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Winter skiing industry sees good times—but only out West

"What we're hearing is that people are making the trip out west because there's simply no place to ski in the east," says an analyst.

After several years of drought conditions, ski resorts out West enjoyed a thriving business over the holidays, fueled by an abundance of snowfall, ideal temperatures and pent-up demand.

Fresh powder snow at ski resort last week in N. Lake Tahoe, CA
Source: Squaw Valley Alpine Meadows
Fresh powder snow at ski resort last week in N. Lake Tahoe, CA

"This year's holiday period was really strong," said Kevin Somes, general manager of Snow Valley, located in the San Bernardino Mountains outside of Los Angeles. "We have a lot of people who probably haven't taken their skis or snowboards out of their storage or closet for a couple of years."

For the East Coast, it was another story, however, as winter's late start put a damper on the usual holiday crowds and left some resorts with cancellations. Trails in some New England resorts were closed just before Christmas due to milder-than-normal weather, and there were slopes in Pennsylvania that were closed over the New Year's holiday weekend as crews worked snow-making equipment.

"We've clearly had a good pattern of stormy weather out West — and that's not only helped drive location visitations for those resorts, but bookings for the holiday season and people kind of waiting until the last minute to make decisions to go out to those places," said Scott Hamann, an analyst at KeyBanc Capital Markets.

"Although we got a cold snap in the East just this past week or so," Hamann said, "what we're hearing is that people are making the trip out west because there's simply no place to ski in the East."

East Coast skiing enthusiasts may have headed to the slopes of Colorado over the holidays.

"We might have benefited from the conditions on the East Coast," said Jeff Hanle, a spokesman for Aspen Skiing, which operates four Colorado ski areas — Snowmass, Aspen Mountain, Aspen Highlands and Buttermilk. "We had a great holiday period. It exceeded expectations, and we were just about at capacity."

Meteorologists with the National Weather Service say a series of El Nino storms is forecast to hit California this week with the potential to bring another 1 to 2 feet of snowfall to the mountains and resorts.

Fresh powder snow at ski resort last week in N. Lake Tahoe, CA
Source: Squaw Valley Alpine Meadows
Fresh powder snow at ski resort last week in N. Lake Tahoe, CA

In Squaw Valley-Alpine Meadows, a ski resort in North Lake Tahoe, California, snowfall is already at 17 feet for the season, according to resort spokesman Michael Radlick. "We've had a phenomenal start to the season," he said, adding that the resort achieved "record visitor numbers over the two-week Christmas holiday season."

"We've had several maxed-out days when we'll run out of rental equipment," said Mike Pierce, director of marketing at Mt. Rose Ski Tahoe, located 30 miles south of Reno, Nevada. "Our destination business is up from what it normally is."

For Vail Resorts, Tahoe's heavy snowfall comes as a relief after poor ski conditions in the region last season caused the company to lower guidance in March 2015. "We are 151 percent of normal snowfall," said corporate spokesman Russ Pecoraro. "I'd say El Nino has definitely delivered to date. And it looks like it's set up to continue to deliver great snow throughout the season."

In addition to three resorts in the Tahoe area, Vail Resorts operates major resorts in Colorado and Utah along with two properties in the Midwest. Pecoraro said the company's Mount Brighton resort in Michigan just opened a few days ago. "It has been a slow start to the season out there, but they are now up and running," he said.

KeyBanc's Hamann has an "overweight" rating on Vail Resorts and Intrawest Resorts Holdings. "Vail is the one that could benefit the most from what we're seeing. They have a lot of exposure to Colorado. They have a lot of capital that they've put into Park City, Utah, in the last couple of years, and they're getting good snow."

Macquarie Research analyst Matthew Brooks said in a research note published Monday that Vail Resorts is the firm's top pick among the three listed mountain resort stocks. "With the good start to the season in California, we see potential for earnings upgrades at Vail. We also like Intrawest, although strength at their Colorado resorts may be offset by weakness elsewhere."

Brooks said the best snowfalls for Intrawest have been in its Colorado business. "Their other ski resorts have seen less snow, although the Canadian resorts tend to see the most snow in January."