Vail Resorts: Epic pass up, profits down
September 24, 2009
VAIL, Colorado –Vail Resorts’ profits for fiscal year 2009 were down 52.4 percent from 2008 – a prediction the company made in the spring and CEO Rob Katz calls “solid results.”
Lift ticket revenues, overall skier visits and out-of-state visitors were down, but Vail and Beaver Creek both had an increase in skier visits, mostly due to the Epic Pass, which debuted last fall.
The earnings, while significantly lower than last year, fell within the upper end of the company’s predictions, Katz said during a conference call with investors and media Thursday.
Jeff Jones, Vail Resorts’ chief financial officer, said the year-end earnings report is “better than we expected.”
The company’s biggest hit continues to come from the lodging segment of its business, he said. There was a higher drop in revenues from lodging than the company expected, Jones said.
There was a 21.7 percent increase in season pass revenue, also attributed to the Epic Pass, even though the company’s overall lift ticket revenue was down $25.4 million, or 8.4 percent.
While the overall earnings are way down, Katz said the company is confident.
“We’re cautiously optimistic that the economic environment will at a minimum stabilize,” Katz said.
Because Vail Resorts guests are focused on value, the company is searching for ways to provide the best experiences at acceptable prices, Katz said. Vail Resorts will continue to offer packages and promotions to attract guests.
Season pass sales are already about 14 percent higher than at this time last year, Katz said. The time period represented 55 percent of the total season pass sales last year.
Katz said that’s a strong early season performance, it’s still too early to know how 2010 will pan out.
As for lift ticket prices, which the company tends to raise year after year, Katz said Vail Resorts hasn’t made any final decisions about ticket prices yet.
“This is not a year where you’re going to see too many price increases across the company,” he said. “No question, going into this year, that’s going to be a much lesser part of our strategy.
The company is focusing more on volume than price, Katz said.
There are signs of encouragement on the real estate side of the business, as Katz pointed out that more people have been asking about the Ritz-Carlton Residences in Vail.
“There’s a lot more people taking tours,” Katz said. “We went through a long period where there was really no activity.”
He added that the company is more confident in real estate in the upcoming year, but still very cautious.
“There is very little visibility – I can’t stress that enough – in terms of what the economy is going to bring in next six to nine months,” Katz said.
Lauren Glendenning can be reached at 970-748-2983 or firstname.lastname@example.org