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ASC contracts with MeriStar

Failed merger partner to oversee Steamboat Grand

— The planned merger between American Skiing Co. and MeriStar Hotels and Resorts was withdrawn in March. But the two companies have decided to work together anyway.

American Skiing, parent of the Steamboat Ski Area, announced Tuesday it had assigned a management consulting contract with MeriStar to oversee operations of its lodging properties. American Skiing will continue to own the properties and its reservations networks. The hotel and condominium managers and staff will continue as employees of American Skiing Co. resorts.

The announcement comes five months after a merger between the two companies fell apart, due largely to a lack of encouragement from Wall Street. Former ASC chairman Les Otten announced the intent to merge in December 2000. He resigned his post five days after the merger was withdrawn.



The timing of the announcement also comes as ASC is hoping to identify a buyer for the Steamboat Ski Area. Company officials have said the sale of Steamboat might or might not include the Steamboat Grand Hotel.

Steamboat Grand Manager Terry Murphy said it’s difficult to predict at this point what this might mean for his hotel.



“In the event the Grand is not sold and stays within the realm of American Skiing Co., the relationship with MeriStar would continue in Steamboat,” Murphy said. “We’d have the opportunity to have a professional hotel management company help support the hotel.”

Murphy worked closely with MeriStar officials for four months while the merger was pending. He said was looking forward to the relationship then and would look forward to a future relationship, albeit of a different nature, if things work out that way.

Depending upon whom the buyer of the ski area is, if they also purchased the hotel, they might choose to piggyback on the MeriStar relationship, Murphy theorized. But he said he wouldn’t really know anything until the prospective buyer of the ski area is announced, perhaps in September, and the terms of the deal are revealed.

MeriStar claims to be the nation’s largest independent hotel management company. It has contracts to manage hotels bearing a wide variety of flags all over the country.

Most of the MeriStar-managed hotels are in warm-weather climates, and Otten hoped the merger would offer American Skiing a more consistent source of year-round revenue that wasn’t as dependent upon the weather as ASC’s ski resort hotels.

American Skiing doesn’t stand to gain new revenue streams as a result of its agreement to consult with MeriStar.

However, CEO B.J. Fair said his company’s resort would benefit from the installation of MeriStar’s controls and procedures at its eight Grand Summit Resort Hotels.

“MeriStar has an outstanding approach to hotel and resort lodging operations,” Fair said in a prepared statement. “This arrangement reflects our commitment to ensuring we can deliver the highest quality experience and services to our guest.”

Had the merger between American Skiing and MeriStar been consummated, the new company, Doral International, would have owned or managed nine ski resorts, 23 resort hotels, 246 other hotels, 15 golf course and four conference facilities.

American Skiing plans to sell Steamboat as part of a financial reorganization intended to alleviate the company’s stifling debt load.


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