VAIL, Colorado - Vail Resorts released some ski season metrics Friday morning, highlighting both positive and negative results, including a 15.3 percent drop in skier visits across the company's six mountain resorts.
Numbers through Jan. 2, compared to the same time period in the 2010-11 ski season, show ski school revenue was up 0.9 percent, while dining was down 5.6 percent due to the fact that many on-mountain restaurants weren't yet open due to snow conditions.
The drop in skier visits also includes "lower utilization by season pass holders," the report said.
Vail Resorts CEO Rob Katz called the weather so far this season "very unusual."
"For the first time in 30 years, a lack of snow has not allowed us to open the back bowls in Vail as of January 6, 2012 and, for the first time since the late 1800s, it did not snow at all in Tahoe in December," Katz said in a statement. "Despite these conditions, we were very pleased that season to date our total lift ticket revenue was up 0.6 percent and ski school revenue increased 0.9 percent compared to the prior year when record snowfall was reported across our resorts."
Katz went on to say that the company's performance under the circumstances highlights its strong season pass program, wide range of offerings at each resort, as well as the importance of the company's ongoing investments, specifically snowmaking infrastructure.
Katz emailed his employees Friday morning thanking them for their hard work.
"It's no secret that Mother Nature has delivered less natural snowfall at our mountain resorts than we usually get this time of year," Katz wrote. "But, there is plenty of good news."
Good news like consistently high guest satisfaction scores, measured by the company's internal surveys, prove the resort is headed in the right direction, Katz said.
Katz told employees to stay focused on company values to "serve others," and "have fun," which Katz wrote is a value "that is contagious and transcends to the guest experience."
"Remember that this too shall pass, and on the other end we will be stronger as a company (and the powder will be that much sweeter)," he wrote.
A JMP Securities midday note on Vail Resorts reiterated its "market outperform" rating and $57 stock price target. Vail Resorts' stock price closed at $38.30 Friday, up 0.39 percent from Thursday's closing price.
JMP Securities recently lowered its estimated resort EBITDA (earnings before interest, taxes, depreciation and amortization) for Vail Resorts from $237 million to $200 million, but Vail Resorts is maintaining its fiscal 2012 resort EBITDA guidance of $233-243 million, which the company issued in September 2011.
"However, we would acknowledge that those targets will be more difficult to achieve given the results over the holidays," Friday's metrics report said.
The JMP Securities report, prepared by JMP Managing Director Will Marks, says Vail Resorts' business model is "showing stability with relatively flat levels of revenue," but that "the dismal winter weather outlook and management's cautious comments regarding guidance are leading us to leave our revised projections unchanged at (fiscal year 2012) resort EBITDA of $200 million, compared to guidance in the range of $233-243 million."
The investment analysis also indicates a reliance on Mother Nature as an investment risk.
"The maxim of the ski industry is that more snow equates to more skiers," according to JMP Securities. "Unfortunately, the reverse is also true, and ski resorts have invariably suffered from low snow levels and the effect this has had on skier visits and earnings."
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