years back called “Fight the Man, Own the Mountain.” We discuss this on the pod, but here is a bit more context from a letter Katkov wrote on the subject: Investing in RED means investing in history, independence, and in this growing family that shares the same importance on lifestyle and culture. RED is the oldest ski resort in Western Canada and it has always been fiercely independent. There are not many, if any ski resorts left in North America like Red and the success of our campaign demonstrates a desire by so many of you to, help, in a small way, to protect the lifestyle, soul and ski culture that emanates from Red. RED is a place I’ve been beyond proud to co-own and captain since 2004 and the door is still open to share that feeling and be a part of our family. But please note that despite the friendly atmosphere, this is one of the Top 20 resorts in North America in terms of terrain. The snow’s unreal and the people around here are some of the coolest, most down-to-earth folks you’re ever likely to meet. (Trying to keep up with them on the hill is another thing entirely…) With $2 million so far already committed and invested, we wasted no time acting on promised improvements. These upgrades included a full remodel of fan favorite Paradise Lodge (incl. flush toilets!) as well as the expansion of RED’s retail and High Performance centres. This summer we’ll see the construction of overnight on-mountain cabins and the investor clubhouse (friends welcome!) as well as continued parking expansion. We’ve heard from a number of early investors that they were beyond stoked to enjoy the new Paradise Lodge so soon after clicking the BUY button. Hey, ownership has its privileges… On the Lake Louise Pass Katkov mentions the “Lake Louise Pass,” which Red participates in, along with Castle Mountain and Panorama. He’s referring to the Lake Louise Plus Card , which costs $134 Canadian up front. Skiers then get their first, fourth, and seventh days free, and 20 percent off lift tickets for each additional visit. While these sorts of discount cards have been diminished by Epkon domination, versions of them still provide good value across the continent. The Colorado Gems Card , Smugglers’ Notch’s Bash Badge , and ORDA’s frequent skier cards are all solid options for skiers looking to dodge the megapass circus. On the Powder Highway Red is the closest stop on the Powder Highway to U.S. America. This is what the Powder Highway is: And here’s the circuit: Fairmont is just a little guy, but Kicking Horse, Kimberley, and Fernie are Epic Pass partners owned by Resorts of the Canadian Rockies, and Revy, Red, and Panorama are all on Ikon. Whitewater used to be on M.A.X. Pass, but is now pass-less. Just to the west of this resort cluster sits Big White (Indy), Silver Star (Ikon), and Sun Peaks (Ikon). To their east is Sunshine, Lake Louise, Norquay (all Ikon), and Castle (Indy). There are also Cat and heli-ski operations all over the place. You could lose a winter here pretty easily. On Katkov’s business background In this episode of the Fident Capital Podcast, Katkov goes in-depth on his business philosophy and management style. Here’s another: On bringing the city to the mountains While this notion, rashly interpreted, could summon ghastly visions of Aspen-esque infestations of Fendi stores in downtown Rossland, it really just means building things other than slopeside mansions with 19 kitchens and a butler’s wing. From a 2023 resort press release : Red Development Company, the real estate division of RED Mountain Resort (RED), in conjunction with ACE Project Marketing Group (ACE), recently reported the sell-out of the resort's latest real estate offering during the season opening of the slopes. On offer was The Crescent at RED, a collection of 102 homes, ranging from studio to one bedrooms and lofts featuring a prime ski in – ski out location. Howard Katkov, CEO of RED, and Don Thompson, RED President, first conceived of bringing the smaller urban living model to the alpine slopes in January 2021. ACE coined the concept as "everything you need and nothing you don't" … An important component was ensuring that the price point for The Crescent was accessible to locals and those who know and love the destination. With prices starting mid $300s – an excellent price when converted to USD – and with an achievable 5% deposit down, The Crescent at RED was easily one of the best value propositions in real estate for one of the best ranked ski resorts in North America. Not surprisingly, over 50% of the Crescent buyers were from the United States, spurred on by the extraordinary lifestyle and value offered by The Crescent, but also the new sparsity of Canadian property available to foreign buyers. As a good U.S. American, I ask Katkov why he didn’t simply price these units for the one-percenters, and how he managed the House-Flipping Henries who would surely interpret these prices as opportunity. His answers might surprise you, and may give you hope that a different sort of ski town is possible. The Storm publishes year-round, and guarantees 100 articles per year. This is article 15/100 in 2024, and number 515 since launching on Oct. 13, 2019. Get full access to The Storm Skiing Journal and Podcast at www.stormskiing.com/subscribe