And while the number of skiers isn't likely to grow much, they tend to be high-income individuals. BofA Merill Lynch points out that the ski industry often serves households with incomes above $100,000. At some high-end resorts, household incomes can average $250,000 or more, according to a research note for investors.
That dynamic should help Intrawest increase ticket prices further over time without much resistance from customers. While Intrawest operates resorts in some of the most desirable locations across North America, its ticket prices are lower than those of major rivals. Intrawest's effective ticket price is $45.92 per skier per day, compared with $56.02 for Vail Resorts and $51.65 for Whistler-Blackcomb, according to BofA Merrill Lynch.
Narrowing the gap with rivals by a few dollars doesn't appear all that difficult given the overall cost of a ski trip. Including airfare to states like Colorado and often-expensive lodging, lift tickets can essentially be a drop in the bucket. And while Intrawest probably won't match Vail, the latter will likely continue raising prices, allowing both to benefit, analysts say.
Wanted: America's next winter sports superstar
While normal ski resorts account for the majority of Intrawest's business, the company's ultra-high-end helicopter skiing group contributes about a fifth of operating income. The business, called Canadian Mountain Holidays, runs the largest heli-skiing operation in North America, including a fleet of 40 helicopters.
Heli-skiing offers a couple of big benefits to Intrawest. First, heli-skiers tend to care even less about prices given their high incomes and dedication to the sport. The group also has a booking window that runs one to two years in advance, creating unusual clarity on future skiing revenue, according to Joel Simkins, an analyst at Credit Suisse. And Intrawest has scope to expand on its roughly 40 percent share of the Canadian heli-skiing business, given its access to capital and specialization, Simkins said.
There's no denying that any ski business is vulnerable to weather conditions during its short operating window, which is essentially a few months a year. That concern will probably keep a limit on valuations for most any resort operator over the medium term.
Intrawest didn't immediately respond to a request from comment.
Yet after its weak share performance in the last few months, Intrawest is one of the cheapest stocks in the leisure sector. The company's enterprise value is just 8.5 times consensus earnings before interest, taxes, depreciation and amortization for the year through June 2015. Accounting for the company's land bank, which has a book value of $153 million, the multiple drops to just 7.2 times. Come next winter, it may be too late to snag such a deal.