Well, some great news for Cardrona today, and an early Christmas present!
The Commerce Commission has cleared Cardrona Alpine Resort Limited to acquire either the shares of Treble Cone Investments Limited or the assets it uses to operate the Treble Cone ski field. It’s been a long time coming, but surely was worth the wait.
Clearly the key focus was competition and would it decrease it? And as it turned out, it appears there was more concern maybe around local pass pricing and season passes. Common sense prevailed, and the examples of both Queenstown and Ruapehu should have helped lessen the Comcoms concern that mergers can actually be good in this industry. I think we’ll definitely see this here, with reduced pricing at Treble Cone, and an increase investment. At the end of the day they were satisfied that the acquisition would be unlikely to substantially lessen competition in any relevant market.
Chair of the Commerce Commission Anna Rawlings said “We are satisfied that there is unlikely to be a material difference in the extent to which Treble Cone competes, either with its current ownership structure, or with an alternative owner. We also considered that the high fixed cost nature of ski field operations, and the need to maximise the number of skiers using a ski field would make coordination between the merged entity and other ski fields in the region unlikely”.
So, what’s next? Champagne obviously for the Cardrona team! But then a lot of hard work. Firstly, while this deal has TC shareholder approval and now Comcom approval, our understanding is that they still may need Department of Conservation (DoC) approval to transfer the lease. This might determine the company structure in the short term, as potentially the existing company (while not desirable we’d expect) could operate and hold the lease. And as Cardronas GM, Bridget Legnavsky says “We’re now working with Treble Cone Investments Ltd to complete the transaction and more information will be available in the near future.”
After that, we'd expect little change at Treble Cone in the coming season, there is a ton of planning to be done, and consents possibly needed for snow making extensions etc. But do expect pricing to be released, maybe soon, and we’d expect this to be downwards obviously, definitely the end of $1999 season passes! Will prices be the same as Cardrona and will there be a dual pass? Ultimately probably yes, in the coming season maybe, or maybe not, while they figure out how much the place costs to run. But I’d definitely be expecting operational changes. Cardrona are the masters of service, so expect changes in every operational area, specifically around service levels, and food offerings.
This is good news for Wanaka, and I believe for the industry as resorts better cater for modern snow lovers needs, and by making operations more efficient, maybe helping make snow sports more accessible from a cost perspective.
Oh yep, I just heard a cork pop. Merry Christmas Cardrona!
You can read the somewhat brief ComCom press release here.