Lauren Glendenning
lglendenning@cmnm.org

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June 5, 2013
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Vail Resorts’ value grows for skiers, investors

Vail Resorts’ announcement last week that it’s leasing Canyons Mountain Resort in Park City, Utah, has some Epic Pass devotees thrilled about the idea of another resort being added to their season passes.

The deal also has investors excited — trading volume for the company’s stock on the New York Stock Exchange reached 285,035 Friday, about triple the volume from the days before the announcement. The stock price opened last week at $66.19 and closed Friday at $64.05.

Trading firm MKM Partners issued a “buy” rating and an $82 price target following the news, while other firms were more conservative, such as JMP Securities, which reiterated its “Market Outperform” rating and $71 price target for Vail Resorts.

The positive response to the Canyons news isn’t all about the money, either. Vail Resorts only projects $15 million in first-year incremental EBITDA (earnings before interest, taxes, depreciation and amortization), but analysts see a future that could be much brighter than that.

JMP Securities notes the potential for higher Epic Pass sales by tapping into Canyons feeder markets such as Southern California and Salt Lake City. There’s also potential for income tied to development through Talisker’s (Canyons’ owners) work to build more real estate at the resort and finally JMP Securities notes the Park City Mountain Resort land tied up in litigation “could provide a steady and large stream of lease income for MTN (Vail Resorts),” wrote analyst Will Marks in a note to investors last week.

Part of the Canyons deal means Vail Resorts has an option to lease the land under pending litigation, which is owned by Talisker and is under the ski terrain of Park City Mountain Resort.

At the local level, the strength from the Canyons lease is expected to be seen via the Epic Pass, said Vail Mayor Andy Daly, who once served as president of Vail Resorts.

“As people begin to experience the flexibility of the Epic Pass, it’s going to bring Salt Lake skiers to Vail, Beaver Creek, Keystone and Breckenridge for a vacation — at least the skiers that have been season pass holders at the Canyons,” Daly said.

Exposing the quality that Vail represents to the Utah market should also benefit Vail, Daly said.

Vail Ski Museum Executive Director Susie Tjossem, who is also a Vail Town Council member, thinks Vail Resorts is doing a good job of expanding its brand. She said the fact that Salt Lake City is a six-hour drive to Vail makes Vail now more accessible to a new market.

“The fact that someone could buy that (Epic) pass and know they have days at Vail and Beaver Creek bodes well for us,” Tjossem said.

Skiers and snowboarders in the local market are also happy about the deal, which brings the total number of ski resorts now valid on the Epic Pass for unlimited skiing and snowboarding with no blackout dates to 12. The six-hour drive works both ways, and many skiers and snowboarders expect to make the trip to Utah next season.

Jason Walence commented on the Vail Daily’s Facebook page that he’s excited.

“We will go,” he wrote.

Local resident Matt Jones commented that when he goes to Utah, it isn’t to ski at Canyons, but Kelly Hollis commented that the move is good on Vail Resorts’ part regardless.

“I think that anytime they make the Epic Pass able to be used in more places is a good thing,” Hollis commented. “Even if people don’t use it, why not have the option to use what you have already bought in more places? You’re just getting more bang for your buck no matter how you look at it.”


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The VailDaily Updated Jun 3, 2013 09:30PM Published Jun 12, 2013 11:25AM Copyright 2013 The VailDaily. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.