Jun 19, 2023 · 1h 3m · capital-allocators
Eric Resnick – Ski, Golf, and Vacation Investing at KSL (EP.322)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Eric Resnick, co-founder and CEO of KSL Capital Partners, joins Ted Seides to explore the macroeconomic trends, operational complexities, and underwriting strategies behind building a $21 billion private equity leader dedicated to travel, recreation, and leisure.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 19.3% of the talking time here. How this is scored →
Ted as informed peer 3.4 Guest teaching 5.1 Guest disagreement 0.0 Ted pushing back 0.1
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:00:16 Pushing back against standard risk mitigation slides
Resnick criticizes industry conventional wisdom where every risk is presumed to have an easy mitigant, stating bluntly that high returns require accepting pure, unmitigated risks.
Hardest push from Ted ▶ 26:37 Pushing on the tension between cost cutting and guest experienceTed presses Resnick on how a firm with an intense cultural legacy of frugality in corporate headquarters avoids compromising the capital-intensive consumer experience at its luxury properties.
Biggest teaching moment ▶ 36:35 Schooling on urban hotel vs. resort ancillary margin breakdownsResnick educates on how generalist hotel owners fail in resorts by ignoring that 60-70% of resort revenues stem from complex operational verticals like spas, F&B, and retail rather than room rates.
Ted holds their own ▶ 49:15 Ted dissects portfolio balance between capital intensity and franchise modelsTed demonstrates institutional asset allocation insight by framing the specific operational and underwriting tension between heavy real estate holdings and asset-light franchise operating businesses.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| From McKinsey Analyst to Vail Resorts Executive | 2 | 4 | 0 | 0 | Ted opens with broad biographical questions about Resnick's entry into the leisure sector. Resnick shares the story of leaving McKinsey for Vail Resorts and receiving early private equity mentorship under Apollo. | |
| Forming KSL Recreation as a KKR Platform | 2 | 4 | 0 | 0 | Ted prompts Resnick on the transition from Vail to partnering with Mike Shannon and KKR. Resnick explains the creation of KSL Recreation as an owner-operator platform and humorously recounts the accidental BlackBerry email that spurred their independence. | |
| Corporate Discipline, Trailer Headquarters, and Culture | 3 | 4 | 0 | 0 | Ted inquires about organizational values and culture. Resnick explains how working out of welded modular trailers for 12 years instilled cost discipline and institutional humility. | |
| The Secular Case for Travel and Leisure Investing | 3 | 6 | 0 | 0 | Ted asks how Resnick conceptualized the leisure opportunity set. Resnick delivers data on travel representing 11% of global GDP and growing at twice the rate of GDP since 1960, outlining the sector's unique hybrid nature. | |
| Elevating the Consumer Experience: La Costa Case Study | 4 | 5 | 0 | 1 | Ted probes on how Resnick enhances the consumer experience and balances frugality with customer amenities. Resnick uses the La Costa turnaround to illustrate wellness and local membership innovations. | |
| Thematic Creation of Alterra Mountain Company and Ikon Pass | 4 | 6 | 0 | 0 | Ted asks about target profile sweet spots and vertical integration. Resnick discusses thematic investing through the creation of Alterra Mountain Company and the Ikon Pass, followed by the 'freezer tour' operational philosophy. | |
| Sponsor Message: Ridgeline AI-Native Investment Technology | 3 | 5 | 0 | 0 | Following a sponsor break, Ted asks about the competitive landscape. Resnick explains how KSL functions as a strategic peer to operators rather than merely a financial sponsor, resulting in two-thirds proprietary deal flow. | |
| Ancillary Revenue Complexity and Leverage Risks | 4 | 6 | 0 | 0 | Ted asks what generalist investors miss in leisure underwriting. Resnick educates on the dangers of over-leveraging cyclical urban corporate hotels versus mastering complex ancillary resort revenue streams. | |
| Recreation Trends: Record Ski Demand and E-Bike Tourism | 3 | 5 | 0 | 0 | Ted asks about emerging recreation trends and how KSL captures them. Resnick explains record post-COVID ski volumes and the rapid emergence of e-bike travel integration across European and resort properties. | |
| Curating Travel Services in an Information-Cluttered World | 4 | 6 | 0 | 0 | Ted explores travel services and membership club strategies. Resnick explains that information clutter makes human and curated concierge services vital for affluent consumers, and discusses de-exclusivizing golf clubs into family lifestyle centers. | |
| Underwriting, Downside Stress-Testing, and Upside Modeling | 4 | 5 | 0 | 0 | Ted asks Resnick how he approaches financial modeling for complex leisure assets. Resnick details underwriting to second standard deviation downside outcomes using historical GFC and COVID stress tests before underwriting upside. | |
| Portfolio Construction and Real Estate vs. Growth Allocations | 5 | 5 | 0 | 0 | Ted frames a nuanced question about allocating capital between capital-intensive real estate and high-velocity franchise/growth assets. Resnick breaks down the two-thirds real estate floor vs. 20-30% growth consumer alpha framework. | |
| Exit Strategy: De-Risking Complex Assets for Passive Buyers | 4 | 5 | 0 | 0 | Ted asks about exit liquidity when holding large specialized assets. Resnick outlines KSL's core playbook: de-risking operational complexity to sell stabilized cash flows to passive institutional buyers like REITs. | |
| Investment Lessons: Trust, Verification, and Charismatic Founders | 3 | 5 | 0 | 0 | Ted concludes with questions on investment losses, macro dislocations, and closing reflections. Resnick reflects on the danger of over-trusting charismatic founders when venturing outside core domain expertise. |
Statements from this episode (33)
Resnick: Travel and leisure accounts for about 11% of global GDP
“It's the third largest sector of the global economy. It's about 11% of global GDP and employment, both.”
Resnick: US travel spending has grown 7% annually since 1960
“Since 1960, travel and leisure spending in the U.S. Has grown by about seven percent per year, more than double that of GDP.”
Resnick: Travel spending will grow at more than double GDP growth
“It's projected to grow more than double that of GDP if you look at over the next decade.”
Resnick: KSL is the largest private travel and leisure investor
“We're one of the only groups that focuses on it at scale. I think we're the largest private investor and travel and leisure businesses in the world.”
Resnick: Just over half of KSL's deals are hotel-related
“About half of our deals, a little bit more, end up being hotel related. The other half tend to be split across all those other segments.”
Resnick: Economy undergoing multi-decade shift from goods to experiences
“We were in the middle of a multi-decade shift of the economy to going from more of a goods-based economy to more of an experiences-based economy.”
Resnick: KSL is roughly 90% focused on leisure over corporate travel
“We tend to focus on the leisure part of the travel business, less so the corporate travel or the urban hotel. We do some of that opportunistically, but we're primarily leisure focused, about 90%.”
Resnick: Higher interest rates create unique buying opportunities in leisure assets
“We think there's a really unique opportunity to combine lower entry points for pricing because higher interest rates mean you can't pay as much for something a day. Yet still have this long-term, very favorable consumer outlook. So to us, it's a really good ti…”
Resnick: Hospitality capex must prioritize guest-facing amenities over the back-of-house
“It's really important to distinguish between what drives the customer experience and what's just cost for cost sake. We don't need to have a fancy back of house, but we need to have really appropriate amenities, the pool, the spa, the gym, the restaurants, and…”
Resnick: KSL vertically integrates real estate ownership and operating management
“We love to invest thematically. So we identify a theme that we believe has legs, and then we like to vertically integrate so we can own both the real estate associated with that theme, as well as an operating capability. So build out a management team that can…”
Resnick on how KSL created the Ikon Pass via massive resort consolidation
“And we had the idea of basically taking what were then, I think, 15 or 16 ski resorts that we had owned, that we bought through five or six different transactions, merged them together, and started with that core at Uculus. And from there, we partnered with an…”
Resnick: Inspecting operational details sets a cultural tone across hospitality businesses
“And coming out of that, what Mike always said was, inspect what you expect. Getting into the weeds like that, I think, while some could certainly say it's overly micromanagement, it set a tone culturally for those details mattered.”
Resnick: Two Thirds of KSL Deal Flow Is Now Proprietary
“And we've gone from about one third of our deal flow being proprietary to now two thirds of our deal flow being proprietary.”
Resnick: Leverage is the enemy of liquidity, where value is created
“Leverage is the enemy of liquidity and liquidity is where value comes from.”
Resnick: Ancillaries drive up to 70% of resort revenue, unlike urban hotels
“Someone who tends to look at urban hotels, 80% plus of the revenue, maybe even 90% is coming from the hotel room rate. You go into the resort world, perhaps 30%, 40% of the revenue is coming from the hotel room rate. All the other revenue comes from everything…”
Resnick: Mismanaging resort retail, dining, and spas can wipe out profit margins
“If you don't really understand the complicated rule set of running a retail shop versus running a hotel, running a restaurant versus running a golf course, running a spa versus running a health club, then what can be a 30% margin business can rapidly become a …”
Resnick: Major hotel chains have shifted from property management to franchising
“The hotel companies themselves have evolved. They started off as hotel owners, like Marriott and Hilton and so forth. First, they were hotel owners. Then they were managing hotels for third parties. Then they really became franchisors. They have wonderfully po…”
Resnick: Tented eco-resorts have an 80% smaller carbon footprint than traditional hotels
“Your carbon footprint is 80% less than what it would be in a traditional hotel, and you're basically living in the middle of nature, but you're not sacrificing a comfortable bed and a shower to do it.”
Resnick: Skiing reached an all-time record season in 2023
“So skiing this year, for example, had its record year by far ever in the history of skiing.”
Resnick: E-bikes will drive a tenfold expansion in multi-day cycling tourism
“The number of people who will do that will expand tenfold as people get more and more comfortable with e-bikes as a form of transportation.”
Resnick: TripAdvisor is not good enough for local travel curation
“TripAdvisor is good. It's not that good. There's still gaps there at the local level,”
Resnick: Private clubs create value through pooled resource access
“When we think of clubs, we think of an opportunity for people with a like-minded interest to come together, and by pooling their resources effectively, they get access to something they couldn't otherwise get access to.”
Resnick: Financial models are 'wrong the moment you start'
“And in doing so, the one thing you know is that you're wrong the moment you start. That's the reality of every model. And we can't take them as gospel because I don't think we've ever hit a model spot on. It's virtually impossible. So it's understanding the im…”
Resnick: KSL stress-tests downside against GFC and COVID before modeling upside
“And now one of the things we look at a lot is, so how did something do during COVID? And before COVID, it was how did things do during the GFC? And we still have access to that data typically. So we've stress tested this industry incredibly significantly in th…”
Resnick: KSL targets at least two-thirds real-estate-intensive businesses
“Generally speaking, we want two-thirds or more of our businesses to be real estate intensive.”
Resnick: KSL allocates 20% to 30% to growthy consumer businesses
“And then you balance that with say, 20 or 30% of the portfolio That has more of a growthy consumer profile that may be less capital intensive, but that adds some extra alpha too. But there's probably a bigger range of investment outcomes.”
Resnick: Tight Debt Markets Benefit Scaled Private Equity Firms Over Competitors
“When banks have to tighten up on their lending requirements and reduce their balance sheets to our sector, we're going to be at or near the top of the list of who they're going to lend to. And I think that's a logical reaction for banks to have to tighten in a…”
Resnick: Stabilizing Complex Assets Unlocks Passive Buyers for Private Equity Exits
“Fundamentally, if we can take a complicated asset, if we can simplify that, stabilize it from a structural perspective, from a physical perspective, upgrade the asset, make sure it's in great condition, Really show the market what it can be. What we do is we o…”
Resnick: Frontline operational empowerment produces the best long-term business outcomes
“While very inefficient to empower all your people to make individual decisions, because at times you can feel it's like a box of chocolates. You don't know what you're going to get all the time. That leads to the best long-term outcomes.”
Resnick: KSL has lost money on only two investments out of hundreds
“We've lost money twice. Across however many hundreds of investments we've made.”
Resnick on why KSL's only two investment losses involved charismatic founders
“The two times we've lost money, if you can create a theme, I would say is we had a very charismatic seller slash founder of a business that was staying involved, and it was a business that we didn't have as much domain expertise in going into it.”