Radovan Vitek is retiring from the ski resort

The ski season in Crans-Montana is about to begin. Preparations on the Haute-Plateau are in full swing. Craftsmen assemble signposts, restaurant owners work on new menu cards, and the mountain railway workers run the gondolas up the mountain in trial operation.

But otherwise it’s still quiet. Just in time for the start of the season at the beginning of December, the spectacular view of the four-thousanders in the region and the long pistes will again attract many tourists to the village above Sierre.

From luxury destination to general store

But the idyll is deceptive. The once posh holiday destination has seen better days. Crans-Montana used to be considered a premium ski area. One of the last highlights of that time was the hosting of the World Ski Championships in 1987. The event went down in sports history because the Swiss athletes won 14 out of 30 medals.

Today the slopes are spoiled with 12,000 second homes. The apartment blocks in the center of Crans-Montana now make a rather dreary impression in the off-season. A renovation of the aging infrastructure is urgently needed.

In addition, the ski area is struggling to position itself on the market. Today, Crans-Montana is more like a general store than a luxury destination: there are electro festivals and snow parks for the young crowd, golf tournaments for the rich and climbing halls and ice rinks for families.

Faced with all these challenges, 2013 was the right time for rich Czech investor Radovan Vitek. He is the main shareholder of the real estate group CPIPG; he owns real estate in Central and Eastern Europe with a value of 20.9 billion euros. First he bought the Crans-Montana Aminona (CMA) mountain railways and then other service providers such as restaurants, car parks and shops. The result was the CMA Group.

He himself is neither a member of the management nor the board of directors of his real estate companies. In private, too, he is considered reserved and media-shy. What we do know, however, is that the home in Crans-Montana was the lynchpin of the Vitek family for a long time. Perhaps it was the emotional bond that made him invest in the ski resort. Because mountain railways are rarely attractive capital investments.

The Czech billionaire was a beacon of hope for Crans-Montana. The town wanted to use its money to further develop tourism.

But things turned out differently. Vitek may have underestimated Switzerland’s direct-democratic system. In any case, his “he who pays commands” mentality was not well received on the Haute-Plateau. The years of disputes between Vitek and the community have now reached a new high.

In spring, the CMA Group announced that Vitek wanted to withdraw as an investor and that the sale should be completed before the start of the winter season. Now, just before the start of the season, the community is wondering how the mountain railways will continue. Vitek himself does not comment publicly on his possible withdrawal.

The power play has begun

To understand how this situation came about, mayor Nicolas Féraud and tourism director Bruno Huggler recount what has happened since the announcement last spring. Shortly thereafter, a strange list made the rounds in town.

It not only lists the key figures of the CMA operations, but also sales prices for all of the company’s assets. In addition to the mountain railways, this includes parking spaces, restaurants on the slopes, a clinic, a real estate agency, a ski school and a sports shop. Cost of the portfolio: CHF 225 million.

Féraud is sure that this list was deliberately scattered, even if it seems more like a powerpoint presentation with photos than professional sales documentation. The municipalities of Crans-Montana, Lens and Icogne, on whose territory the ski area is located, indicated their interest in buying back the mountain railways, the multi-storey car parks and possibly also the mountain restaurants last year.

So back to the old model, when the municipality operated the mountain railways itself, but failed to develop them further? “Not at all,” replies Féraud, “we would set up an operating company together with a new investor. The municipalities should not be the main owners of the mountain railways. » From his point of view, a railway must be managed economically and not by the public sector.

So Vitek wants to sell and the communities are interested. If it weren’t for the price of 80 million francs just for the mountain railways. In order to check whether the price is realistic, the municipality had the mountain railways appraised by an external, independent company. The determined price is far below 80 million Swiss francs. «The CMA would have to accommodate us. The citizens of our communities would not accept such a high price,” says Féraud.

In the 2020 annual report of Vitek’s company CPIPG, the CMA Group was valued at EUR 67 million. The following year, their value was only estimated at 50 million euros. The company seems to live off its substance. Philippe Magistretti, Chairman of the Board of Directors of the CMA Group and Vice President of Vitek, explains the large difference between the reported value and the targeted sales price with the conservative valuation method of CPIPG.

“Many investors have contacted us who are willing to pay 80 million francs for the mountain railways,” says Magistretti. “We are confident that we can complete the sale before the start of the winter season.” The power play has apparently begun.

Mayor Féraud, however, is not impressed. It is in the interest of the municipality to have more say in the mountain railways again – because of the jobs and in order to further develop the region as a whole. But not at any price. It is questionable whether investors are really queuing up with interest rates rising and a recession looming. The tourism director Huggler says: “The purchase of the mountain railways is not enough. Every ski area needs a continuous renewal of the transport systems. In addition, the Ski World Cup is coming up in 2027.” Additional investments are therefore unavoidable.

Turbulence on the Haute Plateau

It is not the first time that there have been differences between the investor Vitek and the municipalities on the Haute-Plateau. It even went so far that the CMA stopped operating the mountain railways in 2018 despite the best snow conditions because the municipality did not make an allegedly agreed payment to Vitek.

The next scandal was not long in coming. In 2021, the CMA left the Crans-Montana Tourist Association. The reason for this were longstanding disagreements between Magistretti and Jean-Daniel Clivaz, the president of the tourist association. “The strategic plans of the CMA do not match the visions of the tourism association and the community,” says Magistretti. «I do not share the opinion that large-scale investments are necessary for the existing transport systems. But I am definitely in favor of expanding the ski area.”

Since then the situation has deteriorated further. In early 2022, for example, the CMA proposed that the municipalities should lease the Vitek mountain railways in order to have a greater say. At the same time, the CMA parted ways with general director Maxime Fournier over differing views on the direction of the mountain railways.

His successor, Maxime Cottet, was also given a three-week leave of absence at the beginning of November – shortly before the start of the season. “To prepare CMA for the challenges, I asked the CEO to isolate himself from the company for three weeks to work out an action plan,” says Magistretti. “It also gives him the opportunity to reconsider his position in the company.”

In a holiday resort, such turbulence can have devastating consequences. An important success factor of a ski area is the smooth cooperation of mountain railways, municipality, tourist association, hoteliers and other service providers. This requires a common strategy. «For many years we have repeatedly approached the mountain railways with strategic considerations for the entire region. But from the start, the CMA Group has tried to dictate its own vision to us,” says Mayor Féraud.

Smart businessman

Crans-Montana may have failed to recognize that hopeful Vitek is a shrewd businessman who sometimes uses unruly methods. He proved that right from the start when he founded a company in Slovakia after the collapse of the Soviet Union in the early 1990s. This traded in coupons that the government had given to citizens free of charge for the purpose of privatizing state-owned companies.

Vitek then went into the real estate business and specialized in office space and retail space. Last year he bought the Viennese real estate groups Immofinanz and Immo S, increasing his real estate portfolio from 11 to 20.9 billion euros. His company CPIPG operates in the Czech Republic, Germany, Poland and other Central European countries.

The trial surrounding the Luxembourg real estate company Orco (today CPI FIM SA) also caused a stir. Vitek is accused of secretly taking control of the company with the help of straw men. The lawsuit was initially dismissed in the United States. However, the Luxembourg supervisory authority has already fined him 1.5 million euros for market abuse. For the billionaire, that’s a no brainer – just like buying a ski resort. Its involvement in Crans-Montana comprises only 0.5 percent of the CPIPG’s assets.

Vitek is reported to have said that Crans-Montana accounts for less than 2 percent of his wealth but gives him 80 percent of all headaches. Whether an investor will soon appear on the scene who will relieve him of the headache remains to be seen.