Vail Resorts reports strong third-quarter results
A combination of favorable weather and a robust spring pass sales season contributed to a solid third quarter for Vail Resorts. That quarter in the company’s fiscal year ends April 30 and includes the final months of the ski season.
In a conference call with market analysts earlier this month, Vail Resorts President and CEO Rob Katz said the company is “pleased” with the results from both the third quarter and the season as a whole.
Katz said the company saw strong visitation from both local and destination guests, posting increases in both skier visitation and lift revenue.
But, Katz said, much of that growth came from the company’s acquisitions of Triple Peaks Resorts — Crested Butte in Colorado, Mount Sunapee in New Hampshire and Okemo Mountain in Vermont — as well as Stevens Pass in Washington.
Vail Resorts — which operates Northstar California, Heavenly Mountain Resort and Kirkwood Mountain Resort — doesn’t release skier numbers for individual resorts. Overall, the company reported a 14.3% increase in visitation.
That growth helped offset what Katz called “relative weakness” in international visits, particularly at Whistler Blackcomb in British Columbia.
A good snow year across most of the company’s network of resorts, along with what Katz called increasingly sophisticated direct marketing efforts, have boosted early pass sales for the coming ski season.
Katz said North American pass sales increased 9% from the same period in fiscal 2018. Revenue from those sales increased 13%.
The company has also seen strong growth in its Epic Pass sales in Australia. The company has for several years owned the Perisher resort and earlier this year acquired the Falls Creek and Hotham ski resorts there. The company also has partnerships with the Japanese resorts of Rusutsu and Hakuba Valley.
The company also saw strong growth in its lodging segment. But Chief Financial Officer Michael Barkin said the average daily rate at the company’s lodging properties declined, primarily due to the Triple Peak and Stevens Pass acquisitions.
Vail Resorts adds new pass products just about every season. Chris Woronka, an analyst with Deutsche Bank, asked Katz about the impact of the company’s Epic Military Pass. That pass provides discounted skiing for active-duty and retired military personnel and their dependents, as well as veterans.
Katz said ancillary spending from those passholders has been lower than other passholders. But, he added, the pass has met its expectations, and the company views the passes as a positive for both military personnel and the company.
Vail Resorts doesn’t talk about specific possible future moves; Katz said the company is always looking for opportunities.
The problem, Katz said, is that ski resort owners or ownership groups don’t often put their resorts on the market.
“Over the past 10 years, we’ve had a pretty methodical approach,” Katz said. “We’ve been thoughtful each time,” Vail Resorts has made an acquisition.
That’s also true for international resorts, Katz said. While the European market holds a lot of opportunity, Katz said the business there is much different than it is in North America.
“We need to find the right opportunity,” Katz said, adding that any potential deal has to make sense for both the company and its pass holders.
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