Back to: Regional
September 27, 2013
Follow Regional

Vail Resorts CEO Rob Katz: ‘We are very pleased’

BROOMFIELD — Vail Resorts officials Friday reported strong results for the company’s 2013 fiscal year, with gains in everything from pass sales to ski school revenue.

In a Friday call, company CEO Rob Katz said he’s “proud of our accomplishments” for the fiscal year — from Aug. 1, 2012, to July 31 of this year — saying the numbers reflect “... higher overall visitation, improved pricing, increased average guest spend and strong pass sales.”

The company’s stock finished the day at $69.59, up 61 cents from the previous day’s closing price.

Katz gave call participants an upbeat look at the company’s performance. Season pass revenue increased 8.8 percent from the previous fiscal year driven, in part, by the company’s management deal for The Canyons resort in Park City, Utah.

Katz added that the company’s acquisitions of small, Midwest ski areas — Afton Alps in Minnesota and Mount Brighton in Michigan — have also helped spur season pass and lift ticket sales. Pass sales in the past fiscal year also include a new pass for Keystone and Arapahoe Basin, as well as the addition of resorts in Austria and France to the traditional Epic Pass.

Those additions mean the company is growing in both the “high end” and “value” markets, Katz said.

Responding to a question from Barclays analyst Felicia Hendrix, Katz said The Canyons may also help Vail Resorts increase its market share.

Uncertainty

While Katz said it’s too early to draw any firm conclusions, he said company officials believe there’s an opportunity to draw market share away from other Utah resorts with its deal at The Canyons.

There’s uncertainty surrounding The Canyons, though. As part of its $25 million per year lease of the resort property, Vail Resorts also took over responsibility for litigation between Talisker, which owns the property, and the operators of the Park City Mountain Resort.

Responding to a question, Katz said even if his company loses the current lawsuit, the deal at The Canyons has opportunities that make the company’s investment worthwhile.

That said, Katz added that the litigation with Park City is “proceeding consistently with how we expected it to.”

Lodging revenue

Lodging is also growing. The company for the 2013 fiscal year increased its total lodging revenue by 6.5 percent over the 2012 period. Katz said the lodging business was aided by “improved summer visitation and increased winter demand during peak holiday periods.”

People tended to spend more, too, with the company’s “average daily rate” and “revenue per available room” both growing in 2013. Katz said besides more people booking rooms at higher rates, the company has benefited from a re-organization of its lodging business.

The outlook for the coming season seems to be strong, too. While only about 15 percent of the company’s rooms have been booked for the coming season, Katz said both rates and occupancy are up from the 2012 fiscal year.

Vail Resorts Chief Financial Officer Mike Barkin said that’s in line with the company’s current outlook for the 2014 fiscal year. While company officials’ “visibility is limited,” Barkin said the company is planning on “normal” weather and the continuation of national and world economic conditions.

Plans for summer

Summer plans also require some gazing into the future. Katz said the company expects the U.S. Forest Service to publish by the end of November a draft plan for the company’s Epic Discovery proposals at Vail Mountain. If the plans are ultimately approved by federal land managers, Katz said the company could have all its proposed summer activities in place by 2015 and 2016.

While company officials expect summer activities to ultimately draw more visitors, Katz said the initial opportunity lies with people who are already coming to Vail.

While real estate doesn’t feature as prominently in the company’s portfolio as it once did, the company has closed on the sales of 10 units at the Ritz-Carlton Residences in Vail and 12 at One Ski Hill Place in Breckenridge. The company also sold 2.1 acres of land at the base of Peak 8 in Breckenridge. That land will be developed by the buyer into time-share condominiums. Despite those sales, the company’s real estate revenue dropped by roughly $5 million from the 2012 to 2013 fiscal years.

With snow already reported at Colorado resorts this week, Katz said company officials are “excited” about the prospects for the coming season. The company is set to open the Peak 6 expansion at Breckenridge — bringing 23 percent in skiable terrain — as well as the new, six-person Chair 4 from Mid Vail and the new Red Tail Camp restaurant at Beaver Creek.

Those and other improvements will be “important drivers of growth,” he said.


Explore Related Articles

Trending in: Regional

The VailDaily Updated Sep 30, 2013 09:23AM Published Sep 30, 2013 10:47AM Copyright 2013 The VailDaily. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.