Scott N. Miller
smiller@vaildaily.com

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March 13, 2014
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Vail Resorts gains despite Lake Tahoe snow drought

BROOMFIELD, Colo. — We all know the power of snow. Vail Resorts can put that power into numbers.

Company CEO Rob Katz hosted a conference call Tuesday to go over the company’s second quarter performance from Nov. 1 to Jan. 31 of this year. With the exception of the company’s resorts in the Lake Tahoe area, the news was all good.

The news was good enough that Katz announced Vail Resorts would increase its per-share dividend by 100 percent. For stockholders as of April 1 of this year, the new dividend is 41.5 cents per share. That dividend will be payable on April 16.

Driving that announcement was improving performance across the company’s operations, from season passes to real estate sales. For the quarter ending Jan. 31, the company announced a net income of $59.3 million, a 2.1 percent decrease compared to the previous year.

That decrease in income is attributable almost entirely to the historic drought that has hit the California mountains. Snowfall is only about one-quarter what it was the previous season, and visitation at Tahoe has declined by 27 percent.

Katz described real estate sales in the quarter as “strong,” since the company closed on three units at One Ski Hill Place in Breckenridge and five at the Ritz-Carlton Residences in Vail.

Skier visits at Colorado resorts grew 11.9 percent. In lodging, “revenue per available room” increased by more than 12 percent, led by resorts in Colorado and Utah.

Despite the California drought, company chief financial officer Michael Barkin said overall visitation across the company has increased 0.2 percent so far this season.

Given the declines at Tahoe, that means solid gains at the company’s other resorts.

Felicia Hendrix, an analyst with Barclays Capital, asked Katz if the California drought might have lingering effects on visits to Kirkwood, Heavenly and Northstar next season.

Katz said the drought could hit pass sales for Tahoe, but said visitors to the resorts should return if the snow returns.

While the earnings call came after the close of Wednesday’s trading on the New York Stock Exchange, Vail Resorts stock closed at 71.29, up 0.13.

CAPITAL IMPROVEMENTS

Katz also announced that the company would spend roughly $85 million in capital improvements this year, with about $50 million dedicated to maintenance. The company plans to maintain that level of spending into future years, too.

For the first time in several years, there are no big plans for Vail. The capital plan at the company’s flagship resort for 2014 includes on-mountain maintenance and the renovation of 56 rooms at the Lodge at Vail.

Beaver Creek’s Centennial lift will be replaced by a combination lift that includes both chairs and gondola cars. The new lift will increase uphill capacity at Centennial by roughly 30 percent. Katz said the new lift will allow beginners and families to ride to terrain at the top of the mountain.

A new lift is also in the plans for the Colorado Chair at Breckenridge, another project that will increase uphill capacity at the base of Peak 8 by nearly one-third.

Capital spending for this year also includes the renovation and expansion of the on-mountain restaurant at The Canyons resort in Utah.

— Scott Miller is business editor for the Vail Daily, the Sierra Sun’s sister newspaper in Vail, Colo.


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Tahoe Daily Tribune Updated Mar 13, 2014 04:17PM Published Mar 18, 2014 01:23PM Copyright 2014 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.